PayPal UK Business Account | Small Business Guide
PayPal has long been a safe and easy way to make payments online, as it provides automatic protection for buyers and sellers.
Now with more competition and PayPal increases fees for business purchases between UK and Europe As of November, you might be wondering if PayPal is right for your business.
Read on to learn more about PayPal business accounts, the difference between using a personal and business account, and the fees you should be aware of.
What is a PayPal business account?
A PayPal business account can be used to process payments online and in person, and you can link it to your business bank account to easily transfer your money.
With a PayPal business account, you can:
accept a wide range of online payment types – customers don’t need a PayPal account to pay you
take payments on the go with a card reader and your smartphone
use a QR code to accept payment through the PayPal app
create and send invoices
integrate PayPal checkout into your website
have multiple connections for up to 200 employees
Do i need a PayPal business account?
You don’t have to have a PayPal business account, but it has more features than a personal account and allows you to trade under your business name.
For example, this is useful if you have an online store and want to integrate PayPal with your payment so that customers can check out without leaving your website.
Can I use a personal PayPal business account?
There’s no reason you can’t use a personal business account, but there are a few drawbacks:
a customer can see your full name – it may sound less professional and does not protect your privacy
there is a fee to accept credit or debit cards online
the functionalities and the merchant services are very limited
confusing for tax purposes to mix personal and business transactions
While you can start by using your personal PayPal account if you only make occasional sales, it’s a good idea to upgrade it to a business account as you grow. This means you can operate under your company name, accept more payment types, and benefit from additional features like online billing.
Free Invoice Template: Download it for your business today.
PayPal business account fees
While it’s free to open a PayPal business account, you’ll have to pay a transaction fee every time a customer pays you for goods or services.
If you are selling internationally, the costs can add up quickly. And from November of this year, that includes payments between UK businesses and businesses in the European Economic Area PayPal is introducing new fees that will increase to 1.29%.
However, there are no monthly fees or charges for closing your PayPal account.
Tariffs for domestic transactions
This is the current PayPal business account fee that you will be charged on transactions as a UK resident. The fixed costs depend on the currency you are paid in, but we have included the fixed costs for UK sterling for quick reference.
|Type of payment||Rate||Fixed charges for payments in pounds sterling|
|Alternative payment method||1.20% + fixed costs||£ 0.30|
|Card payment for a user without a PayPal account||1.20% + fixed costs||£ 0.30|
|QR Code Transactions (£ 10.01 and over)||1.50% + fixed costs||£ 0.10|
|QR code transactions (£ 10 and under)||2.00% + fixed costs||£ 0.05|
|All other commercial transactions||2.90% + fixed costs||£ 0.30|
If you are a registered charity and verified by PayPal, you may be eligible for reduced processing fees.
To see the full list of PayPal fees visit their website.
How to create a PayPal business account
To get started, follow this step-by-step guide to opening a PayPal business account in UK:
Select the option “Company account” and click on Continue
Enter your work email address and click Continue
Use the drop-down menus to add information about your business (category, subcategory, business url, country, name of credit card statement). Click Continue
Fill out the form with your information (date of birth, nationality and domicile). Click Submit
Check your inbox for an email from PayPal asking you to verify that it is you
Once verified, your account will be ready to use
Learn more about implementation of a commerce platform with PayPal.
Are you using PayPal for your business? Let us know in the comments.
Photograph 1: Sitthiphong / stock.adobe.com