PayPal: The Basics of Collecting Payments for E-Commerce Sales

570x300 EW PayPal The Basics of Collecting Payments for E-Commerce Sales_FinalOne of the most popular online payment processors today, PayPal provides a simple and hassle-free method for online retailers to accept payments from customers globally, without having to pay any set-up fees or enter into contract agreements.

PayPal Basics: What Type of Services Can You Expect For Your Business

At its core, PayPal opens up the transactional lines of communication between two designated parties. As an e-commerce seller, you simply need to set up an account to be granted instant access to a range of services that include the ability to make payments online, transfer money to various bank accounts and, most importantly, accept payments from customers and clients. Best of all, not only does PayPal allow for funds to be transferred between two accounts, but it also does so through a secure online connection!

Benefits of Secure Online Payments for Your Business

Unlike a bank credit card merchant account, which can include set-up fees, a credit approval process and other hidden charges, opening a PayPal account for your online retail business is easy and most importantly, does not include any set-up fees! Moreover, PayPal merchant account fees are applied at the transaction level, meaning you are only charged fees when you have a sale and need to collect funds. While many credit card merchant accounts require a long-term agreement and can take days to establish your account, with PayPal you can set up an account in minutes with just a few clicks.

The PayPal program is straightforward and easy to implement on your website. Most online retailers are able to install the short HTML code on their website easily and can begin accepting payments in as little as 15 minutes. Below is an example of a sample PayPal code that would need to be placed on your website:


<form action=”” method=”post” target=”_top”>
<input type=”hidden” name=”cmd” value=”_s-xclick”><br />
<input type=”hidden” name=”hosted_button_id” value=”XXXXXXXXXXXXX“><br />
<input type=”image” src=”
border=”0″ name=”submit” alt=”PayPal – The safer, easier way to pay online!”><br />
<img alt=”” border=”0″ src=”” width=”1″
height=”1″><br />

The highlighted value above would need to be replaced with your account ID. This code will produce the image below, which will link to your unique landing page on PayPal. Once installed, you’re officially ready to begin accepting payments into your PayPal account!


Various Types Of Accounts: Which Ones Makes Sense For Your Company? 

PayPal offers business owners three account models to choose from – Standard, Advanced and Pro. Read on to learn which account type makes the most sense for your business.

Standard: The standard business option is free to set-up. With this plan, you can:

  • Accept credit cards/PayPal payments (Customers are redirected to to send the funds, and then are redirected back to your website after funds are collected.)
  • Send invoices
  • Use a free card swiper on your mobile phone
  • Accept payments in 24 currencies from 190 countries 

Advanced: The advanced model has a $5 monthly fee and offers all the features of the standard option as well as:

  • The option to allow customers to pay directly on your business website
  • Bill Me Later payment options

Pro: At a $30/month fee, the Pro account offers all the features of the Standard and Advanced account plans, along with:

  • A virtual terminal for phone, email, fax payments
  • Options to design and host your own checkout pages 

Other Fees to Consider When Setting Up Your PayPal Account 

While the type of account you choose for your business generally depends on the volume of sales you have, it is important to note that there are also transactional fees to consider. As a general rule, businesses billing out less than $3,000 per month will be charged 2.9% + $.30 on each transaction. This rate can drop to 2.2% if you have a lot of sales. Also, international sales are charged at 3.9%, plus a fixed fee which is based on the currency received.

Given the benefits of the different plans, it is easy to see why so many online retailers use PayPal to process payments for their businesses. Are you ready to open your PayPal account? Click here to get started now!