PayPal Review (For Businesses)
- Trusted by consumers
- Flat-rate pricing
- Multiple pricing plans available
- Good for low-volume merchants
- Extensive integrations
- Good developer tools
- All-in-one payments system
- Account stability issues
- Inconsistent customer support
- Not suitable for high-risk industries
- New pricing scheme hurts small-ticket merchants
PayPal For Business Overview
With no contracts, no monthly fees, and a robust suite of tools for merchants to sell virtually anywhere, anytime, there are plenty of reasons to recommend PayPal for businesses. One factor in PayPal’s broad appeal is that unlike the vast majority of merchant accounts or payment processors out there, you can implement PayPal as your exclusive means of accepting payments or as a supplemental option.
PayPal introduced a new fee schedule on August 2nd, 2021, and the $0.49 fixed fee for most transactions has alienated small-ticket merchants and content creators who receive lots of $1 donations through PayPal. In this PayPal review, we’ll help you understand this new pricing scheme. Just keep in mind that there are still no contracts to sign and no early termination fees to worry about. And as countless integrations are offered, you’ll have plenty of options for syncing PayPal with your shopping cart, your accounting service, or your shipping software. PayPal also provides its own mPOS app, PayPal Zettle.
The fact that PayPal’s new pricing hurts those who have long stood the most to gain from the company’s convenient services doesn’t sit well with us, and we’ve lowered the rating to 3.5 stars. However, we’ll be monitoring how PayPal responds to the outrage its new pricing scheme has caused among its user base.
Read our full PayPal review for more details about features and pricing. If you like what you see, check out our piece on how to set up a PayPal business account. And if it’s not for you, we’ve highlighted some alternatives to PayPal at the end of this review.
Table of Contents
Accepting Online Payments With PayPal
For a vast majority of merchants, getting set up with PayPal means deciding how you want to accept payments online. Now, this decision is more complicated for would-be PayPal merchants than it once was because it involves a) deciding whether you want Standard or Advanced Credit & Debit Card Payments, and b) deciding which of the three PayPal payment plans you want to sign up for.
Regarding the former:
- Standard Credit & Debit Card Payments: This is PayPal’s default means of accepting card payments. With Standard payments, you can offer PayPal’s standard payment options on your checkout page so your buyers can pay with PayPal, debit and credit cards, Pay Later options, Venmo, and alternative payment methods.
- Advanced Credit & Debit Card Payments: Advanced payments gives you the same payment options as Standard while also giving you the ability to customize your credit card fields. It’s also required if you want to enroll in Chargeback Protection, use the Virtual Terminal, and/or upgrade your payment plan to Payments Advanced or Payments Pro. Additionally, with Advanced card payments, you get a lower credit/debit processing rate than with Standard card payments, though the rate you’ll ultimately pay will depend on whether you get Chargeback Protection and whether you sign up for one of PayPal’s more advanced subscription plans, which we’ll describe below. To use Advanced Credit & Debit Card Payments, you’ll need to specifically request it and supply PayPal with additional information about your business.
As for subscription plans, PayPal offers three options for web payments:
- PayPal Checkout (formerly Express Checkout)
- PayPal Payments Advanced
- PayPal Payments Pro
PayPal Checkout is an easy solution if you just want to add PayPal as a payment option on a website where you already accept credit cards or integrate with an eCommerce provider. To implement Checkout on your website, you may need a developer, but it won’t take a lot of work after that point. PayPal does the maintenance and upkeep for you. Here’s what you get when you use Checkout:
- PCI Compliance: Because PayPal redirects customers to its site to complete the transactions, you don’t have to worry about PCI compliance at all.
- Contextual Checkout Buttons: PayPal will use what it knows about your customer to display “smart” checkout buttons tailored to the customer. For example, Venmo users will see a Venmo checkout option. PayPal Credit (formerly “Bill me later”) will also appear as an option on eligible purchases. Check out our guide to selling with buy buttons to learn more!
- Localized Payment Methods: PayPal is in the process of adding localized payment methods for customers across Europe. It’s already something we see with Stripe, so it’s hardly surprising to see PayPal implement it as well. In addition to existing support for SEPA Direct Debit (Germany), PayPal is adding support for iDEAL (the Netherlands), EPS (Austria), Giropay (Germany), MyBank (Italy), and Bancontact (Belgium), with more to come in the future.
PayPal Payments Advanced
PayPal Payments Advanced (which does not refer to Advanced Payments as described above — sorry, it’s complicated!) is more involved than PayPal Checkout. That’s because it gives merchants more control and customization with their payment process. Unlike PayPal Checkout, PayPal Payments Advanced will cost you $5/month to use. Payments Advanced includes all the eCommerce integrations that PayPal Checkout offers but does not offer the “smart” checkout buttons. Here’s what you do get, though:
- Hosted Checkout Page: If you’d rather keep your customers on your website throughout the entire checkout process, it’s worth looking at the Advanced plan. PayPal makes it easy for you to customize the design of your checkout. However, you do take some of the PCI burdens onto yourself in the process. PayPal makes it simpler with tools such as transparent redirects. At a minimum, you can expect to have to do self-assessments and quarterly scans to maintain your PCI compliance.
- Customizable Payment Buttons: With payment buttons, you can create an online shop where you can sell one item, or 10, or as many as you want. PayPal’s button builder tools allow you to customize the look of the buttons as well as how some aspects of the checkout process works (whether you want to go immediately to purchase or allow customers to add items to a cart). Nonprofits can also create donation buttons with the option to make one-time or recurring donations.
PayPal Payments Pro
PayPal Payments Pro is for merchants seeking complete control over the entire checkout process. PayPal Payments Pro is the most customizable of PayPal’s online payment processing options, though it will cost you an extra $30 per month. The main advantage Payments Pro has over Payments Advanced is that Payments Pro gives you access to the virtual terminal, which you otherwise have to pay $30/month for as a standalone charge.
- Virtual Terminal: If you want to accept payments over the phone, PayPal’s virtual terminal will let you key in card numbers from a browser window. However, $30/month is a pretty hefty price to pay for this feature considering both Square and Shopify offer it at no additional charge.
- Recurring Billing: Technically, neither PayPal’s Payments Advanced nor their Payments Pro plan includes recurring billing. It’s an add-on service that costs an additional $10/month. Again, I think that’s pretty expensive given that Stripe offers much better pricing and more flexible tools in this regard. Note that with PayPal Checkout, you get recurring billing for no additional monthly charge.
