The simplest way to take payment through PayPal
PayPal lets you receive money from customers in three main ways: they can send you money directly if they have a PayPal account, they can pay you through a PayPal payment button or link you create, or they can pay you in person using a card reader. The method you choose depends on whether you run a business, how often you receive payments, and whether your customers already use PayPal.
If you are just starting out and receive payments rarely, the simplest route is to ask customers to send you money directly through their PayPal account — no setup required beyond having a PayPal account yourself. If you sell regularly or want to accept payments from people without PayPal accounts, you will need to create a payment link or button, which takes about ten minutes.
Key Takeaways
- You need a PayPal account before you can receive any payments; a basic Personal account is free to create and takes a few minutes.
- Direct transfers from one PayPal user to another are the fastest option if both people already have accounts, though PayPal charges a small fee for goods and services payments.
- Payment buttons and links let customers pay you without having a PayPal account, and you can create them for free in your PayPal account settings.
- PayPal charges different fees depending on the payment type: sending money between friends is cheaper than receiving payment for goods or services.
- Money you receive goes into your PayPal balance first; you can leave it there or transfer it to your bank account, which usually takes one to two business days.
Creating a PayPal account to receive payments
Start by going to paypal.com and clicking "Sign Up" in the top right. You will choose between a Personal account and a Business account. A Personal account is free and works for most people who receive occasional payments. A Business account costs nothing to open but is designed for people who sell regularly and want to track inventory or create invoices.
You will need to provide your email address, create a password, and confirm your identity with a phone number. PayPal will send you a verification code by text or email. After you verify, you can add a bank account or debit card so PayPal can confirm you are who you say you are — this step is optional at first but required before you can transfer money out.
How to receive money directly from another PayPal user
If someone already has a PayPal account and wants to send you money, they log into their account, click "Send Money," enter your email address or phone number, type the amount, and choose whether it is a personal transfer (like paying back a friend) or a payment for goods or services. Personal transfers cost the sender nothing. Payments for goods or services cost the sender a small percentage plus a fixed fee — the exact amount depends on the country and payment method.
When they send the payment, it lands in your PayPal balance when ready. You will see it in your account and receive an email notification. You do not have to do anything to receive it — just have an active PayPal account with the email address or phone number they use.
Creating a payment button or link for your website or social media
A payment button or link lets customers pay you without having a PayPal account. They can use a debit card, credit card, or their own PayPal account. To create one, log into your PayPal account, click "Tools" in the top menu, and select "PayPal buttons." Choose what you are selling — a single item, a subscription, or a donation — and fill in the details: the item name, price, and description.
PayPal will generate a button or a link. If you have a website, you can paste the button code into your site's HTML. If you do not have a website, you can copy the link and share it anywhere — email, text, social media, or a messaging app. When a customer clicks the button or link, they are taken to a PayPal checkout page where they enter their payment information. The money goes into your PayPal balance when the transaction completes.
You can create as many buttons and links as you need, and each one can track a different product or service. PayPal keeps a record of every payment in your transaction history.
Understanding PayPal fees for different payment types
PayPal charges different fees depending on how the money reaches you. A personal transfer from one PayPal user to another costs the sender nothing and costs you nothing. A payment for goods or services — whether through a button, link, or direct request — costs you a percentage of the amount plus a small fixed fee. The exact percentage varies by country and whether the payment is domestic or international.
When you create a payment button or link, PayPal shows you the fee before you publish it. The fee is deducted from the payment automatically, so if someone pays you $100 and the fee is $3.20, your PayPal balance increases by $96.80. You do not have to calculate or pay the fee separately.
Moving money from PayPal to your bank account
Money you receive stays in your PayPal balance until you transfer it out. You can leave it there and use it to pay other people or make purchases, or you can move it to your bank account. To transfer, log into PayPal, click "Wallet" at the top, then "Transfer Money," and choose "Transfer to your bank." Select the bank account you added during setup, enter the amount, and confirm.
The transfer usually takes one to two business days. PayPal does not charge you to transfer your own money to your bank account. If you transfer on a Friday, the money typically arrives on Monday or Tuesday, depending on your bank's processing speed.
What happens if a customer disputes a payment
If a customer claims they did not receive what they paid for or says the payment was unauthorized, they can file a dispute with PayPal. PayPal will contact you and ask for evidence that you delivered the goods or service — a tracking number, a receipt, a screenshot of delivery, or a message from the customer confirming they received it. You have a set number of days to respond.
If PayPal rules in the customer's favor, the payment is reversed and the money comes out of your PayPal balance. If your balance is too low, PayPal may charge your linked bank account or debit card. To protect yourself, keep records of what you sold, when you delivered it, and any communication with the customer.
Frequently Asked Questions
Do I need a business license to receive payments through PayPal?
No. PayPal does not require a business license to open an account or receive payments. However, the money you receive is considered income, and you may owe taxes on it depending on your location and how much you earn. Check with a tax professional or your local tax authority about your obligations.
Can someone pay me through PayPal if they do not have a PayPal account?
Yes, if you create a payment button or link. They can pay with a debit card or credit card without signing up for PayPal. If you ask them to send you money directly, they will need a PayPal account first.
How long does it take to receive money through PayPal?
Money from a payment button, link, or direct transfer appears in your PayPal balance when ready. Transferring that money to your bank account takes one to two business days. If you are receiving a transfer from someone else's PayPal account, it also arrives when ready.
What if I want to refund a customer?
Log into PayPal, go to your transaction history, find the payment you want to refund, and click "Refund." You can refund the full amount or a partial amount. The money goes back to the customer's original payment method, and the refund usually processes within a few days.
Can I receive payments in a different currency?
Yes. PayPal can receive payments in many currencies and convert them to your home currency, though there is a conversion fee. You can also keep the money in the original currency in your PayPal balance if you prefer. Check PayPal's currency list to see which ones are supported in your country.