PayPal is a leading digital payment platform that boasts of more than 140 million users who enjoy the company’s services in 193 countries.

In the first quarter of 2014 alone, PayPal acquired 6 million new active customers. PayPal supports payments in 26 currencies. This is what makes the PayPal merchant account a top choice for entrepreneurs who deal online.


PayPal started out as a money transfer service launched in 1998 by a company called Confinity. Confinity was acquired in 2000 by, which eventually decided to get rid of its other internet services and just focus on PayPal. In 2001, was renamed Paypal.

Paypal became a wholly owned subsidiary of eBay in 2002, helping it expand rapidly. It became the payment system used by majority of eBay sellers, and in 2009, the total value of Paypal transactions amounted to over £40 billion. In September 2014, Ebay announced that it would spin off PayPal into a separate business, with the split expected to take place in the second half of 2015.

While its main headquarters are in California, PayPal has major offices across the US, India, Ireland, Germany, Israel and Luxembourg.

What’s on Offer

1. Standard

This type of account lets you accept debit and credit cards on your website by adding the PayPal button to your checkout page. It also provides you with mobile on-the-go technology which allows buyers to purchase items off your site on their mobile phones or tablets. The Standard account is also the account you’ll need to help you get set up as an eBay seller, making the payment process a lot easier for you and your buyers. You can also get a Chip and PIN reader for £99 with this product.

2. Pro

With a Pro account, you can design the checkout process so that customers can complete the process without having to leave your website and go to the PayPal payments page. This means customers can pay for their purchases in just three clicks. This product is compatible with various online shopping platforms, such as Magento, OSCommerce 3DCart, ASPDotNetStorefront, Miva Merchant and Pinnacle Cart. As with the Standard account, you also have the option of getting a Chip and PIN reader for an extra £99.

3. PayPal Here

PayPal Here allows you to accept and process payments wherever you are. All you need is a PayPal Chip and PIN reader (available for £99) and your mobile or iPad. This is useful for merchants who are always on the go, such as plumbers, cab drivers and market sellers.

Pricing Structure

PayPal take pride in its open pricing policy. There are no hidden costs and fees depend on the kind of account you have as well as the value of transactions you make.

Online Payment Processing

AccountMonthly FeeUp to œ1,500œ1,500-œ6,000œ6,000-œ15,000œ15,000-œ55,000œ55,000 and above
Standard03.4% + 20p2.9% + 20p2.4% + 20p1.9% + 20p1.4% + 20p
Pro203.4% + 20p2.9% + 20p2.4% + 20p1.9% + 20p1.4% + 20p
Nonprofit discounted rate*01.4% + 20p1.4% + 20p1.4% + 20p1.4% + 20p1.4% + 20p
Micropayments (average transaction under œ5)**0%5 + 5p%5 + 5p%5 + 5p%5 + 5p%5 + 5p

* Nonprofit companies need to apply and be approved for discounted rates
** Micropayments within the UK (upon application and approval) – Average purchase price of less than £5.

Face to Face Payments

 Chip and PIN ReaderChip & PIN cards and PayPal Check Inmagnetic strip & manual key entry
PayPal Here990.02753.4% + 20p

Additional charges apply to international payments, as outlined below.

International Payments – additional charges

Recipient's CountryCross Border Fee
Northern Europe*0.004
Europe I/ US/ Canada**0.005
Europe II***0.01
Rest of World0.015

* Aland Islands, Denmark, Faroe Islands, Finland, Greenland, Iceland, Norway, Sweden.

** Austria, Belgium, Canada, Channel Islands, Cyprus, Estonia, France (including French Guiana, Guadeloupe, Martinique, Reunion and Mayotte) , Germany , Gibraltar, Greece, Ireland, Isle of Man, Italy, Luxembourg, Malta, Monaco, Netherlands, Portugal, Montenegro, San Marino, Slovakia, Slovenia, Spain, United Kingdom, United States, Vatican City State.

*** Andorra, Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Liechtenstein, Lithuania, Macedonia, Moldova, Poland, Romania, Russian Federation, Serbia, Switzerland, Turkey, Ukraine.

Note:Cross Border Euro or Swedish Krona payments made between Accounts registered in the European Union or EEA will be treated as Domestic Commercial Transaction payments for the purpose of applying Fees.

Currency Conversion Fee

In addition to the international payments additional % charge, there is also a fixed fee applied depending on currency according to the table below.

Argentine Peso:2.00 ARS
Australian Dollar:$0.30 AUD
Brazilian Real:R$0.60 BRL
Canadian Dollar:$0.30 CAD
Czech Koruna:10.00 CZK
Danish Kroner:2.60 DKK
Euro:0.35 EUR
Hong Kong Dollar:$2.35 HKD
Hungarian Forint:90.00 HUF
Israeli New Shekel:1.20 ILS
Japanese Yen:40.00 JPY
Malaysian Ringgit:2.00 MYR
Mexican Peso:4.00 MXN
New Zealand Dollar:$0.45 NZD
Norwegian Krone:2.80 NOK
Philippine Peso:15.00 PHP
Polish Zloty:1.35 PLN
Russian Ruble: ^^10.00 RUB ^^
Singapore Dollar:$0.50 SGD
Swedish Krona:3.25 SEK
Swiss Franc:0.55 CHF
New Taiwan Dollar:$10.00 TWD
Thai Baht:11.00 THB
Turkish Lira:0.45 TRY
U.K. Pounds Sterling:œ0.20 GBP
U.S. Dollar:$0.30 USD

Summary of PayPal’s Merchant Services

It’s fairly easy to set up a PayPal account thanks to it’s straightforward sign-up process. Payments made to you will show up in your PayPal account within minutes, and you can choose to transfer these immediately in to your bank account. A merchant account, in the traditional sense of the term, is not needed.

PayPal charges a fixed percentage and a transaction fee on each sale, but there are no setup fees or charges for downgrades, statements, withdrawals or cancellation.

There is free phone support from UK landlines, making it easy to get help in case you encounter any problems.

Disclaimer: All prices quoted in this article are true at the time of publication.


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