Please note that PayPal’s service plan offerings seem to be in flux. For instance, until recently, PayPal had been offering a plan called PayPal Payments Standard, a plan which offered customizable payment buttons but not hosted checkout pages. This plan, while still existing for current users, does not seem to be currently offered for new merchant signups. What’s more, PayPal’s Help Center does not yet contain any information regarding Payments Advanced, so we wouldn’t be surprised if PayPal’s plan offerings undergo further changes in the near future.
For a visual reference detailing the three payment plans PayPal currently offers, have a look at the following chart.
|Plan Name||Monthly Cost||Payment Buttons||Virtual Terminal||Hosted Checkout||Recurring Billing|
|PayPal Checkout||Free||Contextual (“Smart”) checkout buttons||No||No||Yes, for no additional monthly charge (Customer must have a PayPal account)|
|PayPal Payments Advanced||$5/month||Customizable payment buttons||No||Yes||Yes, for an additional $10/month|
|PayPal Payments Pro||$30/month||Customizable payment buttons||Yes||Yes||Yes, for an additional $10/month|
In addition to the above, PayPal offers a special payments plan for enterprise-level businesses called PayPal Enterprise. PayPal hasn’t released a great deal of detailed information about the plan, but it does tout an optimized processing engine to remove friction at checkout, a brandable web portal, granular data analysis, and more.
PayPal Merchant Fees & Rates
All PayPal services come with no annual fee, no setup fee, no PCI compliance fees, and no cancellation fee. Except for a few optional software-related fees, you won’t have to worry about anything other than payment processing costs.
PayPal’s pricing used to be very straightforward, even if those costs were a bit higher than most traditional merchant accounts. Unfortunately, the recent changes made to PayPal’s pricing and feature offerings make the job of explaining PayPal’s pricing considerably more difficult. I’ve laid out the new fees below, but you can also check out our other article, How Much Does PayPal Charge? The Complete Guide To PayPal Credit Card Processing Fees. This article explains PayPal’s pricing structure in finer detail.
Overall, while PayPal’s new pricing scheme will result in many merchants — particularly those using PayPal Checkout as a means of accepting PayPal digital payments as a supplementary payment option — paying more in processing fees than they had previously, new merchants may find the lack of additional fees more cost-effective than an interchange-plus plan.
Under PayPal’s new pricing plan (introduced August 2nd, 2021), your transactions fees will be as follows:
|Fee Name||Fee Amount|
|PayPal Digital Payments (PayPal Checkout, Pay with Venmo, PayPal Credit, Pay in 4, PayPal Pay with Rewards, and Checkout with Crypto) sales||3.49% + $0.49 per transaction|
|Online credit/debit sales (Standard Credit & Debit Card Payments)||2.99% + $0.49 per transaction|
|Online credit/debit sales (Advanced Credit & Debit Card Payments)||2.59% + $0.49 per transaction (3.5% for Amex transactions)|
|Online credit/debit sales with the Payments Advanced or Payments Pro plans||2.89% + $0.49 per transaction (3.5% for Amex transactions)|
|Chargeback Protection (requires Advanced Credit & Debit Card Payments)||An additional 0.40% per transaction (0.60% per transaction if you get “Effortless” Chargeback Protection)|
|Swiped/dipped/tapped mobile and in-store transactions||2.29% + $0.09 per transaction (2.7% per transaction for legacy PayPal Here users)|
|Keyed-in mobile and in-store transactions||3.49% + $0.09 per transaction|
|Virtual terminal transactions||3.09% + $0.49 per transaction (3.5% for Amex transactions)|
|PayPal payouts||2% (max $1) using the online form, $0.25 per payout using the API|
|Chargebacks||$20 per chargeback|
|International transactions||1.5% cross-border fee|
|Refund fee||No additional fees are charged to make the refund, but the fees you originally paid to receive the payment are not returned to you|
|Instant transfer fee||1.5% of the transfer amount (max $15)|
Other PayPal Fees
PayPal sports a couple of alternative rate offerings: a microtransactions plan and nonprofit discounts. PayPal’s micropayments plan had been open to all merchants, though I’ve been seeing reports recently that some users have been unable to sign up for it. This is particularly unfortunate for small-ticket merchants looking to mitigate the effects of the new $0.49 per-transaction fixed fee. We’ll continue to follow the situation, but here is the Micropayments rate that is still shown on PayPal’s official pricing page:
- Micropayments Rate: 4.99% + $0.09 per transaction
Qualified 501(c)(3) organizations that go through the verification process are eligible for a discount for online transactions:
- Nonprofit Discount Rate: 1.99% + $0.49 per transaction
PayPal doesn’t offer a discounted rate for in-person transactions. This nonprofit rate applies only to online sales or donations. Read our PayPal For Nonprofits Guide: How To Accept Donations Via PayPal & More article to learn more about what PayPal can offer nonprofit organizations.
Remember that with PayPal Checkout, you’ll pay no monthly fees, but if you prefer to keep customers on your page, use customizable checkout buttons, and/or use a virtual terminal, you’ll need either PayPal Payments Advanced or Payments Pro:
- Paypal Payments Advanced: $5 per month
- Paypal Payments Pro: $30 per month
PayPal Payments Advanced & Pro don’t include an option for Recurring Billing. If you want to offer subscription services, that will run you an extra $10 per month on top of the Pro plan. PayPal offers free recurring billing for PayPal Checkout users but not PayPal Advanced/Pro users.
Finally, PayPal offers its Payflow gateway to process payments. It works with most payment processors. If you want to sell online but don’t want to use PayPal as your primary payment processor and your chosen processor doesn’t offer a gateway, Payflow is an option. Payflow supports two plans:
- Payflow Link: This pay-as-you-go option costs $0.10 per transaction with no setup or monthly fees. With Payflow Link, you embed a checkout form on your website that will redirect to the PayPal site to complete the transaction. Payflow Link also adds PayPal and PayPal Credit buttons.
- Payflow Pro: Payflow Pro costs $25/month, and there’s a relatively high $99 setup fee. Plus, you’ll still be paying the $0.10 per-transaction fee. The PayflowPro plan gets you a customizable checkout page that’s hosted on your website, with the ability to add PayPal and PayPal Credit options.
