If you’re setting up a new business, you might be considering using PayPal UK Business to get paid, either by invoicing clients, taking payment online via your website, or even in person using a PayPal Here card reader.
Before you get started though, it pays to look at the process involved, the wide variety of options open to your business and — importantly — the costs of all of them. If you’re planning to expand your business globally, or will be working with clients based overseas, then it’s especially useful to note the PayPal UK Business international fees. You might find you get a better deal with a specialist in international money transfers, such as TransferWise. More on that later.
This article will cover:
- A multi-currency account that could save you a lot of hassle and fees
- How to get paid on PayPal: Step by Step
- How it works when someone pays you through PayPal
- How you set up PayPal to receive payments
- The fees you’ll be charged for using PayPal
- How you can avoid PayPal fees
- Getting paid through PayPal instantly
- How to get cash from PayPal
Let’s get started. Here’s all you need to know about getting paid with a PayPal UK Business account.
Old-world bank accounts only work properly in one country. They hold money only in one currency. And it gets expensive when you try to use them across borders.
The TransferWise borderless account solves all this. It’s not a bank account — it’s better. Global banking the way it should be.
With the borderless account, you get your very own local bank details for several regions around the world. So you can pay and get paid locally.
You can store, send, receive and organise your money in dozens of currencies internationally, without crazy fees or even-crazier exchange rates. Just a small, fair charge when your money moves between currencies.
The borderless account lets you:
- Sign up for free
- Say goodbye to frustrating monthly fees and account balance minimums
- Receive domestic payments in several regions — like the UK, the EU, the US, and Australia — by generating your own domestic bank details
- Store your money in dozens of currencies and convert between them at the real mid-market rate for a small, fair fee
- Make international money transfers to over 50 nations at the same exchange rate you find on Google for a fair fee — always stated upfront
- Use your TransferWise debit Mastercard to spend locally and abroad in dozens of different currencies (available in select countries)
If you want to use a PayPal UK business account for your new venture, you’ll have to take a few steps to get started.
You can upgrade your PayPal personal account to a business account if you’re a sole trader — but if you’re operating any other type of business you’ll need to open a new a business account.¹
To upgrade your personal account, you click on the settings tab, and select account options. Here you can choose to upgrade to a business account, and follow the steps set out.¹
If you need to set up a new PayPal business account, you can go to the PayPal UK Business website listed as source 2 at the end of this article.²
As part of the verification process for receiving payments on PayPal, you might have to give some further information, including confirming your email address and bank account.³ Whether or not this is needed depends on how your account was initially set up.
This is where you’ll have the most decisions to make. PayPal offers a load of different options to accept payments, depending on the sort of business you run. There are different costs associated with different options — make sure you’re clear on the PayPal fees before you decide what’s best for your business.
You can use PayPal to be paid online, or in person. Depending on the business you run, you might add a checkout button to your online store, or send an invoice to a client which they can then pay instantly via PayPal. Or, if you trade in person, you can accept contactless payments using chip and PIN cards, and the PayPal app, in most places in the UK.³
Some options allow you to set everything up yourself, even if you’re not a developer. Other options involve working with a PayPal partner like Shopify or Woocommerce to allow customers to make payments.³
Step 4: Get started taking PayPal payments in your online store, using PayPal invoices, or taking payment in person with a PayPal Here card reader
Once you’ve decided how you want to use PayPal to take payments for your business, you can get started. This could be as simple as adding a button to your webpage or choosing an online shopping provider already integrated with PayPal like Magento or PrestaShop.⁴ Or, if you choose an off-the-shelf option, you may need to follow further steps, such as ordering a PayPal Here card reader to take payment in person.⁵ If you don’t deal in a lot of transactions everyday, you may still prefer the more personable touch of creating a custom invoice and sending it to your clients.⁶
In many instances, once the customer has made payment, the money is deposited in your PayPal wallet within just a few minutes.³ However, there are some fee structures and payment methods you may choose which will delay access to your customers’ funds for 1-2 business days.⁷
But after the money is available, you can then withdraw the cash to your bank account, which takes a further couple of hours usually and you’ll need to do manually — but more on that in the section on getting cash from PayPal later.
