PayPal gives you three ways to take credit card payments, depending on your business size and how you want to receive money
PayPal Checkout, PayPal Commerce Platform, and PayPal Here are the three main routes. PayPal Checkout works if you have a website or send invoices — customers pay you directly through PayPal's system. PayPal Commerce Platform is built for developers and larger businesses that want to embed payment processing into their own software. PayPal Here is a mobile card reader you can use in person or online, useful if you work from multiple locations or don't have a permanent storefront.
All three accept Visa, Mastercard, American Express, and Discover. Fees vary by method: PayPal Checkout charges a percentage plus a flat fee per transaction; PayPal Here charges a percentage if you key in the card number, or a lower percentage if you swipe or tap; Commerce Platform pricing depends on your volume and agreement with PayPal. None of these methods require you to set up a separate merchant account — PayPal handles that part for you.
Key Takeaways
- PayPal Checkout works for online businesses and invoice-based work; you send a payment link and the customer completes the purchase on PayPal's page.
- PayPal Here is a physical card reader that plugs into your phone or tablet, letting you accept cards in person or manually enter card details online.
- Fees are lowest when customers swipe, tap, or use their digital wallet, and higher when you manually type in card numbers.
- Money lands in your PayPal account within one to two business days, and you can transfer it to your bank account for a small fee or keep it in PayPal to spend.
- You do not need a separate business bank account or merchant account to start — PayPal provides both the payment processing and the holding account.
Setting up PayPal Checkout for your website or invoices
If you sell online or send payment requests to customers, PayPal Checkout is the simplest route. You log into your PayPal business account, go to the Checkout section, and generate a payment button or link. Paste the button into your website, or send the link via email or text. When a customer clicks it, they land on a PayPal page where they enter their card details — or log into their PayPal account if they have one.
The customer never leaves PayPal's page, which means you never see or store their card number. PayPal handles the security and fraud checking. Once the payment goes through, you get a notification in your PayPal account, and the money is yours — though PayPal holds it for a brief period depending on your account history and the transaction size.
You can customize the button to show your business name, the amount, and what the payment is for. PayPal also lets you set up recurring payments if you offer subscriptions or monthly services. The fee structure is transparent: you see the exact cost before you activate the button.
Using PayPal Here to accept cards in person or over the phone
PayPal Here is a small card reader that connects to your phone or tablet via the headphone jack or Bluetooth. You download the free PayPal Here app, plug in the reader, and you can start taking payments immediately. This works if you're a freelancer, contractor, or small business owner who meets clients in different places, or if you want a backup way to take payments when your internet is slow.
You have three ways to process a card with PayPal Here. If the customer is in front of you, they swipe, tap, or insert their card into the reader — this charges the lowest fee. If they're on the phone or you're taking payment remotely, you manually type their card number into the app — this charges a higher fee because there's no physical card to verify. You can also accept contactless payments and digital wallets like Apple Pay and Google Pay at the lower swiped rate.
The reader itself costs money upfront, though PayPal sometimes offers promotions. Replacement readers are available if yours breaks. All transactions go into your PayPal account the same way as Checkout payments do.
Understanding PayPal's fee structure
PayPal charges different rates depending on which product you use and how the card is processed. With PayPal Checkout, the standard rate is a percentage of the transaction plus a flat per-transaction fee — the exact numbers depend on whether you're in the US, Canada, or another country, and whether the customer is domestic or international. PayPal publishes these rates on their pricing page, and they change occasionally, so check before you commit.
With PayPal Here, the fee is lower if the card is physically present (swiped, tapped, or inserted), and higher if you key in the number manually. Contactless and digital wallet payments use the lower rate. There's also a small fee to transfer money from your PayPal account to your bank account, though you can avoid this by spending the money directly from PayPal or using PayPal's debit card.
PayPal Commerce Platform pricing is custom and depends on your monthly volume, so you'll need to contact PayPal's sales team for a quote. For most small businesses, PayPal Checkout or Here is the right choice.
How money moves from PayPal to your bank account
When a customer pays you, the money lands in your PayPal account within one to two business days. You can leave it there and spend it using PayPal's debit card, or transfer it to your bank account. Transfers to a linked bank account are free and usually take one to two business days, though PayPal sometimes offers instant transfers for a small fee.
You can set up automatic transfers so money moves to your bank account on a schedule — daily, weekly, or monthly — without you having to request it each time. This is useful if you process a lot of payments and want to keep your PayPal balance low. You can also transfer money on demand whenever you need it.
PayPal holds the money in your account and doesn't charge you to keep it there. You only pay a fee if you ask for an instant transfer or if you withdraw to a bank account outside the US.
Security and fraud protection when accepting cards through PayPal
PayPal handles the security side for you. When a customer enters their card on PayPal's page, the data is encrypted and you never see the full card number. PayPal's fraud detection system runs in the background and flags suspicious transactions — if something looks wrong, PayPal may decline the payment or ask the customer for extra verification.
If a customer disputes a charge or claims they didn't authorize it, PayPal has a dispute resolution process. You can respond with evidence that the transaction was legitimate — delivery confirmation, email records, or a signed agreement. PayPal reviews both sides and makes a decision. If you lose a dispute, the money goes back to the customer and comes out of your PayPal account.
To protect yourself, keep records of what you sold, when, and to whom. If you ship physical goods, use PayPal's shipping labels so you have tracking. If you provide a service, save emails or messages confirming what the customer ordered. The stronger your documentation, the better you'll do in a dispute.
Choosing between PayPal Checkout, Here, and Commerce Platform
Start with PayPal Checkout if you have a website or send invoices to customers. It's the easiest to set up, requires no hardware, and works for most online businesses. Use PayPal Here if you take payments in person, work from multiple locations, or want a backup method when your internet is unreliable. The card reader is portable and the app is straightforward.
PayPal Commerce Platform is for developers and larger businesses that want to build payment processing into custom software or a complex website. It gives you more control over the checkout experience but requires technical knowledge or a developer to set up. Most small business owners don't need it.
You can use more than one method at the same time. Many businesses use Checkout for online orders and Here for in-person or phone payments. All the money flows into the same PayPal account, so tracking is simple.
Frequently Asked Questions
Do I need a business license or separate bank account to accept PayPal payments?
No. PayPal accepts payments into a personal account, though a business account gives you better tools and clearer records. You don't need a separate bank account — PayPal holds the money and you can transfer it to whatever bank account you link. Business licensing requirements depend on your location and what you sell, but PayPal doesn't require it to process payments.
What happens if a customer's card is declined?
With PayPal Checkout, the customer sees the decline message on PayPal's page and can try a different card or payment method. With PayPal Here, the app tells you the card was declined and you can ask the customer for another card. PayPal doesn't charge you a fee for declined transactions — you only pay when the payment goes through.
Can I refund a payment if the customer changes their mind?
Yes. You log into your PayPal account, find the transaction, and click Refund. The money goes back to the customer's card or PayPal account within a few business days. You don't get the processing fee back — PayPal keeps it. Refunds are free to issue.
How long does it take to get paid after a customer swipes their card?
The money lands in your PayPal account within one to two business days. You can transfer it to your bank account immediately at no cost, or it takes another one to two business days to arrive. If you use PayPal's instant transfer option, the money can reach your bank account the same day for a small fee.
What if I'm outside the United States?
PayPal operates in most countries, but fees, supported card types, and transfer options vary. Log into PayPal's website for your country and check the pricing page — it will show you the exact rates and which payment methods are available where you are. Some countries have restrictions on which businesses can use PayPal, so verify before you set up.