PayPal Business Products & Services
Before delving into the full range of PayPal products, we should establish upfront that PayPal is a third-party processor (also known as a payment service provider [PSP] or an aggregator).
The primary difference between a third-party processor and a traditional merchant account provider is that instead of providing merchants with their own merchant account, PSPs aggregate all their merchants into one enormous merchant account. One unfortunate side effect of this arrangement is that merchants bear an increased risk of account instability. Holds and terminations are all too common due to the risk management policies required for PSPs to function. Check out our PayPal vs. merchant accounts article to get the entire scope of the differences between these two fundamentally different payment processing methods.
PayPal Tools For Businesses
- PayPal Commerce: Formerly known as PayPal for Partners, the PayPal Commerce Platform is a payments solution for marketplaces, crowdfunding platforms, and other platforms for merchants and fundraising teams. Features such as vaulting (the secure storing of customers’ credit card data to streamline the checkout process) and channel billing agreements are available on an approval basis.
- PayPal Zettle: This is PayPal’s new mobile processing app. While it’s not the most feature-laden out there, it’s quite solid, and features a more robust inventory system and card reader than PayPal’s other mPOS system, PayPal Here (which is no longer available to new merchants but which continues to operate for current PayPal Here merchants). The fact that your funds get deposited into your PayPal account along with the rest of your online sales is pretty nice. You don’t have to pay for any subscription or software fees; you just pay the processing costs.
- POS System Integrations: If PayPal Zettle isn’t robust enough for your needs, you can integrate PayPal into one of the company’s partners for POS solutions. You’ll still pay for the software subscription, but PayPal charges nothing except the transaction fees and hardware. Check out the Integrations & Add-Ons section below for a better look at your third-party integration options.
- Online Invoicing: Consultants and contractors can use PayPal’s invoicing features for invoicing their clients for the same rate as regular web transactions. PayPal’s invoicing tools are pretty solid, allowing you to add a tipping option to the invoice and even setting up installments. Recurring invoicing is supported as well. Both the lifecycle status and the payment/refund status of an invoice are tracked. You can also create custom billing apps with PayPal Invoicing APIs.
- Payflow Payment Gateway: The gateway comes automatically bundled with PayPal’s online processing tools, so it’s not something many people will think about. However, PayPal’s gateway is available as a standalone product to businesses that have a credit card processor but no gateway. See the PayPal Merchant Fees & Rates section below for more pricing information.
- Marketing Solutions: Honestly, PayPal’s “Marketing Solutions” makes me think of a pared-down Google Analytics with some PayPal tools thrown in. But if most of your customers use PayPal, or you want to increase conversions on your site, it’s certainly worth looking at. The Marketing Solutions package is available with all of PayPal’s online processing options, including Checkout, and now it’s available outside the US as well. “Shopper Insights” lie at the heart of this package, and these insights include sales conversion rates, average purchase size, and shopper device type.
- PayPal Payouts: Want to pay employees or contractors via PayPal? The PayPal Payout feature allows you to send multiple payments at once rather than one at a time, using either a spreadsheet or the PayPal API. Plus, you’ll save money compared to PayPal’s standard rates. Check out the PayPal Merchant Fees & Rates section for more information.
- PayPal.me: PayPal sports a Venmo-style payment solution in the form of PayPal.me. With this app, you can send and request payments to/from friends, family, customers, and clients. The other party doesn’t even need to have a PayPal account. While personal payments do not incur any fees, commercial payments are charged the same 3.49% + $0.49 rate as payments made via PayPal proper. Be aware that PayPal is watching to make sure you don’t try to pass off commercial payments as personal payments. If you have a PayPal Business account, PayPal will assume that any PayPal.me link associated with your account is commercial by nature and will charge you accordingly.
- PayPal LoanBuilder: PayPal now offers a simple short-term loan service available to merchants regardless of their payment processor. The service requires a credit score of at least 550, but the application process is pretty simple.
- PayPal Developer Tools: PayPal has recently invested some notable efforts into improving its developer tools. These tools include PayPal Checkout for online sellers who opt not to implement an eCommerce integration. PayPal Here SDK is for those of you seeking to add PayPal payments to your own POS system. There’s also a White Label Wallet if you need a branded mobile wallet app that works at the point of purchase at in-person locations. Connect With PayPal is for merchants who want to allow customers to log into your website/app using their PayPal credentials. And, finally, there’s the aforementioned PayPal Commerce Platform.
What’s New With PayPal?
PayPal continues to innovate and regularly rolls out new features. The following features have been added since our February 2020 update.
- Social Media Selling: If you don’t have a website and would prefer to sell items through your existing social media channels, you can create an embedded payment link and post it to your account on Facebook/Twitter/etc. A separate feature, “Checkout on Facebook and Instagram,” allows you to sell products from your Instagram page while letting you use the full ecosystem of Instagram Shopping tools.
- Pay In 4: To compete with the likes of Klarna, PayPal has introduced its new pay later installment option, Pay in 4. This lets your customers pay for purchases in four interest-free payments, with one of those payments being a down payment due at the time of purchase and the remaining three payments being due every 15 days thereafter. The great thing about this feature is that you’ll still get paid the entire amount upfront. Purchases qualifying for Pay in 4 must be between $30 and $600.
- Shipping Discounts: When you create and use an online shipping label in PayPal, you’ll get access to USPS Commercial Base pricing along with UPS discounts — up to 45% off UPS Ground shipments and up to 55% off 2nd Day Air on eligible packages.
- Cryptocurrency Support: PayPal recently announced its intent to get into the booming field of cryptocurrency. US users can now use PayPal to buy, hold, and sell Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. That’s all well and good, but the part of PayPal’s announcement that will affect merchants is that starting sometime early this year (2021), customers will be able to use crypto to pay for purchases from PayPal merchants. Once this policy is enacted and a customer makes a purchase from your site using cryptocurrency, the crypto will be instantly converted to fiat currency, and the transaction will be settled like any other.
- QR Code Payments: PayPal merchants can now use QR codes to accept payments from customers in-store. Just generate a QR code online or in the PayPal Business app, display it by your register, and let customers scan the code to make their payment. It’s a nice contactless payment option, well-suited to the COVID era.
