If you have a PayPal account and find yourself struggling with their plans, fees, TOS, different account types etc then the following points are must read for you. Do check out the money-saving tip in bold.

  1. There are two types of accounts in PayPal. Personal and Business.PayPal Tips
  2. A single person can only have two accounts with PayPal. One Personal Account and/or a Business Account. Each account should have a unique email address, bank account and credit card associated with it.
  3. Opening a PayPal account and sending money from a PayPal account is completely free of charge for all account types.
  4. Receiving funds from a PayPal account:
    1. To your personal PayPal account is free.
    2. To your business PayPal account involves fees.
  5. You can also receive funds from a credit/debit card.
  6. With personal accounts you can only accept five credit/debit cards payments while in case of business accounts there is no such limit.
  7. Receiving funds from a credit/debit card to your personal PayPal account involves higher fee than business account. Fee varies by country. Check out fee structure for US based PayPal account holders and fee structure for India based PayPal account holders.
  8. Business account holders can also accept payment through credit cards without asking the payee to register with PayPal.
  9. If you have a business account, you cannot accept business funds to your personal accounts. It means you can’t ask your website visitors to put money in your personal account instead of premier/business account. However you can accept funds from your affiliate/advertising network in your personal accounts.
  10. Money Saving Tip: If you are a business account holder and have a good standing with PayPal you can apply for merchant rates. Merchant rates attracts lower fee than normal premier/business accounts rates. To qualify for merchant rates you should have received more than $3,000.00 USD in PayPal payments in the previous calendar month.Merchant Rates India
  11. PayPal has invested a lot on the customer service front. While generic questions can be asked @AskPayPal twitter handle, for account related questions you have the facility to call them or send an email via the contact form.
  12. Don’t let your money stagnate in PayPal account. Invest in PayPal Money market fund and see your money grow.
  13. Something for your protection. Never click a PayPal link in your email. There are lots of phishers around. It is always advisable to directly type-in the URL.
  14. While opening a PayPal account, use a Gmail address. Gmail has put in place some special authentication for PayPal wherein you will never find a PayPal phishing messages in your Gmail account.
  15. For simple needs, PayPal also provides an inventory management feature under merchant tools. Now no need to go for those big online shopping carts.
  16. If you are a merchant and want to find and test out how that PayPal button would behave in real-time. Check out PayPal Sandbox
  17. If you are a PayPal account holder from outside US be prepared to shell out large sum of money as PayPal fee. Even while withdrawing money(in your currency) to your account, PayPal has its own exchange rate which is always lower than the current exchange rate. I wish PayPal could look into this uneven fee structure. For instance: If you are from India and assume you receive $100 in your account and current normal exchange rate is $1 = Rs 50. The actual amount what you will get in your PayPal account would be $95.8 (3.9% of $100 + $0.3) and if you chose to withdraw to your bank account in India, the amount you will receive would be around Rs 4358 (PayPal exchange rate is Rs1.5 lower than normal exchange rate). All in all a loss of Rs 642 for an amount of $100!
  18. Make sure you read the T & C document of PayPal carefully. PayPal is quick to limit an account for even a slight aberration. For instance, you are not allowed to log-in to PayPal from a country which is not included on Paypal’s permitted countries list.
  19. Even if you’re logging in from a permitted country but if that country is not your base country (where you regularly do business from), it’s good to let your PayPal account rep know about your travel plans. I have seen accounts getting limited in such cases too!

Some readers have inquired about an alternate payment gateway to PayPal.

If you are in India, just go with InstaMojo. The ease of use, the innovative solutions and their affordable pricing makes them a no-brainer for anyone doing business online in India. Having done plenty of transactions with them over the last year, I have only good words to say about them.
If InstaMojo ever wants to take investments from small businesses, I think I would be the first-one in queue to invest in them. Yes, this is the kind of confidence I have gained with them. All I wish that they keep their helpful support and innovativeness intact with scale.

For folks in US and other parts of the globe I can whole-heartedly recommend GumRoad. This payment gateway cum eCommerce solution is available for users/merchants across the globe and they are one of the cheapest in the market (in terms of pricing not quality :)). They have a 14 day free trial as well. GumRoad not just acts as a payment gateway for you but as a full fledged eCommerce solution. You can sell your e-courses, books and others and they will take care of the hosting and delivery. This is included in their pricing.

Check this list of must have resources we use across our network of business websites.

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