PayPal – business banking analysis and reviews

Last updated on 29 August 2023

PayPal business accounts are a little more limited in the UK when compared to other territories like the US – British businesses will not be able to apply for a PayPal debit card or unsecured small business loan – but it’s a simple and reliable way to receive and hold funds in a range of currencies. Our PayPal business account review explains all.

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PayPal business banking services

Pros and cons of PayPal for business services

Pros of PayPalCons of PayPal
Easy receive payments and hold a balance No debit card so cannot be used offline
Instant, free transfers to a bank account No credit streams for business customers
Protection provided to business sellers Fees apply when receiving funds
Good customer service Payments are not FSCS protected and can be disputed
Pros and cons of Paypal for business

Business current accounts

PayPal does not offer business bank accounts to business customers in the classic sense, but you can hold funds that you receive in a PayPal account and transfer them to a traditional bank account upon request. There is no charge for these bank transfers.

If you run an online store, it is easy to set up PayPal compatibility to receive payments by debit card, or consumers can pay using their own PayPal account. PayPal allows customers to pay their invoice in three monthly payments, but you will receive the full balance at once. PayPal accepts responsibility – and risk – for the payee failing to meet their financial commitments. 

Businesses and sole traders that do not run an online store can still raise invoices within the PayPal app or website and receive funds into a PayPal account. 

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Any payments received through PayPal using a business account will be subject to a fee of 30p plus a percentage of the invoice value. This will vary between 1.2% and 2.9%, depending on the funding source. This fee will automatically be removed from your PayPal balance upon receipt of funds.

Business overdrafts

Not offered by PayPal. See best business overdrafts.

Business savings accounts

Not offered by PayPal. See best business savings accounts.

PayPal at a glance

Phone number020 794 93272
App downloadsiOS; Android
Websitewww.paypal.com/uk/business
Number of branchesN/A
FSCS protected?No
Founded1998, California
Key information

Other business finance products

PayPal does not provide additional finance products to UK account holders. See business loans or asset finance.

PayPal reviews

What are other business banking customers saying about PayPal Business?

Review platformScoreNumber of votes
TrustPilot1.3/524,535
FeefoNot reviewedN/A
Reviews.co.ukNot reviewedN/A
Smart Money People4.95/52,885
Which?Not reviewedN/A
Average score3.125/527,420
Paypal business reviews and ratings

PayPal business eligibility criteria

Any sole trader or SME that can prove they are aged 18 or older and based in the UK will be welcome to open a PayPal business account, or convert a personal account for business use.

PayPal business finance alternatives

There are many alternative payment portals that can be added to a website if you do not care for PayPal, though few of them enjoy the same level of brand recognition, especially among consumers. Consider using Skrill, Revolut, Square, Payoneer, or Stripe to receive business funds owed to you if accepting payment directly to a bank account is not an option.

PayPal additional considerations

As PayPal is not a bank, your funds will not enjoy FSCS protection, and transactions are open to dispute. You will be at the mercy of an independent decision made by PayPal if a customer disputes a transaction or purchase made through PayPal, which could leave you out of pocket.

FAQ

Is PayPal Debit a proper bank?

No, PayPal Debit is not a traditional bank. It’s an electronic payment service that allows you to make purchases with your own funds without having to use traditional banking institutions. PayPal Debit can be used just like a debit card from your primary bank account, but all transactions are processed through the PayPal system instead of a regular bank.

How to open a PayPal Debit business account?

To open a PayPal Debit business account, you will need to have an existing PayPal account. You can then go to the “PayPal Business” page and click on the “Sign Up” button. Here, you will be asked to provide some basic information such as your name, address, email address, phone number and other relevant information. Once all of the information is submitted, your PayPal Debit business account will be ready to use. To begin using it, you just need to link your bank account and add funds to your PayPal balance. You can then start making payments with the PayPal Debit card or transfer money from one PayPal account to another.

What fees does PayPal Debit charge?

PayPal Debit charges a range of fees, depending on the type of transaction you are making. For example, when you use your PayPal Debit card to make purchases, there is typically a 2.9% + £0.30 fee assessed on each transaction. Additionally, when transferring funds from one PayPal account to another, there may be a fee of up to 2.9% of the amount transferred, plus a fixed fee depending on the currency being used.

What services does PayPal Debit offer for businesses?

PayPal Debit offers businesses a variety of services, including the ability to accept payments from customers who use PayPal accounts. Businesses can also use PayPal Debit to pay for goods and services purchased online, as well as transferring funds to other businesses or individuals using their debit card. Additionally, businesses can access the funds in their PayPal balance with the PayPal Debit card, and make purchases online or in-store. Finally, businesses can access a range of data and analytics from their debit transactions to help them better manage their finances.

What types of payments does PayPal Debit accept?

PayPal Debit accepts payments from customers with PayPal accounts as well as debit and credit cards. Additionally, they accept payments via ACH transaction (Automated Clearing House), which is an electronic network used to transfer funds between financial institutions. They also offer solutions for businesses that need to receive international payments, such as through Western Union money orders or via international credit cards. Finally, PayPal Debit also supports digital invoicing and customer billing through their integrated platform.

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Reviewed by , Managing Director

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