- New Card Reader: When PayPal launched its new mPOS app, PayPal Zettle, in the US, it brought its popular mobile card reader over from Europe. The Zettle Reader 2 accepts contactless, chip, and PIN payments from your customers while also accepting Apple Pay, Google Pay, and Samsung Pay. You can get your first reader for just $29, with each subsequent reader costing $79. Its battery lasts up to 8 hours/100 transactions, but you can also get the Zettle Dock 2 for $49 to ensure that the reader remains charged throughout your sales day.
Funding Options For PayPal Business Users
Money from PayPal transactions is available almost immediately in your PayPal account. You can then spend that balance anywhere that accepts PayPal online or transfer the funds to your bank account. Standard transfers typically take one to two business days and are cost-free.
If you need your funds within minutes, PayPal offers an instant transfer option. It will cost you 1.5% of the transfer volume (capped at $15), which is on par with what Square charges for the same service.
Whether you’re doing a standard transfer or an instant transfer, your debit transfer limits are as follows:
- $50,000 per transaction
- $100,000 per day
- $250,000 per week
- $500,000 per month
If you’re transferring funds to your bank account, there is a $25,000 per-transaction withdrawal limit.
PayPal Business Debit Card
PayPal also has its very own debit card for businesses, the PayPal Business Debit Mastercard. The card gives you fast access to cash from your PayPal account — no waiting for a funds transfer. You can spend your balance at any store that accepts cards or withdraw money from any ATM with a Mastercard, Maestro, or Cirrus acceptance mark. It also makes accounting simpler because you don’t have to use your personal accounts to make business purchases or constantly shuffle funds around.
PayPal Working Capital
If you need a quick influx of cash and don’t want to deal with a loan, PayPal merchants are eligible to apply for PayPal Working Capital. It works like a merchant cash advance where you pay back the financed amount by deducting a small portion of each day’s transactions processed via PayPal. Check out our PayPal Working Capital review for more information.
Contract Length & Cancellation Fee
All of PayPal’s payment solutions are contract-free and have no early termination fee. It really is that simple.
That’s great if PayPal is your starter option, and you want to upgrade to a merchant account later. However, if the rates work for you (particularly as just a secondary option), PayPal will also scale with your business. We rarely find a service that will help you start and stay with you as your business grows, and we like that quite a bit.
Sales & Advertising Transparency
The best thing about PayPal is that its sales and advertising are very upfront. All of the rates are listed in plain sight, so there’s no hidden agenda. PayPal has, over the years, gotten better about disclosing pricing and fees (such as its chargeback fee, which used to be hidden in the fine print).
Most of PayPal’s business comes directly through its website or via referrals. It doesn’t have the traditional sales team “pounding the pavement” and luring in potential customers with too-good-to-be-true deals like some merchant account providers.
Please don’t think that just because anyone can open an account, everyone can process with PayPal. That’s not true, and I think it plays a considerable role in complaints against PayPal. There’s a specific list of PayPal prohibited businesses, which I encourage everyone to check out. You’ll also be under scrutiny as soon as you start processing. If PayPal decides you present an unacceptable risk, it will terminate your account. So make sure you operate transparently and use sound business practices. Check out our guide on how to prevent holds, freezes, and terminations.
PayPal Customer Service & Support
PayPal has several different customer service channels. Depending on your question or problem, you can check out any of these options:
- Community Forum: If you want insights and advice from other PayPal merchants, the community forum is a good place to start.
- Knowledgebase: PayPal’s self-help resources are pretty extensive, both for consumer users as well as merchants. You’ll find a vast array of questions and answers in the searchable database, which should cover most of your needs.
- Phone/Email: Any PayPal customer service review must note that PayPal’s phone support is quite inconsistent, judging from online opinion (see Negative PayPal Reviews & Complaints). Sometimes you’ll get a rep who knows what they’re doing; other times you won’t. My advice is to avoid calling, if at all possible. Answers to the most common problems can be found with just a little bit of searching. Between the knowledgebase, community forum, and quick answers sections, you should be able to find a solution.
- Social Media: PayPal is active on Facebook, but if you want help on social media, you’re better off taking to Twitter, where you can send a tweet to PayPal and get some assistance that way.
- Resolution Center: Through PayPal’s resolution center, a merchant can communicate directly with a buyer to resolve a transaction problem. You can also use it to attempt to resolve an account limitation, to report unauthorized account activity, and ask PayPal to investigate a transaction problem.
One compelling benefit of using PayPal is the sheer volume of users. Any time you encounter an error or a problem, you can google it. The odds are good that you’ll find a solution from another merchant who has already dealt with the same issue. However, when it comes to account issues (such as holds), you’ll need to talk to someone over the phone. If need be, you can go through the BBB (read more about that in the PayPal Customer Reviews & Complaints section).
Integrations & Add-Ons
PayPal integrates with a vast number of applications, from shopping carts to accounting software, shipping applications, and email marketing software. There are just way too many to write out, but you can find the full list on PayPal’s site.
If you are interested in PayPal integrations, here’s a quick primer on some of the options available:
There’s an obvious benefit to having so many integration options: You won’t have to worry about whether your shopping cart is compatible or not because it most likely is. The same goes for major accounting applications, such as QuickBooks Online and Xero. And there’s no shortage of well-known, robust POS solutions for retail stores and restaurants. Plus, PayPal integrates with some more specialized solutions as well.
PayPal Customer Reviews & Complaints
Positive PayPal Reviews & Testimonials
Though you’ll find plenty of negative comments in PayPal customer reviews, there are plenty of positive comments from merchants (and even some developers). Considering over 29 million merchants are using PayPal, this shouldn’t be too much of a surprise. Here’s what the positive chatter in PayPal credit card processing reviews is all about:
- Easy Setup: Most PayPal for business reviews — particularly from business owners — rave about how easy it is to set up a PayPal account.
- Widely Accepted: PayPal has an extensive user base, making it a trustworthy payment option for everyone. If you’re just getting your business off the ground, starting with something such as PayPal is a good choice. The name recognition and trust associated with PayPal (especially with its buyer protections) can be a serious asset in the early days of operation.
- Almost-Instant Access To Cash: Your PayPal transactions clear almost immediately, so you can spend the money in your account as soon as you have it — provided the place where you’re spending it accepts PayPal, of course. If you want your money anywhere, don’t overlook the PayPal Business Debit card. It works like a debit card, but it deducts directly from your PayPal account. And now we have the instant transfer option, too.
