By clicking "Accept" you agree to the use of cookies.
Accept Reject

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer. More Information.

Manage Consent Preferences

Updating Preferences

Please wait whilst we update your preferences...

Qualify To Reduce Your Payment
Processing
Fees?

You could save your business £1000s

Do you currently accept card payments?
Complete our short form, it only takes a minute!
Unfortunately you didn't select your third party marketing preferences.
Please confirm if you would be happy to be contacted by our Trusted Third Parties by SMS, Email & Telephone regarding Third Party Services.
Trusted Third Party Service Providers
%#GeneratedText##ThirdPartyUl#%
Our Partners
  • Barclays Bank PLC
  • CommercialExperts.com
  • FirmEU BV
  • Fiserv (Europe) Limited
  • Handepay Limited
  • ResQ Limited
  • SumUp Payments Limited
  • Take Payments Limited
  • Teya Services Limited
  • The Redwood Group and Associates Limited
  • Tide Platform Limited
  • WorldPay (UK) Limited
  • Yotta Digital Ltd
Our Products
  • Business Accountancy
  • Business Epos Systems
  • Business Telephone Systems
  • Commercial Waste Collection
  • Digital Marketing
  • Fleet Tracking
  • Invoice Finance
  • Merchant Accounts
  • Website Design

How a PayPal Merchant Account Could Help Your Business

Many businesses use a PayPal merchant account to process payments; here's how one could work for you.

If you are just starting or beginning to expand your business, you're probably thinking about how to best manage your business's sales and who or what you're going to use to accept payments from your customers. 

 

PayPal has grown in recent years and has now become a popular option for small online businesses. But how do the services that PayPal offers differ from those offered by other, more traditional merchant accounts? Here's all you need to know.

What is a PayPal Merchant Account?

PayPal merchant accounts are a type of business account that allows businesses to accept payments without having a traditional merchant account. Also called Paypal Business Accounts,  they accept debit and credit card payments, online checks, and direct payments from people with a PayPal account.

 

Some businesses prefer them as they offer more functionality than a traditional merchant; they can track inventory, payments, profits, and invoicing as well as combine multiple business accounts into a single digital wallet. 

How do PayPal Merchant Accounts Work?

PayPal Merchant Accounts work broadly the same as normal merchant accounts, in that payments made to your business go through them before they get to you. They do, however, work slightly differently.

 

Where a merchant account acts as the middleman between your customer and your bank account; depositing funds directly into your chosen bank account, a PayPal Merchant Account takes payment from your customer and processes it themselves, before depositing it in your PayPal Merchant Account. The funds therefore appear in your company's PayPal account, before they can be transferred to your bank account. 

Benefits of Having a PayPal Merchant Account

Having a PayPal Merchant Account allows your business to evolve in the way it takes and manages payments. Customers can pay using only their email address or by following their own personalised link, making taking and accessing payments easier than is typically possible with a traditional merchant account.

 

PayPal is often a good option for businesses that are just starting out as there are no monthly fees and the account is free to set up. As you'll see below, PayPal charges a fee for each transaction they process, which is how it makes its money. So if your business has a lower transaction volume you might save money.

 

PayPal Merchant Accounts also help you build strong relationships with your customers; as a globally trusted and secure payment method, your customers are more likely to buy if they see you take PayPal payments, as they know they're protected. This can also be a bonus if your business is just starting out. 

How to get a PayPal Merchant Account

Securing a PayPal Merchant Account is a fairly simple process. As part of your application, you need to provide your basic information, including your business name, address, and tax ID number. 

 

You'll also need to provide an email address, a business phone number, your legal business name, and your bank account information so you can accept payments. Once you have provided the required information, you can create a PayPal business account in a matter of minutes and start accepting payments for your goods and services. 

FAQs: Your Questions Answered

PayPal merchant accounts are a type of business account that allows businesses to accept payments without having a traditional merchant account. Also called Paypal Business Accounts, they accept debit and credit card payments, online checks, and direct payments from people with a PayPal account.

PayPal Merchant Accounts work broadly the same as normal merchant accounts, in that payments made to your business go through them before they get to you. Unlike a normal merchant account, a PayPal Merchant Account takes payment from your customer and processes it themselves, before depositing it in your PayPal Merchant Account.

PayPal business accounts are free to open, but PayPal charges a fee for each transaction processed through its merchant services. PayPal seller fees in the UK vary based on the type of transaction, and usually range from 1.2% to 2.9% + a fixed fee.

Qualify To Reduce Your Payment
Processing
Fees?

