How does PayPal Business Work? An Overview

PayPal Business is a fintech platform designed for businesses ranging from small startups to large enterprises. It offers a suite of tools and services to manage and receive payments efficiently and securely.

This article will look closer at how PayPal Business works, including key functionalities and payment processing capabilities. We'll also briefly talk about how Wise Business could be a great alternative to PayPal.

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How does PayPal Business work?

PayPal Business Account Features

PayPal Business is designed to provide companies of all sizes with a convenient, secure platform for handling a wide array of financial transactions.

Businesses can sign up for a PayPal Business account for free by providing necessary company details such as business name, address, and bank account information. There are also capabilities to set up multiple users with distinct roles and permissions to accommodate larger teams with different roles.ⁱ

1. Sending Business Payments on PayPal

PayPal Business offers a wide range of payment processing features, such as the ability to create and send professional, customizable invoices directly through the platform. Recipients can pay these invoices directly, either via their own PayPal accounts or through credit or debit cards. PayPal Business accepts multiple methods of payment through its website and mobile app, so invoices can be paid in a variety of ways.

2. Receiving Business Payments on PayPal

PayPal Business also offers capabilities for processing international transactions, as the platform supports currency conversion and global payments. For subscription-based businesses, PayPal Business also has tools to set up and manage recurring payments and subscription billing.²

3. Holding Business Money on PayPal

Holding business money on PayPal is secure. It is linked to major bank accounts for easy deposits and withdrawals as needed. The platform also allows businesses to keep and manage money in multiple currencies. PayPal Business also integrates with major ecommerce platforms such as Shopify, WooCommerce, and Magento, among others. It also integrates with accounting software such as QuickBooks for businesses looking to streamline financial management..³.

PayPal Business includes measures for fraud prevention by monitoring transactions and data security through encryption and secure storage of sensitive financial details.⁶

4. Other Features

PayPal Business offers a wide range of payment options for businesses sending and receiving money. For larger businesses with higher volumes of transactions, these features can help streamline operations and

This includes direct payments to suppliers, contractors, and other service providers. PayPal Business also has features for batch payments in multiple currencies to streamline payments.⁵ Businesses can also schedule payments, request payments from other businesses and customers, and set up recurring payments as needed.

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PayPal Business Accounts Costs and Prices

PayPal Business charges per-transaction fees starting from 3.49%.⁴

However, these fees vary based on the sender and receiver's amount, currency, and country. There are no initial fees or monthly fees with PayPal Business. PayPal transactions are typically processed immediately, and funds are usually available in PayPal accounts within one business day. Transferring money from a PayPal Business account to a bank account can take 1-2 business days, but this may vary depending on the bank’s processing time.

PayPal Business Account vs. Personal Account: What’s the Difference?

PayPal offers both Business accounts and Personal accounts, but there are significant differences between the two. Choosing between a PayPal Business account and a Personal account depends mainly on your needs, the volume of transactions, and the nature of your operations.

A personal PayPal account is designed for individual use, primarily for shopping online, sending money to friends and family, and receiving money. It’s best for occasional transactions but does not offer advanced business tools.

The PayPal Business account is tailored for businesses of all sizes. It offers features for managing a business, including invoice management, a higher volume of payment processing, and additional user accounts for teams.

Both Personal and Business accounts incur fees for receiving money from transactions, but Business accounts have different transaction volume limits.

How to set up a PayPal Business Account

Creating a PayPal Business account is a straightforward process and involves providing some essential information and completing a few steps to ensure your account is tailored to your business.

PayPal Business Account Requirements

To set up a PayPal Business account, you’ll need to provide your legal business name, address, and contact information. You’ll also need to specify what type of business you have - i.e., whether it's a sole proprietorship, partnership, corporation, or nonprofit and the type of industry you operate in.

PayPal Business will also require some details from individuals, including name, date of birth, address, and either Social Security Number (SSN) or Employer Identification Number (EIN) for identity and tax verification. You must also provide bank account information to link your primary account to PayPal Business for funding transactions and receiving payments.

You can then further customize your account by linking eCommerce platforms you may use or financial management tools to connect your business information.⁷

Steps to Set Up Account

Setting up a PayPal Business account is an easy process. Here’s how to get your PayPal Business account up and running:

1. Navigate to the PayPal site and select the business account option
2. Enter your business details, including your legal business name, email address, and business address. You’ll then select your business type and industry.
3. Provide personal information, including your full name, home address, Social Security Number (SSN), or Employer Identification Number (EIN), to verify your identity.
4. Set up your payment and currency preferences
5. Add a bank account

PayPal Business alternatives

While PayPal Business offers a broad suite of features for businesses, many alternatives are also available.

Wise Business

Wise Business is a money service provider (MSP). Known for its simplicity and low fees, Wise is an excellent choice for international businesses who want an global account with clear and transparent exchange rates and global money transfer services.

Features

Looking to hold funds, as well as send and receive payment globally?

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Revolut Business

Revolut is an alternative to traditional payment platforms like PayPal, especially for international businesses. It includes multi-currency accounts, corporate cards, global money transfers, and expense management. Revolut also allows multiple user accounts, with controls for managing spending and monitoring transactions. It also includes features such as automated expenses and competitive exchange rates for international transactions.⁸

Square

Square is ideal for businesses with both online and offline sales channels. It offers a comprehensive suite of tools, including point of sale (POS) systems and payment processing solutions. Features include a free POS app, inventory tracking, employee management, and offline payment capabilities. Square accepts major credit cards such as Apple Pay and includes features for invoice management.⁹

Payoneer

Payoneer is a popular alternative to PayPal and offers solutions for cross-border payments. It offers specialized services geared towards businesses and professionals who need to conduct global transactions. Payoneer supports transactions in multiple currencies and offers various payment solutions.

Users can request, receive, and make payments through bank transfers, eChecks, and Payoneer’s MasterCard debit cards. Payoneer also charges 0% currency conversion fees for certain currencies such as USD and EUR. Payoneer also offers integrations with over 2,000 marketplaces to make receiving payments from different providers easier.ⁱ⁰

How much does it cost to Send Money with Wise Business?