- Multiple Products/Services Under One Roof: PayPal offers you everything you need to process online or mobile payments (e.g., payment gateway, payment forms, virtual terminal, invoicing, micropayments, recurring billing, developer tools, etc.). It truly is a solution that will grow with you.
- Transparent Pricing: Every PayPal payment review notes that pricing-wise, what you see is what you get with PayPal. There are no setup fees, annual fees, cancellation fees, or downgrades for sellers.
Negative PayPal Reviews & Complaints
PayPal is a massive company, and like all big companies, there are many complaints. The greatest difficulty with quantifying a negative PayPal account review is the fact that PayPal is also a consumer product. That means a good chunk of the complaints come from users on the consumer end of things. Therefore, the number of complaints about PayPal is not representative of the complaints about its merchant services.
While the number of complaints isn’t particularly helpful, the content of those complaints is. I read over a chunk of the complaints, dating back about 12 months, and one thing stuck out for me.
I was honestly impressed with PayPal’s quality of service. The department handling BBB complaints is full of real people writing the responses and explaining where the problem occurred. They’re genuinely trying to help where they can. If you go through the BBB, the odds are good that you can probably get whatever help you need — it just might take a little while, and you should try going through PayPal’s customer support first.
The BBB is a leading source of information about how a company deals with complaints, but I do check out a few other review sites for more details. For the most part, I see the same trends: a mix of consumer and merchant complaints. Of the merchant complaints, there is one single complaint that dominates all others. It’s not that PayPal’s products are the problem. It’s the service. Specifically, here’s the big issue:
- Withheld Funds, Freezing Of Accounts, & Termination Of Accounts: If PayPal notes any suspicious behavior on your account, it may implement a hold on a certain percentage of your funds, freeze your account, or even terminate your account. Usually, a red flag on your account comes with a request for documents, such as bank statements, photocopies of your IDs, purchase orders, invoices, and more. PayPal uses that information to determine what to do with your account. One of the criteria PayPal uses to flag an account is a sudden spike in processing volume. It also doesn’t like seeing merchants sell goods below cost (an unfortunate tactic used by a LOT of newbie eBay sellers) or merchants selling vague, mysterious products. Anything that indicates an unsustainable business model might be grounds for account termination.
That said, this certainly isn’t a problem unique to PayPal. Other aggregators, including Square and Stripe, have a similar reputation. Such is the nature of the “come as you are” business model. It’s easy to get an account with minimal history, but there’s an inherently higher risk because you’ll be under scrutiny once you get started.
In addition to the withheld-funds issue, here are some other common complaints found in PayPal merchant services reviews:
- High Transaction Fees: Compared to a traditional merchant account, PayPal’s transaction fees are higher. Visa’s wholesale rates for an eCommerce transaction are between 1.5% and 2.4% + $0.10 per transaction. At 3.49% plus $0.49 per PayPal Digital Payments transaction and 2.59% + $0.49 per online credit/debit card transaction, PayPal’s rates are over that amount, even when you factor in a merchant service provider’s markup. However, merchant accounts aren’t always accessible or even viable for low-volume merchants. For those merchants, when you factor in the various costs that a merchant account often generates, PayPal usually breaks even or comes reasonably close. What’s more, you don’t have a contract (or early termination fee) to worry about.
- Inconsistent Phone-Based Customer Service: Most merchants will rarely have to call PayPal’s customer service line. Reviews of PayPal note that the quality of service on the helpline can be inconsistent. Some reps are more knowledgeable than others. The good thing is that PayPal has a whole slew of other service and support options (e.g., the knowledgebase, forum, email, etc.). Barring any account-related problems, chances are you can find your answer without having to call in.
- Chargebacks: Let’s be honest. Chargebacks are the bane of existence for any merchant who sells online. They’re also bad for your account stability, no matter what company you process with. A lot of chargeback-related complaints found in PayPal merchant reviews seem to come from sellers on eBay or merchants who aren’t happy with how a chargeback was resolved. PayPal does offer some limited seller protections for online transactions, but you should brush up on what is and is not covered (eBay sales, for example, aren’t covered).
I should note that most of the complaints about PayPal posted to the BBB are ultimately resolved to the aggrieved party’s satisfaction. Nonetheless, if these complaints make you worried, check out our top selections for small business credit card processing instead. No business is perfect, but you might find that other companies give you a little less reason for concern.
One thing we will be watching is whether PayPal’s new pricing scheme inspires a wave of new complaints from merchants disadvantaged by the changes (primarily low-average ticket sellers and merchants using PayPal Checkout). On the other hand, larger merchants may actually see some savings with these changes.
PayPal is a solid payment option for new businesses, and you should definitely keep it around as a backup form of payment if you sell online. Of course, it functions quite well as your primary payment option as well. Setting up a PayPal business account is quick and painless, the platform is easy to use, and it’s widely accepted. If you own a brand new business and you need to accept payments quickly, PayPal is a good solution.
That said, as your business grows and you exceed $10K in monthly revenue, it may be more worthwhile to pursue a traditional merchant account because the processing costs will be lower. Have a look at our merchant account comparison chart if you’re considering going this route.
Unfortunately, the changes PayPal recently made to its pricing scheme and credit/debit card acceptance methods have made determining your processing fees a much more complex affair, and overall, merchants who mainly accept payments using PayPal Checkout will be paying more in fees. Small-ticket merchants and video streamers who receive lots of $1 tips have already been fleeing the platform. Considering the impact this new fee schedule has had on the users least equipped to deal with a big fee hike, we’re lowering PayPal’s score to 3.5 out of 5 stars. However, we’ll be continuing to monitor how PayPal responds to the uproar its new fees and policies have caused.
If you want the processing freedom that comes with no contract and no monthly fees, but you’re determined not to use PayPal, have a look at either Stripe, which is very developer-friendly. Another good alternative is Square, which doesn’t have quite the wide-ranging eCommerce support that PayPal does but is still a powerful all-in-one option. We also have a piece comparing Square and PayPal if you’re intrigued. And if you want a bit more account stability but still have all the trust and tools that PayPal offers, it’s worth checking out Braintree. Since PayPal owns Braintree, it integrates seamlessly and provides merchants their own unique merchant accounts. All of these processors have similar pricing models.
