Business Bank Accounts – Part Three

Creator Financial Toolkit: PayPal

PayPal was created in 1998 but has only been known as PayPal since 2000. PayPal has been established the longest of the financial institutions I will mention in this post.

At its basic level, Paypal makes it possible to send and receive money via email.

So it goes without saying that to use PayPal, you require an email address.

The standard Gmail address is more than adequate to use with Paypal; however, creators should really have a custom domain. For example,

This, in turn, will allow you to create a branded email address like

growing your audience’s confidence in your brand.

Note: The importance of a domain is discussed in my post, Domains and Links.

How Paypal works


  1. Paypal is like a virtual online bank account (Paypal is not legally a Bank).
  2. Your email address is your username-id.
  3. Within Paypal, you connect a funding source your actual bank or credit/debit card to your Paypal account.
  4. Fund your PayPal account with one of your funding sources.
  5. Sent funds to another PayPal user’s or online retailer’s PayPal registered email address.


  1. PayPal is like a virtual online bank account (PayPal is not legally a Bank).
  2. Your email address is your username-id.
  3. Within Paypal, you connect your actual bank account to your Paypal account.
  4. Funds are sent to your PayPal account via your registered PayPal email address by another PayPal user. Which can be a friend, client, or customer.
  5. The funds are made available within your PayPal account.
  6. Use funds at any marketplace, platform, or online store that supports Paypal.
  7. Withdraw funds into your bank account.

Being a Sender or Receiver is the basics of PayPal’s two-sided payment platform. For creators, PayPal’s two-sided payment platform is most beneficial. Like Payoneer, PayPal’s platform allows creators to be paid by platforms and marketplaces and invoice clients for freelance work done. Unlike Payoneer, PayPal offers the ability to accept payments on your website.

With 300 million users worldwide. PayPal gives creators access to a global payment market.


PayPal is available in 200 countries and supports 25 currencies. It is possible to hold 25 currencies within PayPal. However like other services the available currencies available to you will depend on your country of residence laws and regulations.

PayPal allows you can hold multiple currencies. However PayPal does not provide bank routing numbers. The only way to pay into your PayPal account is using your PayPal user-id.  Any currency paid into your PayPal account other than the default currency will be converted into the default currency.  However if you have open a currency account in the incoming currency no conversion is applied.

PayPal Fees

PayPal Internal Payment

Making payments to another PayPal user is pretty straightforward.  All you need is the user’s PayPal email address.  No fees will be charged if the user receiving payment has a currency account opened in the currency being sent.  Otherwise a currency conversion fee will be charged to the transaction.

PayPal payments can offer immense convenience; however, this convenience comes at a cost. PayPal has a few fees that can be applied to one transaction.

Selling items on a website can have up to three different types of fees attached before the funds are transferred to your bank account.

  1. The initial e-commerce transaction fees, 1.2% to 2.9% plus a fixed fee. For the U.K., the fixed rate would be 0.30 GBP, 0.30 USD, and so on, depending on your country of residence.
  2. PayPal charges cross-border fees for transactions where the buyer and seller are in two different countries. Fees of 0.5% to 2% are applied, and in some cases, depending on the currency received, a fixed fee is applied.
  3. Currency conversion fees This is where an item is sold in one currency but paid for in a different currency. For example, an item is sold in British Pounds (£). but paid for in US Dollars ($). A currency conversion would be needed to convert US Dollars into British Pounds.

Withdrawing Money

PayPal will only allow free withdrawals to a local bank account in your country’s local currency. For me in the United Kingdom, that means I can only withdraw GBP (£) from my bank account.

Withdrawals in a different currency to an account in a different country may be possible; however, cross-border charges may be applied.

Another option other than withdrawing is to buy products or pay invoices with your PayPal balance. This can save you money if you have multiple currencies held within PayPal. There will be no need to convert currencies into your local currency if you are trading internationally. This will save you money on currency conversion charges.

PayPal Business Debit Mastercard

Another way to withdraw money from your PayPal account is with the PayPal Business Debit Mastercard. The card operates like a standard debit card, however it gives you access to your PayPal balance. If a bill needs to be paid and the business or individual does not have a PayPal account, the business or individual can be paid with the PayPal debit card. The card can be used anywhere, offline or online, where Mastercard is accepted.

Financing Services: (For you or your customers)

PayPal can also operate offline. Paypal has products that benefit online stores  If you qualify, PayPal can offer credit facilities to a creator’s customers.

  1. Pay in 3

This is a credit facility that allows payment for a product or service to be split into three payments over three months, interest-free.

  1. PayPal Credit

This is a credit facility that acts like a credit card without the card. If your customer has applied for PayPal credit. They will offer the option to pay with PayPal credit at checkout.

PayPal Credit offers a 4-month interest-free period when the checkout total is more than £100 or equivalent currency. If the balance has not been cleared after 4 months, then interest will be charged on the remaining balance.

These credit facilities can help if a creator creates a product or service with a high price tag.

PayPal Card Reader

If you are in a position where you need to sell person-to-person, PayPal offers a point-of-sale (POS) service. With the help of a card reader, in person transactions can be processed. Whether you are selling at a retail store, a trade market, or selling merchandise and artwork, PayPal Here allows you to process:

  1. Mastercard
  2. Visa
  3. American Express
  4. Apple Pay
  5. Google Pay
  6. Samsung Pay

These are just some of the payment methods that can be processed by PayPal card reader. PayPal’s Zettle card reader supports contactless and chip-and-pin payments.

PayPal Card Reader: Pricing and Fees

Depending on requirements, the card reader’s model pricing ranges from £30 to £600, or the currency equivalent. With transactions charged at 1.75% of the transaction amount.


PayPal is an all-round solution for the creator-entrepreneur. While its fees may be higher than other solutions, the convenience that PayPal brings is hard to match.


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