To make sure you can receive payments through your PayPal UK Business account, as mentioned previously, you’ll need to have confirmed your email address³ and given information about your business which may also include your linked bank account and proving that you are the owner. This is part of the process of being verified by PayPal, and covers the legal information needed to allow you to trade through PayPal.³
There are fees to use PayPal to take payments. In fact, likely far more than you’d realize. These vary depending on how you choose to use PayPal, and the volume and type of payments you’re receiving. Here’s an overview of the fee structure.
|PayPal Merchant Service||PayPal UK Fees⁽ⁱ⁾|
|Add PayPal to your existing checkout⁷|
|Add PayPal button for payment on your existing website⁷|
|Accept debit or credit card payments on your website or over the phone⁷|
|Accept contactless and Chip and PIN payments in person⁷|
|Accept card payments using a magnetic swipe card, or by manually entering the details (PayPal HERE)⁷|
|Send invoices and be paid via PayPal|
⁽ⁱ⁾ Fees correct per available resources on PayPal UK website on 14 May 2018. Please double check PayPal site for the most up-to-date pricing.
As you may have already guessed, the above includes only base costs. PayPal is quick to point out that additional fees may apply. In fact, if you and your customer are in 2 different countries or their card is attached to a non-UK bank account, you’ll find a whole host of additional cross-border and currency conversion costs.
But seeing a load of confusing tables doesn’t help much sometimes. So if you’d like to see an independent study of just those business cross-border costs through PayPal and what they add up to, check out this cost savings comparison article to see what several transactions really cost when they were sent internationally.
If you’re using your PayPal UK Business account to take payment from customers and clients then you’ll struggle to avoid the fees set out above. If you are used to sending invoices, or your clients and customers can easily send you a local bank transfer in regions like the UK, the US, the Eurozone, or Australia, a great option may be for you to set up a TransferWise borderless account and activate local bank details in any of those regions. That way you can receive payments fee-free, and with no poor exchange rates added to the mix.
Or, to reduce the fees you pay, you could consider a number of alternative options to PayPal.
If you’re working with customers and clients based abroad, the PayPal UK international transaction fees are particularly painful. To access low cost international money transfers, which use the real, mid-market exchange rate without markup, ask your clients to pay you using TransferWise instead. You could avoid PayPal international transaction fees altogether, and save yourself up to 9x on the same transaction.
If you’re paid through PayPal, in normal circumstances it’ll take just a few minutes for the cash to arrive in your PayPal account.³ Although with some payment methods you may have to wait until the next business day.⁷ You can then either spend it from your PayPal wallet, or withdraw it to your linked bank account. There’s more on how to withdraw cash from PayPal in the next section below.
Once you’ve been paid on PayPal, you’ll want to move your money to your own bank account so you can spend it. Here’s how:¹²
- Log in to your PayPal account
- Click on Money, and then Transfer Money
- Decide how much you want to withdraw to your linked account. Enter the amount, and click the bank account you want to move your funds to
- Click continue, and once you’re sure the details are correct, click submit
Your money will be in your bank account within a couple of hours if your bank account is located in the UK.
It’s important to remember that PayPal UK Business only offers fee-free withdrawals to sterling denominated bank accounts within the UK. If you want to withdraw your money to an account which operates in a different currency or is in a different country, there will be a fee to pay.¹² In cases like this, the TransferWise borderless account could be your answer to avoiding those fees, by allowing you to generate local bank details in regions like the UK, the US, the Eurozone or Australia and receive payments locally, fee-free.
PayPal UK Business offers a dazzling array of options for people holding a business account, with different payment methods, integration options, and partners who can help you take payment via PayPal. However, all this comes at a cost. If you’re concerned about the fees involved in running your business using PayPal payments, it’s worth checking out alternatives — especially if you have international clients. Check out specialists in international money transfers, like TransferWise, and see if you can save your business, and yourself, money.
- https://www.paypal.com/gb/selfhelp/article/how-do-i-upgrade-my-paypal-account-faq1317/1#personal (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/merchant (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/get-started-with-paypal (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/standard?ver=registered (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/how-to-use-paypal-here (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/email-invoice?ver=registered (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/paypal-fees (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/cross-border-and-conversion-fees#currencyconversion (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/express-checkout (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/standard (14 May 2018)
- https://www.paypal.com/uk/webapps/mpp/credit-card-reader (14 May 2018)
- https://www.paypal.com/uk/selfhelp/article/how-do-i-withdraw-money-to-my-local-bank-account-faq1189/1#business (14 May 2018)
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| This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. |
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