Read our article on PayPal alternatives to get a concise picture of your other payment processing options.
Thanks for reading! Again, if you’ve used or are using PayPal and have anything to share about your experiences — positive or negative — please let us know. Our comments are always open!
Check Out Our Preferred Credit Card Processors 🏆
*Our preferred processors use fully transparent Interchange-plusWith interchange-plus (cost-plus) pricing, you pay the ‘wholesale’ rates set by the card brands (Visa, Mastercard, etc.), plus a small markup on each transaction. These wholesale fees vary depending on the card, but the average is about 1.8%. By separating out this unavoidable wholesale cost, you can ensure that you are not being ripped off on the markup. This is why we recommend interchange-plus pricing. pricing.
We've done in-depth research on each and confidently recommend them.
Check Out Our Preferred Credit Card Processors 🏆
*Our preferred processors use fully transparent Interchange-plusWith interchange-plus (cost-plus) pricing, you pay the ‘wholesale’ rates set by the card brands (Visa, Mastercard, etc.), plus a small markup on each transaction. These wholesale fees vary depending on the card, but the average is about 1.8%. By separating out this unavoidable wholesale cost, you can ensure that you are not being ripped off on the markup. This is why we recommend interchange-plus pricing. pricing.
We've done in-depth research on each and confidently recommend them.
PayPal Review: Widely-Used International and Domestic Payments App
What is PayPal and how does it work?
PayPal is an easy-to-use payments app with a great mix of features. PayPal makes it easy to send payments to friends and family or pay for goods and services. Once you've set up an account, you can use the app or a web browser to manage your transactions.
You can send, receive, and request money to or from anyone with a PayPal account. You'll need any of the following information:
- PayPal username
- Mobile phone number
- Email address
- PayPal.Me link (your personal payment link)
- Personal QR code
The PayPal.Me link and QR functionality minimize the risk of someone mistyping your information -- they just need to click or scan.
The PayPal app also lets you keep track of your spending, and split bills with your friends. You can easily use this app in both your personal and professional life. It's worth noting that you'll have to pay fees for certain PayPal functions, which we'll cover below.
Below are some of our favorite features of the PayPal app in more detail.
Easy to use
No matter your tech skill level, it shouldn't be challenging to use PayPal. PayPal's neat and organized interface makes it simple to navigate. The app is available for iOS and Android mobile devices, including tablets.
The payment app has a bill-splitting feature called Money Pool. You can collect funds from multiple friends to cover shared expenses or donate to a cause. That means no more stress about splitting the check when you're out.
Widely-used payments app
PayPal is a widely-used and accepted personal finance app. Whether you need to send money to someone domestically or internationally, chances are they have a PayPal account.
Millions of stores offer it as a payment option. You can pay with PayPal at many of your favorite stores like eBay, Apple, GNC, Target, Overstock, and The Home Depot. PayPal even lets you store your store loyalty cards within the app so you can get rewarded for your shopping.
Finally, PayPal makes it easy to fundraise or donate to charity. It won't take any fees or deductions from money donated through its Giving Fund page.
Supports international money transfers
If you need to send money abroad, PayPal is available in 200+ countries and regions. Make sure you're aware of the fees. And if you make regular international money transfers, it's worth shopping around for the best deal.
You can also hold multiple currencies within your PayPal account, make or accept payments in other currencies, convert your PayPal balance to another currency, and transfer your balance in any currency.
PayPal has a reputation as a safe and secure payments app. PayPal doesn't share your financial data when you make payments. Additionally, PayPal's protection policies cover you when buying or selling online. If you don't receive a product you buy with PayPal, you'll get your money back.
Multiple payment methods
There are multiple ways you can make payments through PayPal. You can fund payments via your bank account, debit card, credit card, or PayPal balance. Just be aware that some payment methods, like credit cards, come with fees.
What could be improved
No payments app has achieved perfection. Here are the areas where we believe PayPal has the most room for improvement.
PayPal fees can add up
Like many payments apps, you'll pay fees for certain types of PayPal transactions. PayPal's fees are on target with other apps. And some things, such as sending money domestically to friends and family through your PayPal or bank account can be free. It will cost you to use a credit card to pay someone or send money abroad.
Transfers can take time
When you transfer money from your PayPal account to your bank account, you have two options: A free transfer, which can take one to five business days, or a paid instant transfer. The free transfer is often processed in one business day, but there's no guarantee. If you need the money instantly, you'll need to pay 1%. Instant transfers typically arrive in minutes, but a debit card transfer, where you enter your card information rather than bank account details, may take up to half an hour.
Some users may have sending limits
PayPal does set limits for unverified users. If you have a verified account, which requires you to verify banking or credit card details, you won't have a problem.
If you're not verified, you can only send so much money. This depends on your currency, but you may be limited to $10,000 in one transaction, with a cap of $60,000. You can view your limits in your account. Most people probably don't need to send over $10,000 at once, but it's something to keep in mind.
Frequent phishing target
Since PayPal is a commonly used app, unfortunately, it's often targeted by phishing scams. You may receive fake emails that look like they come from PayPal, and these emails contain phishing links. Be aware of this when opening any email or PayPal link. You want to make sure that you only click on official links.
PayPal Review 2021
PayPal is rated one of our top 10 point-of-sale (POS) systems for 2021. It’s also one of our top 10 credit card processing platforms (though it ranked higher for POS systems). PayPal enables small business owners to process payments through a platform customers trust.
PayPal offers many services for business owners, and the extent of their services can be a little confusing if you’re just getting started with payment processing. In short, PayPal lets you accept payments on a website—an e-commerce store, for example. You can also use PayPal to accept in-person payments, such as for a retail store or a stand in a holiday fair.
On PayPal, merchants can accept all major credit cards, Venmo, pay later options and cryptocurrencies. The fees vary based on the transactions. Here’s how the fees break down:
- Digital payments (e.g., PayPal, Venmo and cryptocurrency): 3.49% plus $0.49 per transaction
- In-person payments with a PayPal QR code: 1.90% plus $0.10 per transaction above $10; 2.4% plus $0.05 per transaction $10 and below
- Online credit and debit card payments: 2.59% plus $0.49 per transaction
- In-person card payments: 2.29% plus $0.09 per transaction
To accept in-person transactions, you’ll need, at the very least, a card reader. PayPal offers many options for hardware through the company Zettle, which it owns. The first card reader you purchase will cost $29 and after that, the cost increases to $79 per reader.
