PayPal gives you three ways to take credit cards, each with different fees and setup steps
PayPal processes credit card payments through three separate tools: PayPal Checkout (embedded on your website or sent via invoice link), PayPal Here (a mobile card reader for in-person payments), and PayPal Virtual Terminal (a web form where you manually enter card details). Which one you use depends on whether customers are paying online or in person, and whether you want the payment form on your own site or hosted by PayPal.
All three charge transaction fees — PayPal Checkout costs 2.99% plus $0.30 per transaction for online sales, while PayPal Here and Virtual Terminal both charge 2.7% plus $0.10 per transaction. There are no monthly fees to set up or maintain any of these services, though you do need an active PayPal Business or Premier account.
Key Takeaways
- PayPal Checkout lets customers pay with a credit card directly on your website or through an invoice link without leaving your site.
- PayPal Here is a mobile reader that plugs into your phone or tablet, designed for accepting cards in person at markets, events, or client meetings.
- Virtual Terminal is a web form where you manually type in card details — useful when a customer calls you or pays by phone.
- Transaction fees range from 2.7% to 2.99% plus a per-transaction charge, with no monthly subscription required for any method.
- You need a PayPal Business account to access these tools; a personal PayPal account does not include them.
Setting up PayPal Checkout on your website
PayPal Checkout is the most common option for online businesses. You embed a payment button or form directly into your website, or you send customers a PayPal invoice link that includes a "Pay Now" button. When a customer clicks to pay, they see a PayPal-hosted checkout page where they can enter their credit card details, or they can log into their PayPal account to pay faster.
To set this up, log into your PayPal Business account, go to the Tools section, and select "Payments." From there you can generate a payment button (for a fixed amount) or a payment form (for variable amounts). If you use a website builder like Shopify, WooCommerce, or Square, PayPal Checkout integrates directly — you authorize the connection once and orders flow through automatically. For custom websites, you will need to paste code into your site's backend, or ask your developer to do it.
PayPal also lets you send invoices with a payment link. Go to your Invoices section, create an invoice with the amount owed, and PayPal generates a shareable link. The customer clicks it, sees the invoice details, and pays with a credit card or PayPal balance. This method works well for service providers, freelancers, and anyone billing clients one at a time.
Using PayPal Here for in-person card payments
PayPal Here is a small card reader that connects to your smartphone or tablet via the headphone jack or Bluetooth. You swipe, insert, or tap a customer's card, and the payment processes instantly. The reader costs between $20 and $50 depending on the model, and you can order it directly from PayPal's website.
Once the reader arrives, download the PayPal Here app on your phone, link it to your PayPal Business account, and pair the reader via Bluetooth. You then enter the payment amount in the app, the customer inserts or taps their card, and you get a receipt. The transaction fee is 2.7% plus $0.10, and funds deposit into your PayPal account within one to two business days.
This tool is popular with small vendors at farmers markets, pop-up shops, service providers who meet clients on-site, and anyone who needs to accept cards without a fixed location. You can also use it to take payments over the phone — enter the amount, read the card details to the customer to confirm, and they authorize the charge.
Processing card details through Virtual Terminal
Virtual Terminal is a web-based form where you manually enter a customer's card information and process the payment. You log into your PayPal account, navigate to Virtual Terminal, type in the card number, expiration date, CVV, and billing address, then submit. This is useful when a customer calls you with their card details, or when you need to process a payment without a physical reader or website integration.
Virtual Terminal charges 2.7% plus $0.10 per transaction, the same rate as PayPal Here. There is no setup beyond logging into your PayPal Business account — the tool is available immediately. However, you should only use Virtual Terminal when the customer is present (either on the phone with you or in person) and has authorized the charge verbally. Processing a card number without the cardholder's knowledge or permission violates payment processing rules and can result in account suspension.
Comparing fees and choosing the right method
| Method | Setup Cost | Transaction Fee | Best For |
|---|---|---|---|
| PayPal Checkout | Free | 2.99% + $0.30 | Online sales, invoices, website integration |
| PayPal Here | $20–$50 (reader) | 2.7% + $0.10 | In-person payments, mobile vendors, events |
| Virtual Terminal | Free | 2.7% + $0.10 | Phone orders, manual card entry, occasional use |
The choice depends on your business model. If you sell online and customers visit your website, PayPal Checkout is the standard choice — the higher per-transaction fee (2.99% + $0.30) is offset by the convenience of a hosted checkout page that handles security and fraud detection for you. If you meet customers in person or at events, PayPal Here saves you the 2.99% fee and gives you a portable reader.
Virtual Terminal is best for occasional use — a service provider who takes a few phone orders per month, or a business that needs a backup method. If you process dozens of phone orders weekly, PayPal Here or a dedicated phone payment system may be more practical.
Security and fraud protection when accepting cards
PayPal handles the security of card data for you — your customers' full card numbers are never stored on your computer or website. With PayPal Checkout, the payment form is hosted by PayPal, so you never see the card details. With PayPal Here, the reader encrypts the data before it leaves the device. With Virtual Terminal, PayPal's servers encrypt the information as soon as you submit it.
All three methods include PayPal's Seller Protection, which covers you against certain types of fraud and chargebacks — though the coverage varies. For Checkout, you are protected against unauthorized transactions if you follow PayPal's requirements (like confirming the customer's address). For Here and Virtual Terminal, protection is more limited because you are manually entering the card details, which is considered higher-risk.
To reduce fraud risk, always confirm the customer's billing address matches their card, ask for a CVV (the three-digit code on the back), and keep records of the transaction and any communication with the customer. If a customer disputes a charge, PayPal will ask you for proof that the transaction was authorized — a phone recording, email confirmation, or signed receipt helps you win the dispute.
Moving money from PayPal to your bank account
When a customer pays you through any PayPal method, the money lands in your PayPal account balance. You can leave it there to pay other vendors, or transfer it to your bank account. PayPal offers two transfer speeds: Standard (one to two business days, free) and Instant (minutes, costs 1% with a $0.25 minimum and $25 maximum per transfer).
To set up a transfer, go to your PayPal Wallet, select "Transfer Money," choose your bank account, and pick the speed. You will need to link your bank account first — PayPal will verify it by depositing two small amounts and asking you to confirm the numbers. This takes two to three business days the first time, but only happens once.
Frequently Asked Questions
Do I need a separate merchant account to use PayPal for credit cards?
No. PayPal acts as your merchant account — you do not need to set one up elsewhere. You only need a PayPal Business account, which is free to create. PayPal handles the relationship with the card networks (Visa, Mastercard, etc.) on your behalf.
Can customers pay with debit cards through PayPal?
Yes. PayPal Checkout, Here, and Virtual Terminal all accept debit cards the same way they accept credit cards. The customer enters or swipes the card, and PayPal processes it. The transaction fees are the same regardless of card type.
What happens if a customer disputes a charge?
PayPal will notify you and ask for proof that the transaction was authorized. For Checkout, this is usually straightforward because PayPal has a record of the customer's actions on your site. For Here and Virtual Terminal, keep records of phone calls, emails, or signed receipts. If you can prove authorization, PayPal typically rules in your favor.
Can I use PayPal Here internationally?
PayPal Here is available in the United States, Canada, Australia, Japan, and a few other countries, but not everywhere. Check PayPal's website to see if it is available in your location. Virtual Terminal and Checkout have broader international support.
Is there a limit to how much I can process per month?
PayPal does not publish a hard monthly limit, but new accounts may have lower limits that increase over time as you build transaction history. If you hit a limit, PayPal will notify you. You can request a higher limit by contacting PayPal support and providing information about your business.