You might not think of PayPal as a business account, but it’s actually ideal for small businesses. Opening a PayPal business account is easy and can open up a lot of avenues for your business. You can use the account to accept credit card payments, invoices, or direct payments from customers without risk.
This article will walk you through how to get a PayPal business account and everything you need to know about opening one. Read on and get ready to become more profitable by opening your own PayPal business account.
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What is a PayPal Business Account?
A PayPal business account is just like a normal PayPal account, but it’s designed for small businesses and merchants who want to accept payments online. You can set up your business account to accept credit card payments, receive invoices, send digital receipts, withdraw funds to your bank account, and more.
There are a few restrictions when compared to a personal account, but those restrictions aren’t significant enough to outweigh all the benefits of a business account. Business accounts come with two key restrictions:
- You can’t send money from a business account to a personal account, or vice versa.
- You can’t send money to other businesses (only individuals).
How to Get a PayPal Business Account
Opening a PayPal business account is easy. Still, you need to make sure you have all the required information and documents ready. It’ll help make the account creation process quick and painless. Here’s the information you might want to have on hand before applying for a PayPal business account:
- Business Name: This is the name of your business, including your name if you’re self-employed, or the name of your LLC if you have one. This name will be displayed on all your payment pages, so make sure it’s professional and easy to understand.
- Business Address: This is the physical address where you do business. If you work remotely or are self-employed, you don’t need to include a physical address unless you’re specifically asked to during the application.
- Business EIN or Tax ID Number: If your business is registered with the IRS, you’ll need to include the Employer Identification Number (EIN). Otherwise, it’s your Social Security Number (SSN).
How PayPal Works for Small Businesses
PayPal is one of the largest online payment providers and has been around since 1999. Since its creation, it has developed from a private payment system between friends to a full-service payment platform for businesses. In the last few years, PayPal has become one of the most popular payment methods for small businesses.
Here are some reasons for this:
- It’s easy to set up, quick to process payments, has low fees, and provides customers with solid protection.
- It is also easy to integrate with many eCommerce platforms, making it easy to set up recurring payments.
- To use PayPal, your customers simply need to create an account, link their credit card or bank account to their account, and then select PayPal as the payment method.
- Payments are sent directly to your PayPal account and you can withdraw the funds to your bank account when they’re ready.
- You can also use your PayPal account to accept payments from customers who don’t want to use PayPal. To do this, you’ll need to set up a gateway.
Pros of Opening a PayPal Business Account
As we’ve already discussed, there are a lot of benefits to opening a PayPal business account. Here are the top five reasons why you should open a PayPal business account:
- You Can Protect Your Account: One of the best things about a business account is that you can protect your personal account. If someone tries to steal money from your personal account, they’ll only be able to access the funds in your business account if you link the two accounts. That gives you more protection and helps keep your personal finances separate from your business finances.
- You Can Accept Credit Card Payments: Accepting credit card payments through a business account is much easier than accepting payments with a personal account. Since credit cards are linked to the business account, you don’t have to worry about chargebacks, fraudulent purchases, or your personal finances being affected.
- You Can Send and Receive Invoices: You can use your business account to invoice your customers directly from your account. They can then pay the invoice through their own PayPal account or a credit card linked to their account.
- You Can Send Digital Receipts: You can send customers digital receipts through your account, which can help to streamline the payment process even further. Many customers appreciate being able to receive digital receipts, and it can make the whole process much easier for everyone involved.
- You Can Withdraw Funds Quickly: When you accept payments through a business account, the money is deposited into your account instantly. You can withdraw the funds to your personal bank account as soon as they’re ready.
- You Can Profit From Integrations. PayPal allows for many integrations, so you can easily integrate your PayPal with accounting and benefit from automated bookkeeping, invoicing, accounts reconciliation, and more.
Cons of Opening a PayPal Business Account
While there are a lot of benefits opening a business account can offer, they’re not without drawbacks. Some of the cons of opening a business account include:
- You Can’t Send Money to Other Businesses: You can’t send money from a business account to another business. Doing so would violate PayPal’s terms of service, and you’d risk getting your account shut down.
- You Can’t Send Money to Friends: You can’t send money from a business account to a friend. Doing so would also violate PayPal’s terms of service.
- You Can’t Access Your Money Until You Withdraw It: When you accept payments through a business account, the funds are deposited into your account and then withdrawn to your bank account. You can’t access those funds before they’re withdrawn.
Final Words: Should You Open a PayPal Business Account?
Opening a PayPal business account is one of the best ways to grow your business and protect your finances at the same time. You can accept credit card payments, send invoices, and send digital receipts through your account. You can also withdraw funds to your bank account whenever they’re ready, and you can protect your personal finances at the same time. If you’re still not sure if you should open a business account, these are just a few of the many benefits of using a business account.
No doubt PayPal can help you grow your business, whether you use PayPal Business Payments or PayPal Standard. If you want to accept credit card payments, send and receive invoices, and send digital receipts, you need to open a business account.