In this tutorial post, I’ll show you how to create a PayPal business account so that you can connect PayPal to your website and begin taking online payments and online donations directly on your website.
It’s a fairly simple process, but some information will be required on your side, including:
- Business Address
- Business EIN (Federal ID number)
- Business Bank Account Info
- Owner’s Social Security Number
Benefits of the PayPal Business Account
Personal PayPal accounts are meant for smaller volume and therefore limit you to only $500 per month of transfers. This may not be enough volume for your organization, and therefore a PayPal Business account will be required. A PayPal business account will not limit you as to the dollar amount or number of transactions and transfers you can have. This is better for organizations active with online payments.
Business accounts will give you additional management options for your transactions through the settings and API functions for website and other online integrations.
Instructions to Create a PayPal Business Account
Step 1: Sign Up
From the PayPal home screen http://PayPal.com choose SIGN UP in the top right.
Choose Business from the radio button options, and click CONTINUE.
Step 2: Choose Account Type
By default, checking out with PayPal requires a redirect from your website or app to the PayPal website for payment. That is standard and included at no cost in most shopping carts, like WooCommerce for WordPress. This is known as PayPal Payments Standard.
PayPal standard carries no monthly fee – just a fee on volume. Currently the fee for using PayPal standard is 2.9% of each transaction plus a transaction cost of $0.30 per transaction. For example, a $100 donation through PayPal standard would cost you $2.90 plus $0.30 for a total of $3.20 – meaning PayPal would deposit into your bank account a total of $96.80. Current PayPal fees can be found at the PayPal fee page.
Nonprofits receive a discount after confirmation of status – that requires requesting status from PayPal – 2.2% plus $0.30 per transaction. The same example above would then result in a fee of $2.50 and a deposit of $97.50. An organization that runs $50,000 online through PayPal is encouraged to confirm nonprofit status as it has the potential to save you as much as $350 per year.
PayPal Pro costs $30 per month plus the standard volume fees mentioned above. The $30 per month gives you the ability to customize your checkout page or to keep customers on your website without the need to go to the PayPal website and then back to your own website. It also includes a more seamless credit card checkout experience.
In my opinion, unless your company takes in $2,000 or more in PayPal transactions per month you should use the free standard version.
After choosing the option you’ll be taken to the GET STARTED PAGE.
Enter the email address you’ll be using with your account and enter the captcha code. Make sure to use a business email address you control. It’s preferable not to use a personal email address here as to keep these items separate.
You’ll then need to enter some basic business info into the form:
Agree to the information submitted and click CONTINUE.
Step 3: Business Information
At this point you’ll need to start entering specific business information so PayPal can categorize your site. If you are a nonprofit, this is where you’ll choose that option and PayPal will give you info about making contact to get approval on the lower fees.
You’ll also choose a category of business operations and a subcategory. This is for PayPal’s demographic information and doesn’t really affect how your account will operate. You’ll also need to estimate your monthly sales volume.
You’ll enter your EIN number for your business and your business website address.
All of these items are required, so make sure you have them before moving forward with that process. If you do not have an EIN number for your company but rather use your social security number as a sole proprietorship you’d enter your social in place of the EIN.
Step 4: Personal Information
You’ll also be required to enter some personal information here including the social security number (last 4 digits) of the main account holder, date of birth, and home address info.
This is required by banks in the US because PayPal must check this information against the Patriot Act requirements. Specifically, this is to make sure that your SS# is not listed on the terrorist activity list. It sounds crazy, but this check must be done. Whether you know it or not, this is done any time someone tries to open a bank account in the US, obtain a mortgage, credit card, etc. However, PayPal is NOT running a credit report – they’re just checking your SS# against this terrorist watch list.
Again, you will not be able to proceed without entering this information. If you’re uncomfortable adding this information a business account is not for you. Remember, this will be required by any merchant processor.
Step 5: How to Get Paid
Once the personal information is processed, you’ll select how you plan to get paid. Your choices are as follows:
This is not a requirement to fill out and doesn’t really affect your account in any major way. You can skip it if you like by clicking the link on bottom titled “I’ll do this later.”
If you do select options, the account will be finished and PayPal will take you to a screen that suggests a few additional setup items for creating a button to attach to your website and how to apply for a PayPal here device for your mobile devices.
Our plan is to integrate this with a website, so we’ll not be using any buttons. We can skip to the top tab ACCOUNT SETUP.
Step 6: Account Setup
This is the meat of the setup process and where the important integration information takes place. You’ll need to complete this to finish the account setup and make sure your money gets transferred to the right location as soon as possible.
- First, you confirm your email. After account creation PayPal sends you a confirmation email. Check your email and confirm it first. It will be required to make other changes to your account.
- Link your bank account – you can choose from major banks – and login directly for automatic confirmation. this will require entering your bank login information here. PayPal will confirm it and your bank account will be auto confirmed. This is the fastest method of account confirmation. If you use a bank not listed by PayPal you’ll need to select OTHER BANK NOT LISTED and input account information. PayPal will make two small deposits, usually only a few cents each. You’ll login into your bank account within 2 or 3 days and confirm those amounts and the bank part of the process will be complete. This tells PayPal where to send your money and MUST be completed.
- Fill out the Make your Business name clear section with pertinent details from your company. This will show up on receipts and transactions. I can’t stress how important this is. So many companies skip this process and when customers checkout out and get receipts they have no idea from where the charge came because they can’t understand the company name on the receipt. Don’t be that person. Fill out this section and make it easy for people to understand who you are.
Step 6: Other Information
It’s easy to get lost in the account creation setup process in PayPal. It’s user experience and menu leaves alot to be desired. If you ever have trouble, just click the mail icon on the top header to access quick menu areas.
Make sure you follow along with the ITEMS TO DO LIST. That will make sure your account is setup as required and you can begin taking donations right away. These typically include adding a business phone number, mobile phone number for login confirmations or two-step authorization, etc.
API Access for Online Transactions
That’s it, congratulations – you’ve now got a PayPal business account ready to go. If you’re working with a shopping cart like WooCommerce in a WordPress website you’ll need to use an API key. You can get that by navigating to the TOOLS menu on top of the PayPal account. Under the Manage Your Business section you’ll see a computer icon with the title API ACCESS.
PayPal will show you a quick tutorial video. You can skip that and go straight to the API screen.
Step 7: Request API Credentials
In most cases, you’ll use option #2 – Request API Credentials. Click on the link REQUEST API CREDENTIALS and you’ll be taken to that settings page. To continue with this process you’ll need to have confirmed your email address. If you have not yet done that please take a moment and do that now.
At this point you’ll be asked to choose a signature or certificate method. Choose REQUEST API SIGNATURE and AGREE AND SUBMIT.
This will take you to a confirmation screen with API information. This information should be kept in a safe place as it relates your bank info to your PayPal account. It will be used in your shopping cart to make the right connection.
Make a record of this info and then click done. It will be hidden in the future.
This information should also be sent to your developer for use in your online cart, particularly the API Username, Password, and Signature.
Congrats – now you’ve got a business account AND you’re setup to use it online with your website. If you have any questions about the process please leave a comment here.
Good luck taking donations and selling online!
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