Paypal is extraordinary, it's not difficult to utilize and I appreciate that it's accessible on so many trader's site look at. I generally utilize that alternative when it's free, and it has set aside me cash. I requested something I'd seen on the web and never got it; took a stab at reaching the shipper twice and got no reaction either time. I put a case in on the Paypal site and after they took a stab at reaching the business I got a full discount on the buy. I like that I can have various record installment alternatives and pick assuming I need to utilize a charge or Mastercard for my buy inside the Paypal framework with a keystroke.
I likewise like having the option to return to my Paypal record and print receipts for things on the off chance that I've lost the first receipts. On the other hand, if you're a teenager without any bank cards or credit card, Paypal isn't for you. There are two reasons, first is you're below 18 years old and the last one is you cannot verify your account without bank account.
Paypal is great, it's easy to use and I like that it's available on so many merchant's website check out. I always use that option when it's available, and it has saved me money. I ordered something I'd seen online and never received it; tried contacting the merchant twice and received no response either time. I put a claim in on the Paypal website and after they tried contacting the business I received a full refund on the purchase. I like that I can have multiple account payment options and choose if I want to use a debit or credit card for my purchase within the Paypal system with a keystroke. I also like being able to go back to my Paypal account and print receipts for items if I've misplaced the original receipts.
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They need to know more information on the sellers from other countries. I recently purchased an item from a website unknowing that it was coming from China. Within a few days the seller will acknowledge your purchase and send a tracking number. No word from the seller. I Contacted PayPal within a day. They had a tracking number. When my package was delivered it was a 3"x5" envelope with a two dollar phone case. I had ordered a game system. The seller was just trying to show an item was delivered so paypal would release my payment. Buyers need to know where their products are originating from. After almost a month I was given a full refund from PayPal.
PayPal was there when I needed them, I tried with my friends & Family, & I was able to accomplish what I needed to do with no problems, I even send money to my grandson when he got married, & I was able to buy a washer yesterday with Paypal's help, Thank you, Paypal, so far I started my paypal about a year ago, and I pay under their no interest within 12 months, & I haven't had to pay any interest yet. I always make sure, I keep record of my payments, and pay before the interest is due. I'm very happy. They actually do that for you. They are a little expensive, but they are there when you need them!
I like PayPal because I can have my own personal PayPal.me address that is easy to send to people. I've never really had an issue using PayPal and it's an accepted form of payment on many websites, unlike other $ transfer services. The only downside is that when it comes to transferring $ between friends and family, Venmo and Cash App have become more popular in some circles. Idk why, PayPal is great. They also assist you in disputing a charge if you fell for a fraud or something like that on a website that accepted PayPal.
Used to be a fairly good service years ago and now turned into a complete junk! They don't want to process refund, complicate rules and procedures and you have to spend hours to try to get your $10 out of them! Definitely wouldn't recommend them anymore!
I had a PayPal balance of $140 I tried to send to someone. They took it out of my bank account instead (they have ALWAYS taken out of my PayPal balance first) which made my bank account negative. After waiting and confirming that the person received the money, and the transaction was posted to my bank account, I transferred the remaining $140 out of my PayPal balance to my bank account to even the balance. The next day, PayPal removed the transaction from my bank account, making me negative in the PayPal balance.
I called and asked why, they explained that they couldn’t receive the funds from my bank (even though it posted) and that I needed to pay them the $140. I was fine with that, and the representative agreed that I could make payments at my discretion to resolve the issue. PayPal then tried to authorize another $140 payment from my bank a week later that I did not give them permission to do. I called, the first representative hung up on me. The second representative got very snotty and told me they were going to “get their money either way” and refused to remove the unauthorized transaction. I will never use PayPal again.
Paypal is a fraud. The company relies on being the middle man to COLLECT TAXES even if a transaction is reversed. There was a reversed transaction - which never happened - yet, The fraud company known as Paypal decided to CHARGE ME THE TAXES (THEY NEVER PAID - do you see the level of this fraud? They scam people and governments) and when I called and spoke to several agents telling me that the TOP MANAGER VENISSA (Agent Id **) got on the call and told me this is TAX (which was never paid) and that the time allowed passed. THE TIME ALLOWED MY ACCOUNT WAS SUSPENDED TO provide grounds for the scam to pass the time. Venissa refused to answer any of the question under grounds of "this is collections.
Paypal suspend the account. Then after a year the account was removed from suspension. 2 out of 3 agents tell me the person to remove the negative balance from. My account will be (venessa - agent id ** - who also refused to answer questions) confirmed the fraud behavior and refused to answer questions. Well, I hope the government looks into this issue.
I had account 10 yrs back. Never used it ever. Moved and changed life, city and everything except email...Never updated or even remembered it was there. Fast forward to today trying to shop and using checkout as guest even and was called imposelt and not able to purchase from this site because I didn't want to use Paypal but had an account. Called to speak to the 3 people to close this account so I can shop and they say they cannot because I don't remember my original info from 10 yrs back for an account that was never used. After finally speaking to a manager after one hour of wasted time I got it closed. I wonder if the company that I was trying to shop on knows that they missed my sale and how many others this is happening to????
I have put in for a refund for transactions that was not for me and they told me because I knew the person that it had to be submit by the other person. Don't understand when it's my card that was used. So they took away his rights to use PayPal as a punishment but refused to return my funds. So then I go to state that I will no longer used them and they refuse to give my balance as they made me transfer it into a donation fund for them. Highly upset as I waited 2 weeks for some type of communication and I had to call to get what the lady did tell me.
Avoid PayPal like the plague!!!
I honestly don’t know where to start with this review. By far the worst company I have ever experienced in my life. I will never use them again and strongly advise anyone considering using them to look at the alternatives. Countless money holds that last months, security reviews, big fees, basically any excuse to hold on to your money as long as they can they will. Terrible customer service that feels like they are deliberately trying to annoy you. Finally they awarded a dispute to a buyer who told complete lies about me and my product. I had no idea there was a claim even taking place as I didn’t receive the emails they sent so they automatically refunded the seller over £1300 and allowed him to keep all the stock! They declined my appeal and kept switching me from one customer service representative to the next who just kept repeating the same lines they’ve been trained to over and over like robots. As soon as I found out there was a claim happening I contacted them but they said it was too late…the appeal had been automatically ruled in the buyers favour as I didn’t respond in time. I only found out there was a claim taking place when the £1300+ Was taken out of my account. I’ll never get the money back and a nefarious buyer has benefited from telling lies about me. Avoid this company like the plague..you have been warned!!!
