PayPal lets you accept credit card payments directly, but the process and fees depend on which PayPal account type you have and how the payment reaches you
If someone wants to pay you with a credit card through PayPal, you do not need to do anything special on your end — they initiate the payment from their side. However, if you are the one setting up a way for others to send you credit card payments regularly, you will need a PayPal Business or PayPal Commerce account, not a Personal account. PayPal Personal accounts can receive credit card payments only when someone sends money to your email address using PayPal's "Send Money" feature, and even then, PayPal charges you a fee.
The key difference is between receiving a one-time payment (which works on most account types) and setting up a payment method that customers can use repeatedly. The second requires a business account and involves transaction fees that vary based on your account type and the payment method.
Key Takeaways
- PayPal Personal accounts can receive credit card payments sent to your email, but PayPal charges a 2.2% fee plus $0.30 per transaction for domestic payments.
- PayPal Business and Commerce accounts let you accept credit card payments through invoices, payment buttons, or links, with fees starting at 2.99% plus $0.30 for in-person or online transactions.
- The person paying you initiates the transaction from their PayPal account or through a payment link you provide; you do not need to enter their card details.
- Credit card payments processed through PayPal take 1 to 3 business days to appear in your PayPal balance, then another 1 to 2 business days to transfer to your bank account if you withdraw the funds.
- PayPal holds some payments for up to 21 days as a fraud check, particularly on new accounts or large transactions, which delays when you can access the money.
How a One-Time Credit Card Payment Works
When someone sends you money through PayPal using the "Send Money" feature and pays with a credit card, the transaction flows through PayPal's system directly. They log into their PayPal account, enter your email address, select the amount, and choose their credit card as the payment method. PayPal processes the card charge and deposits the funds into your PayPal account balance.
You will see the payment arrive in your PayPal account within 1 to 3 business days. If your account is new or the amount is unusually large, PayPal may place a hold on the funds for up to 21 days while it reviews the transaction for fraud risk. During this hold period, the money sits in your account but you cannot withdraw it to your bank account or use it to pay others.
The fee structure for this type of payment depends on your account type. On a Personal account, PayPal charges 2.2% of the amount plus $0.30 per transaction for domestic credit card payments. On a Business account receiving the same type of payment, the fee is the same. These fees are deducted from the amount you receive, so if someone sends you $100, you will see less than $100 in your account after the fee is applied.
Setting Up a Payment Link or Invoice for Credit Card Payments
If you want to collect credit card payments from multiple people or set up a repeating payment arrangement, you need a PayPal Business or PayPal Commerce account. These account types let you create payment links, invoices, or payment buttons that customers can use to send you money with a credit card.
To create an invoice, log into your PayPal Business account, go to the "Invoicing" section, and select "Create Invoice." Enter the customer's email address, the amount, and a description of what the payment is for. PayPal generates an invoice number and sends it to the customer's email. The customer clicks a link in the invoice, reviews the amount, and pays with their credit card or PayPal balance. You do not handle their card details at any point — PayPal processes the card securely on its own servers.
Payment links work similarly but do not require you to know the customer's email in advance. You create a link through your PayPal account, share it however you want (email, text, social media, your website), and anyone who clicks it can pay you. The link includes the amount you set, or you can allow the payer to enter a custom amount. Again, PayPal handles the card processing, and you never see the card number.
Understanding PayPal's Fee Structure for Credit Card Payments
PayPal charges different fees depending on your account type and how the payment is processed. For online transactions (payments made through a link, invoice, or website), the standard rate on a Business account is 2.99% plus $0.30 per transaction. For in-person payments using PayPal Here or a card reader, the rate is 2.7% plus $0.30. These fees are taken from the amount you receive before the money lands in your account.
PayPal Commerce accounts, which are designed for businesses that process higher volumes, may offer different rates depending on your sales volume and the type of business you run. You can contact PayPal directly to discuss custom rates if you process a large number of transactions.
International credit card payments carry higher fees. If a customer outside the United States pays you with a credit card, PayPal charges 3.49% plus $0.49 per transaction (rates vary slightly by country). Currency conversion fees also apply if the payment arrives in a currency different from your account currency.