You could save your business £1000s

Do you currently accept card payments?
Complete our short form, it only takes a minute!
Unfortunately you didn't select your third party marketing preferences.
Please confirm if you would be happy to be contacted by our Trusted Third Parties by SMS, Email & Telephone regarding Third Party Services.
Trusted Third Party Service Providers
%#GeneratedText##ThirdPartyUl#%
Our Partners
  • Barclays Bank PLC
  • CommercialExperts.com
  • FirmEU BV
  • Fiserv (Europe) Limited
  • Handepay Limited
  • ResQ Limited
  • SumUp Payments Limited
  • Take Payments Limited
  • Teya Services Limited
  • The Redwood Group and Associates Limited
  • Tide Platform Limited
  • WorldPay (UK) Limited
  • Yotta Digital Ltd
Our Products
  • Business Accountancy
  • Business Epos Systems
  • Business Telephone Systems
  • Commercial Waste Collection
  • Digital Marketing
  • Fleet Tracking
  • Invoice Finance
  • Merchant Accounts
  • Website Design
What's Trending?
Read more about how to save your business money
The Best Card Machines For Small Businesses 2024

If your business still operates a cash-only policy when it takes payments, or you're looking to upgrade the cash machines you've already got, choosing the right card reader for your business can be a trickier job than it sounds.While card machines aren't the most glamorous thing to spend your money on, they are an essential part of your business. Recent years have seen them grow in popularity and now many people use their cards to pay for the vast majority of their goods and services. You, then, need a reliable, useable, and cost-effective card machine to ensure your business is not only able to take payments by card but also take them quickly and easily with a device you understand.  The Best Card Machines for Small BusinessesDifferent machines offer your business different benefits, and knowing which is the best choice isn't always clear. That's why we've done most of the research for you, and compiled this list of some of the best card machines on the UK market. We've compared them, so you don't have to. As you're probably aware, card machines come in a variety of shapes and sizes. Some are portable and pocket-sized, while others are large and fixed to your business's countertop. We've covered all bases in this list, so you'll find a mix of different types of card machines. 

How Much Do Business Bank Accounts Cost?

What is a Business Bank Account?Business bank accounts enable you to separate your personal and business expenses; creating a convenient way to organise your tax and bookkeeping. This makes paying taxes easier and means your files are clear and easy to understand. There are several advantages to having a business bank account. For a deeper dive into what a business account can offer you and your business, read on. In this article, we outline the costs associated with opening and maintaining a business bank account and explain what you need to get started. How Much Does A Business Account Cost?Each bank has its own set of criteria for opening a business bank account. It's important to evaluate and compare the available options to find the best business checking account that suits the needs of your business. If you already have a personal account with a particular bank, there might be special offers or benefits available to you if you choose to open a business bank account with the same one. Some banks require an initial deposit or a minimum balance, while others impose varying fees for different types of transactions, such as monthly service fees, excess transaction fees, or cash handling fees.

Direct Debit Explained

A direct debit payment is a payment taken automatically from a customer's bank account periodically. It's often offered as a payment method by businesses that provide subscription services or other services that require an ongoing commitment from a customer. The main benefit of direct debit payments, for businesses and consumers, is their simplicity. Neither your business nor the customer has to worry about remembering the payment, so payments aren't missed and the relationship between you and your customers is more easily managed. How to Take Direct Debit PaymentsThe way direct debits work is fairly simple. Your customer's payment is taken from their account automatically, usually on a predetermined date, and your business then continues to provide the customer with your service. You need an agreement from your customers to take payments automatically, so make sure it's clear what they are opting in for. You don't want your customers to be confused about what it is they've committed to.  You also need to be eligible to take direct debit payments, which means you need to get a Service User Number (SUN) - a six-digit number businesses use to get paid via direct debit. You can get a SUN directly from your bank, provided you meet its criteria.  Once your bank and your customers have given you the green light to take payments automatically, you just need to set up the frequency and size of your payment. The most important thing to remember about this part is that your customers must be given 10 days' notice before each payment is taken. The notice needs to detail when the payment will be taken and how much it will be. Benefits of Taking Direct Debit PaymentsAs mentioned above, the most obvious benefit of accepting direct debit payments is the simplicity it brings to the hassle of keeping on top of recurring payments. That's not where the benefits of direct debit payments though. Other benefits include having greater predictability, greater retention, and better relationships with your customers. Having a better idea of exactly how much revenue you've got coming in from your customers and knowing exactly when you'll be receiving it can make your business's general finances more predictable and therefore more manageable. You can also use this information to inform future decisions about your business growth.  Having customers committed to your business on an ongoing basis also means they're more likely to stick around as they already know they like what you provide, making the job of your CRM that much easier.  With customers already engaged heavily with your business and your brand, they're right where you want them to be to develop your relationship with them. You can use their pre-existing interest to market more of your services, offer special discounts or offers, or reward their loyalty with a giveaway. These things will help keep their engagement with your brand nice and high.