The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.
Accepting credit card payments a fast way to grow your small business, but the right setup depends on how you sell. This guide walks you through how credit card processing works with PayPal and helps you find the best acceptance method for your business, whether you sell in person, online, by phone, or on a recurring schedule.
Key takeaways
Before you can start accepting credit card payments, there are a few pieces you'll need in place. Here's what every business needs, no matter how you plan to sell:
PayPal packages your merchant account, payment gateway, and PCI compliance into a single account, so you don't need to piece together multiple vendors to get started.
Setting up online payment processing means connecting a merchant account to a payment gateway or checkout so you can securely capture and process card details, then routing the funds into your business bank account. Most providers, including PayPal, package these pieces together, though the exact steps vary slightly depending on who you use.
The best way to accept credit cards depends on how and where you sell. It comes down to how you take payments (in person, online, or by phone), how quickly you need funds to reach your account, and your typical transaction volume. Here's a quick breakdown of which PayPal solution tends to be best suited to each type of business:
Use case | Best method | PayPal solution |
|---|---|---|
Retail or storefront | Card reader or POS terminal | |
E-commerce site or online store | Hosted checkout or payment gateway | |
Sending invoices or phone orders | Payment link or virtual terminal | |
Subscriptions or memberships | Recurring billing |
If you run a storefront, market stall, or mobile business, a PayPal Card Reader or full POS System tends to be best suited, letting you take chip, tap, and swipe payments on the spot.
If you sell through an e-commerce site or offer services online, a hosted checkout is typically the best suited method. PayPal Checkout, covered in Step 2 above, lets customers pay with a card without leaving your site.
For phone orders, deposits, or memberships, a payment link or virtual terminal is generally best suited. PayPal Invoicing lets you send a payment link by email or text, and PayPal Recurring Payments automates billing for subscriptions or memberships.
Using PayPal for processing credit card payments lets you accept payments in real time instead of waiting on cash, checks, or manual invoices, which helps build customer trust. Benefits include:
set by the card network, an assessment fee, and a markup charged by your payment processor. With PayPal, your exact rate depends on the transaction type, including whether the card is present, entered online, or keyed in manually.
For exact rates, check PayPal's business fees before you start processing.
Customers depend on you to keep their financial information safe when you're taking card payments. Encrypted website payments through PayPal help you keep transactions secure by processing all PayPal transactions on web pages that utilize SSL encryption. Encrypted payments help you reduce the likelihood of identity theft while helping you meet your PCI compliance requirements. PCI DSS sets the security standards every business that accepts cards must follow, and PayPal's infrastructure is built to help you meet them.
Wherever you sell, in person, online, by phone, or on a recurring schedule, PayPal gives you one account to accept it all. Beyond taking payments, you can use the same account to send an invoice to a client, tap into financial services like the PayPal Business Debit Card to spend your balance, and strengthen your risk management as your business grows.
Ready to get started? Explore PayPal's payment acceptance solutions to find the setup that fits your business.