When PayPal Holds Credit Card Payments
PayPal does not release all credit card payments immediately. New accounts, accounts with little transaction history, and large or unusual transactions trigger a fraud review. During this review, PayPal holds the funds in your account for up to 21 days. You can see the money in your PayPal balance, but you cannot withdraw it to your bank account or transfer it to another PayPal user.
The hold is automatic and not something you can override by contacting PayPal support, though you can request an early release in some cases. To reduce the likelihood of a hold, maintain an active account with regular transaction history, keep your account information current, and avoid sudden spikes in transaction volume.
Once the hold period ends, the funds are released and you can withdraw them to your linked bank account. This withdrawal typically takes 1 to 2 business days. So from the moment a customer pays you with a credit card to the moment the money is in your bank account, the timeline can be anywhere from 2 to 23 business days depending on whether a hold is placed.
Withdrawing Credit Card Payments to Your Bank Account
After a credit card payment clears and any hold period ends, you can transfer the money from your PayPal balance to your bank account. Log into your PayPal account, go to "Wallet," select your bank account, and choose "Transfer Money." Enter the amount you want to withdraw and confirm. PayPal processes the transfer within 1 to 2 business days, though some banks take longer to post the deposit on their end.
You can also leave the money in your PayPal balance and use it to pay other PayPal users, make purchases from merchants that accept PayPal, or pay bills through PayPal's bill pay feature. There is no fee to hold money in your PayPal balance, but there is no interest earned either.
If you want to withdraw money frequently, consider setting up automatic transfers. PayPal lets you schedule recurring withdrawals to your bank account on a daily, weekly, or monthly basis. This is useful if you receive credit card payments regularly and want the money in your bank account without having to manually request each transfer.
Differences Between Personal and Business Accounts for Credit Card Payments
A PayPal Personal account is designed for peer-to-peer payments and does not include tools for invoicing or payment links. You can receive credit card payments only when someone sends money directly to your email address using PayPal's "Send Money" feature. You cannot create a payment button for your website, send an invoice, or set up a payment link. The fee structure is the same as a Business account (2.2% plus $0.30 for domestic payments), but the functionality is limited.
A PayPal Business account includes invoicing, payment links, and payment buttons at no extra cost. The transaction fees are slightly higher (2.99% plus $0.30 for online payments), but you get the tools to accept payments from customers at scale. If you are accepting credit card payments for a business or service, a Business account is the right choice.
You can upgrade from a Personal account to a Business account at any time through your account settings. PayPal does not charge a fee to upgrade, and your existing balance and transaction history transfer over. However, upgrading may trigger a review of your account, and PayPal may place a temporary hold on your balance while it verifies your business information.
Frequently Asked Questions
Do I need to provide my bank account information to receive credit card payments through PayPal?
No. PayPal deposits credit card payments into your PayPal account balance first. You only need to link a bank account if you want to withdraw the money to your personal checking or savings account. You can keep the money in PayPal and use it to pay others or make purchases if you prefer.
What happens if a customer disputes a credit card payment they sent me through PayPal?
PayPal will investigate the dispute and may reverse the transaction, pulling the money back out of your account. If your account balance is too low to cover the reversal, PayPal will charge your linked bank account or payment method for the difference. You can respond to the dispute through your PayPal Resolution Center with evidence that the payment was legitimate.
Can I accept credit card payments through PayPal without a business license?
Yes. PayPal does not require a business license to accept credit card payments, whether you have a Personal or Business account. However, you are responsible for reporting the income to the IRS. PayPal sends you a 1099-K form at the end of the year if you process more than $20,000 in transactions.
How long does it take for a credit card payment to show up in my PayPal account?
Credit card payments typically appear in your PayPal balance within 1 to 3 business days. If PayPal places a hold on the transaction for fraud review, the funds will show in your account but remain unavailable for 1 to 21 days depending on the reason for the hold.
Can someone pay me with a credit card if they do not have a PayPal account?
Yes. If you send them a payment link or invoice, they can click the link and pay with a credit card without creating a PayPal account. PayPal will process the card payment and deposit the funds into your account. The payer does not need to sign up for anything.