PayPal Business account: how to open one and what it costs

What a PayPal Business account is

A PayPal Business account is the PayPal account type for taking payments as a business. PayPal recommends it for merchants who operate under a company or group name, and with one you can sell goods or services or receive donations.

For many sellers it is required. PayPal's user agreement says you must open a business account when the account is mainly for business or commercial activity, and the rule applies even if your business is not incorporated. PayPal's business page adds that you do not need an LLC or other formal business entity to open one.

PayPal lists these features for business accounts:

• Balance: money can be held directly as a balance in the business account.
• Staff: limited access to your account for up to 200 employees.
• Customer service: a customer service email alias so customer issues can be routed for faster follow-ups.
• Withdrawals: a standard transfer is free to a linked bank account or eligible debit card.

How to open a PayPal Business account

PayPal says sign-up takes a couple of minutes. Check eligibility first: to open a US account as an individual, you must be a resident of the United States or one of its territories and at least 18 years old, or the age of majority in your state. A business must be organized in, operating in, or a resident of the United States or one of its territories.

1. Gather your details

   Sign-up asks for your full legal name, email address, a password, your tax ID or social security number (SSN), business description, and your business bank account details. Have these ready before you start.

2. Create a login on PayPal's business site

   Go to PayPal's business site and choose to sign up for a business account. PayPal describes the flow in two parts: create a login, then fill in your business details and tax info.

3. Enter the business name and tax info

   The user agreement lets you use a company or business name as the name on the account. If you are a sole proprietor, PayPal says you can use your own name as the business name and provide your Social Security Number (SSN) instead of an Employer Identification Number (EIN).

4. Accept the credit check

   By opening a business account, you consent to PayPal obtaining your personal or business credit report at account opening.

5. Confirm your email and link a bank

   Once the account is open, PayPal says to link and confirm your business bank account or a card, and confirm the email address you used to sign up.

6. Verify the account to raise limits

   Completing two out of three of these steps can help PayPal verify your account and may raise your withdrawal limit: verifying your bank account, linking and confirming your credit or debit card, and providing your social security number.

PayPal business vs personal account

The difference between a PayPal business and personal account is what the account is for. PayPal's user agreement requires a personal account when the account is mainly for personal, family or household purposes, and a business account when the account is mainly for business or commercial activity. PayPal's business page still suggests a personal account for casual sellers or non-businesses who wish to get paid online.

For goods and services payments, PayPal's consumer fee page lists no separate personal rates and sends sellers to the PayPal Merchant Fees Page. The differences are in how money is held, which payments each account can receive, and the cost and limits of moving money out.

Sending friends and family payments in the US from a PayPal balance or a bank account has no fee on a personal account. Because a business account cannot receive personal transactions, customers pay it for goods and services. The user agreement says that in that case the seller will pay a fee, at the rates in the cost table below.

Switching a personal account to a business account

If you have been selling from a personal account, you can upgrade an existing personal account to a business account, usually starting from your account settings. PayPal says you will gain access to business tools while keeping your existing account history.

The user agreement gives a reason not to wait. If a personal account is used mainly for business, PayPal may close the account unless you stop the business activity or convert it to a business account.

How much is a PayPal Business account

PayPal says there is no fee to open a PayPal Business account and no monthly maintenance fees, and that you typically pay a fee only when you receive a payment for goods or services. The rate depends on how the buyer pays, as the table shows.

The table lists the main costs of a US business account from PayPal's merchant fee pages and user agreement. The per-sale rates apply to each payment you receive. The other rows apply only in the case named.

PayPal dates its US merchant fee page October 1, 2026. Rates change, so read that page before you set your prices.

What one $30 card sale costs on PayPal, Stripe and Square

Example: one $30 online sale paid with a US card. A PayPal Business account takes the card through PayPal Checkout at 2.99% + $0.49 per transaction. If the buyer pays with their PayPal account instead, the rate is 3.49% + $0.49 per transaction, which costs more on the same sale.

Payment holds and reserves on a new business account

PayPal can hold payments sent to a new business account. Its user agreement lists new sellers or sellers who have limited selling activity among the common situations where it holds payments. A risk-based hold generally lasts up to 21 days from the date the payment was received, and PayPal may release a hold earlier, for example if you upload shipment tracking.

Separately, PayPal may place a reserve on a business account if it sees a high level of risk. A reserve means all or some of the money in your business account is held back as unavailable for withdrawal.

Where Nation fits

Questions about PayPal Business accounts