PayPal's two paths to credit card acceptance

PayPal offers two separate ways to take credit card payments: PayPal Checkout (which lets customers pay with a card without a PayPal account) and PayPal Here (a mobile card reader for in-person transactions). Most online businesses use Checkout. If you're selling in person, you'll use Here or a similar mobile reader. Both charge a per-transaction fee — there's no monthly subscription, but you pay each time a card is processed.

The method you choose depends on whether you're taking payments online, in person, or both. Checkout works on your website or through an invoice link. Here requires a physical card reader that plugs into your phone or tablet. Neither requires you to hold the card yourself or type in the full number — the customer enters it, or you swipe it, and PayPal handles the encryption.

Key Takeaways

  • PayPal Checkout lets customers pay with a credit card on your website or invoice without creating a PayPal account, and costs 2.99% plus $0.30 per transaction for online sales.
  • PayPal Here is a mobile card reader for in-person payments and costs 2.7% per transaction when you swipe or insert the card.
  • You need a PayPal Business or Premier account to accept payments; a Personal account cannot receive card payments.
  • Funds from card payments land in your PayPal balance within one to two business days, and you can transfer them to your bank account for a small fee.
  • PayPal holds the customer's card data — you never see the full number — so you don't have to meet payment card security standards yourself.

Setting up PayPal Checkout on your website

Log into your PayPal Business account and go to the Tools section, then select Checkout. If you use a website builder like Shopify, WooCommerce, or Square Online, PayPal has a built-in integration — search your platform's app store for "PayPal" and install the official plugin. The plugin connects your store to your PayPal account automatically.

If you code your own site or use a platform without a PayPal plugin, you'll need to add PayPal's payment button or use their API. PayPal provides code snippets and documentation for this, but it requires basic technical knowledge or help from a developer. For non-technical users, the simplest route is to use an invoice link: generate an invoice in PayPal, email it to the customer, and they click a link to pay with any card.

Test the payment flow before going live. PayPal provides sandbox credentials (fake account details) so you can process a test transaction and confirm the button works and money lands in your account correctly.

Using PayPal Here for in-person card payments

Download the PayPal Here app on your phone or tablet (iOS or Android), then order a card reader from PayPal's website. The reader is a small device that plugs into your phone's headphone jack or charging port, or connects via Bluetooth. Once it arrives, pair it with the app by following the on-screen prompts.

To process a payment, open the app, enter the amount, and either swipe the card, insert it (chip), or tap it (contactless). The customer's card data stays on the reader — you never touch it or see the full number. The transaction processes in seconds, and the customer receives a receipt via email or text if you collect their contact details.

Funds appear in your PayPal balance within one to two business days. You can transfer them to your linked bank account for a small fee, or leave them in PayPal to use for future purchases or payouts.

Understanding PayPal's transaction fees

PayPal Checkout charges 2.99% plus $0.30 per transaction for online credit card payments. On a $100 sale, you pay $3.29. This rate applies whether the customer pays with a Visa, Mastercard, American Express, or Discover. If the customer pays with their PayPal balance instead of a card, the fee is lower (2.2% plus $0.30), but you have no control over which method they choose.

PayPal Here charges 2.7% per transaction for swiped or inserted cards, with no flat fee. On a $100 sale, you pay $2.70. Contactless or online payments through the Here app cost 3.5% plus $0.15. International cards cost more — check PayPal's current rates for the specific country.

These fees are deducted from the payment before it reaches your PayPal balance. If a customer disputes a charge or requests a refund, PayPal refunds the full amount to them, but you don't get the fee back.

Account requirements and verification

You must have a PayPal Business or Premier account to accept credit card payments. A Personal account cannot receive card payments from customers — it's designed only for peer-to-peer transfers. If you have a Personal account, you'll need to upgrade to Business (free) or Premier (also free, but with higher transaction limits).

During signup, PayPal asks for your legal name, address, phone number, and tax ID (EIN or SSN). They verify this information against public records. If you're a sole proprietor, you can use your Social Security number. If you're a business entity, use your EIN.

PayPal may request additional documents — a copy of your driver's license, business license, or bank statement — depending on your business type and transaction volume. This verification can take a few days to a week. Until it's complete, you can still receive payments, but PayPal may hold the funds for longer.

Where the money goes and how to access it

Credit card payments land in your PayPal balance within one to two business days. This is not the same as your bank account — it's money held by PayPal that you can spend on purchases, send to other PayPal users, or transfer to your bank.

To move money to your bank account, go to Wallet in your PayPal account, select Transfer Money, and choose Transfer to Your Bank. Enter the amount and confirm. Standard transfers take one to two business days and cost nothing. Instant transfers (available in some regions) land in minutes but charge a small percentage fee, usually around 1%.

You can also request a PayPal debit card, which lets you spend your PayPal balance directly at stores and ATMs without transferring to your bank first. There's no monthly fee, but ATM withdrawals may charge a small fee depending on the ATM network.

Handling refunds and disputes

If a customer requests a refund, log into PayPal, find the transaction in your Activity or Transactions history, and click Refund. The money returns to the customer's card within one to two business days, and it's deducted from your PayPal balance immediately. You don't get the transaction fee back.

If a customer disputes a charge (claiming they didn't authorize it or didn't receive the product), PayPal opens a Resolution Center case. You have ten days to respond with evidence — a tracking number, delivery confirmation, email correspondence, or a signed receipt. If you can't prove the customer received what they paid for, PayPal sides with the customer and reverses the charge.

To reduce disputes, send order confirmations and tracking information automatically, keep records of all customer communication, and use a signature or delivery confirmation for high-value orders. If you sell digital goods, document the delivery method clearly in your terms.

Frequently Asked Questions

Do I have to use PayPal Checkout, or can I take cards another way?

No, you can use other payment processors like Stripe, Square, or your bank's merchant services. Each charges different fees and offers different features. PayPal Checkout is one option, not the only one. Compare rates and integrations before deciding.

What if a customer's card is declined?

PayPal shows an error message immediately. The customer can try a different card, or you can ask them to contact their bank to check for fraud blocks. No charge is processed if the card is declined, so there's no fee to you.

Can I accept American Express through PayPal?

Yes. PayPal Checkout accepts Visa, Mastercard, American Express, and Discover. Amex charges slightly higher processing fees on some transactions, but PayPal handles all of it — you see one fee per transaction regardless of card type.

How long does it take to get paid after a customer swipes their card?

The transaction processes in seconds, but the money doesn't land in your PayPal balance until one to two business days later. Weekends and holidays can add time. If you need faster access, PayPal's Instant Transfer option (available in some regions) can move money to your bank in minutes for a small fee.

What happens if I close my PayPal account?

Any money in your PayPal balance is transferred to your linked bank account within five to ten business days. Pending transactions (payments not yet settled) are completed first. You won't lose the money, but you should plan the timing if you're closing the account.