Pathetic!!! Sad that they are a monopoly.
The available options have given me the runaround for the past few days. Avast charged me $43.69 for a subscription I had cancelled months ago. PayPal has basically refused to accept the dispute and closed the case, saying it was "not an unauthorized transaction", when the literal definition of "unauthorized" is to do without consent. I cancelled it months ago, signifying they no longer had consent. And in a final email, PayPal told me to settle it with Avast....basically telling me to disappear. Avast had already emailed me back and said "your money should already be back in your account." So, even THEY realize they screwed up. Yet, PayPal still chooses to not help me. I can't even send a screenshot to PayPal, because that isn't an option in PayPal's "available options." "Contact us" only sends me to the "resolution center", which sends me back to the "closed cases", which sends me back to the "contact us" part. It's all just a runaround. I sent one last email to PayPal, and if it isn't resolved, I'll delete my account, and pray my bank will void the transaction and refund my money. Then THEY can deal with PayPal and/or Avast. I'm over this crap, and looking for better options for online purchases.
SCAM - the robbery! terrible customer service just like robots they repeat the same answer even if you are gives them the new information - the money which you are payed additionally to make the repayment quicker just disappear if you ask them about it they just turning in the circles try to make you a fool. Their policy changes too often like 5 times per year making impossible to track any changes to the policy. NEVER EVER USE THEIR SERVICES IF YOU DONT WANT TO BE SCAMED! Their fraud protection is a joke - you are usually given various excuses that policy do not cover your particular transaction. SCAM! SCAM! and again scam!
I don't think I need to explain why…
I don't think I need to explain why they deserve 1 star. Basically everything you hear about PayPal is true. They hold funds, scam their customers, and have the worst customer service in the world. PayPal will not exist 10 years from now, since they're killing their reputation every day. Eventually a huge law suit will bring PayPal to bankruptcy because of all the fraud they've committed.
Another one star review
Another one star review, since they have parted with EBay they have had to find other ways to make money like holding funds.
I have uploaded tracking for one delivery and a link to show it’s been delivered and I have been told I cannot have the money for two weeks which is £560.
They have become a liability and I have now removed them as a payment method from my site.
One star is too many
One star is too many. How this cretinous company is still operating is beyond my comprehension. I don't even have the vocabulary to accurately describe just how much I despise them. From the fact they withhold payments at their discretion to having to deal with the American agents spewing their scripted nonsensical bile. I long for the day when this company ceases to exist!
Thieves also known as PAYPAL
Thieves , don’t use , £1000 from Jan 4th 2021 , now October 2021 still got my £1000 , all I get is back office crap dealing with it , don’t ask for manager or they cut you off , stay clear at all costs , there’s better than PayPal who don’t steal money , and there is little you can do about it , I asked who governs PayPal in the UK and was told by PayPal employee they can’t give me that information , my advice stay clear at all costs or it will cost you ,being with PayPal 15 years and this is beyond anything I have ever had to deal with , thieves thieves and liars , so forget back office excuses say good by to your money
Blocked account without any reason!
I've been using Paypal for more than 10 years without any refunds or other stuff, just a normal account to buy online.
One day they just decide to block my account WITHOUT ANY REASON! No warning email, nothing! Just blocked the account.
I decided to call the Paypal support phone number but even the employee doest know why I got my account suspended!
No support at all! They just block your account with money WITHOUT ANY EXPLANATION!
Do not use PayPal
Do not use PayPal. I purchased an item online with a company out of the country. They assured me that I would receive item before September 20th. I filed a report requesting that they refund me my money. I also paid extra to receive the item timely. They awaited over a month and then say it was delivered and denied my money. Not too mention the item is a bunch of crap. Do not use PayPal they do not service customers. I am canceling my account with them now. Because they are not what they advertised. Do not I repeat use PayPal.
Cannot close account unless I send my Drivers Lic.
I requested a refund because the computer I bought came without the cord. After weeks, I gave up waiting and requested a refund from the seller. I also filed a dispute with my CC. So, now that I got the refund, PP will not close my account because they don't believe it's me. They want my drivers license and keep putting the wrong phone number on my acct which is a land line and does not text. They rrefuse to close the account and I am furious and just want to get rid of them forever. Do NOT use PAYPAL. They are insane.
Paypal is just so bad
Paypal is just so bad. All I want to do is sell clothes on depop and vinted, and they hold your money and make you fill out things about your business yet half the drop down boxes don't work so then you can't even give the right information so apparently I am a business in Antigua selling computers, at least make it work properly if you're going to ask me all these questions. As well as this why does it mobile check you every time you even log in. its so bad I don't know why any company uses it
Complete junk now!
Used to be a fairly good service years ago and now turned into a complete junk!
They don't want to process refund, complicate rules and procedures and you have to spend hours to try to get your $10 out of them!
Definitely wouldn't recommend them anymore!
PayPal’s bad user journey gave me a bad…
PayPal’s bad user journey gave me a bad credit rating.
Spelling that out, its system wouldn’t allow me to update my new bank account. It generated errors.
I called customer services who said I had to delete old cards from account. So I tried and that too generated errors.
This was a problem because in the meantime it bounced my pay in 3 payment due to it having the old bank account (and using a switch banks service doesn’t work with Paypal!!) but the system didn’t let me know until enough time had past for it to affect my credit rating; all because their system wouldn’t let me change my bank account.
Their system also doesn’t allow people to insert a new bank account number from the SAME bank, either (so if you have a joint account and a single bank account with the same bank, their system rejects the change update).
So I complain and received a response saying my complaint had no merit.
Wow. Your user journey to change a bank account is broken, as was your investigation and response.
How did I manage to get the bank account updated, I had to convince the phone operator to actually fix it; guess what? They could have fixed it all along, but didn’t want to…
How broken is that?
Paypal is looking like a legacy bank. Guess what, I’m not going to trust you with my crypto either.
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