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How a PayPal Merchant Account Could Help Your Business

Many businesses use a PayPal merchant account to process payments; here's how one could work for you.

If you are just starting or beginning to expand your business, you're probably thinking about how to best manage your business's sales and who or what you're going to use to accept payments from your customers. 

 

PayPal has grown in recent years and has now become a popular option for small online businesses. But how do the services that PayPal offers differ from those offered by other, more traditional merchant accounts? Here's all you need to know.

What is a PayPal Merchant Account?

PayPal merchant accounts are a type of business account that allows businesses to accept payments without having a traditional merchant account. Also called Paypal Business Accounts,  they accept debit and credit card payments, online checks, and direct payments from people with a PayPal account.

 

Some businesses prefer them as they offer more functionality than a traditional merchant; they can track inventory, payments, profits, and invoicing as well as combine multiple business accounts into a single digital wallet. 

How do PayPal Merchant Accounts Work?

PayPal Merchant Accounts work broadly the same as normal merchant accounts, in that payments made to your business go through them before they get to you. They do, however, work slightly differently.

 

Where a merchant account acts as the middleman between your customer and your bank account; depositing funds directly into your chosen bank account, a PayPal Merchant Account takes payment from your customer and processes it themselves, before depositing it in your PayPal Merchant Account. The funds therefore appear in your company's PayPal account, before they can be transferred to your bank account. 

Benefits of Having a PayPal Merchant Account

Having a PayPal Merchant Account allows your business to evolve in the way it takes and manages payments. Customers can pay using only their email address or by following their own personalised link, making taking and accessing payments easier than is typically possible with a traditional merchant account.

 

PayPal is often a good option for businesses that are just starting out as there are no monthly fees and the account is free to set up. As you'll see below, PayPal charges a fee for each transaction they process, which is how it makes its money. So if your business has a lower transaction volume you might save money.

 

PayPal Merchant Accounts also help you build strong relationships with your customers; as a globally trusted and secure payment method, your customers are more likely to buy if they see you take PayPal payments, as they know they're protected. This can also be a bonus if your business is just starting out. 

How to get a PayPal Merchant Account

Securing a PayPal Merchant Account is a fairly simple process. As part of your application, you need to provide your basic information, including your business name, address, and tax ID number. 

 

You'll also need to provide an email address, a business phone number, your legal business name, and your bank account information so you can accept payments. Once you have provided the required information, you can create a PayPal business account in a matter of minutes and start accepting payments for your goods and services. 

FAQs: Your Questions Answered

PayPal merchant accounts are a type of business account that allows businesses to accept payments without having a traditional merchant account. Also called Paypal Business Accounts, they accept debit and credit card payments, online checks, and direct payments from people with a PayPal account.

PayPal Merchant Accounts work broadly the same as normal merchant accounts, in that payments made to your business go through them before they get to you. Unlike a normal merchant account, a PayPal Merchant Account takes payment from your customer and processes it themselves, before depositing it in your PayPal Merchant Account.

PayPal business accounts are free to open, but PayPal charges a fee for each transaction processed through its merchant services. PayPal seller fees in the UK vary based on the type of transaction, and usually range from 1.2% to 2.9% + a fixed fee.

Qualify To Reduce Your Payment
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Do you currently accept card payments?
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Our Partners
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  • Fiserv (Europe) Limited
  • Handepay Limited
  • Inspire Payment Services Limited
  • ResQ Limited
  • Seymour Direct Limited
  • SumUp Payments Limited
  • Take Payments Limited
  • The Redwood Group and Associates Limited
  • WorldPay (UK) Limited
  • YUMAPOS UK LTD
Our Products
  • Business Accountancy
  • Business Epos Systems
  • Business Telephone Systems
  • Commercial Waste Collection
  • Digital Marketing
  • Fleet Tracking
  • Invoice Finance
  • Merchant Accounts
  • Website Design
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