How to Set Up a PayPal Account in 7 Steps (with Photos)

PayPal is an American fintech company that operates an online payment system. It provides users an alternative to traditional payment systems like hard cash and avoids sharing your credit or debit card information to access online marketplaces. For example, PayPal offers a fast and efficient way to invest in cryptocurrencies like Bitcoin.

PayPal can trace its history to the founding of Confinity in 1998 by Peter Thiel, Max Levhin, and Luke Noshek. Confinity launched its online payments platform in 1999, then merged with X.com, a company founded by Elon Musk and others, in March 2000. The company officially became PayPal in June 2001.

One factor that fueled the growth of PayPal into the financial services behemoth that it is today is its acquisition by eBay in 2002 for $1.5 billion. Under eBay, PayPal grew its customer base, partnered with numerous financial services providers like MasterCard, and acquired more companies that boosted and secured its platform.

Today, PayPal is an independent company with over 400 million customers. Its global acceptance explains why more people are interested in opening PayPal accounts.

Below is a step-by-step guide on how to set up a PayPal account. Let’s get started with the easy steps!

Step 1: Open Your Browser 

Open your browser on your desktop, laptop, smartphone, or tablet. It could be Google Chrome, Safari, or any other browser. In the search bar, type PayPal and click the first result at the top of the result page. 

Alternatively, you can type in the web address https://www.paypal.com and press enter or click here.

Smartphone and tablet users who prefer applications can download the PayPal app from the Google Play Store or the Apple App Store and use it to set up a PayPal account.

Step 2: Click Sign Up

When you open the PayPal homepage, you will see two options on the top right-hand side: Log In and Sign Up.

Click Sign Up to set up a PayPal account.

Step 3: Select the Type of Account

PayPal offers two types of accounts: personal accounts and business accounts.

Personal accounts allow individuals to make online purchases worldwide without sharing their credit or debit card information with businesses. Business accounts are for business owners who want to accept PayPal as a mode of payment either during in-store purchases or online. A business account requires your personal information and details about your business.

Select the account that suits your needs and click Continue.

Note: You can convert a personal account to a business account later through the settings and convert a business account to a personal account by contacting PayPal Customer Service.

Step 4: Provide Your Phone Number

If you open a personal account, PayPal will prompt you to enter your phone number in a dialogue box.

PayPal will use the number to send a confirmation code to your phone to confirm that you are the legitimate owner of the number. Ensure you can access your phone, as you cannot set up a PayPal account without completing this step.

When opening a business account, PayPal asks for the email address you intend to use to create an account.

Step 5: Enter the Confirmation Code

You must input the confirmation code sent to your phone number for a personal account setup. When setting up a business account, this step does not apply.

The code is only valid for ten minutes, after which you must request PayPal to resend a different code.

Step 6: Provide Personal or Business Details

Once you confirm your phone number, you will be asked to provide personal details as a prerequisite for your account setup. That includes your full legal name (to guarantee a smooth transfer of funds between different accounts), an email address, and a password. Provide an unlinked email, as you cannot set up a PayPal account using a linked one.

Your password must have eight or more characters and include at least two of three types of unique characters, including letters, numbers, or symbols, to increase account security against hacking. When done, click Next.

For a business account, you should provide the business address, among other requested information.

Step 7: Finalize Account Set Up

The final steps involve providing more personal information to verify the validity of your account creation request. It includes stating your nationality, listing your date of birth, and providing a form of government identification like a National ID and its number, address, city, and postal code.

Lastly, you must agree to the PayPal User Agreement and Privacy Statement before accessing your account. Click Agree and Create Account to finish the account setup.

How to Complete a PayPal Account Set-Up: Step-by-Step Guide

Before you can begin transacting using your newly created PayPal account, you must include a payment method. That involves adding a credit or debit card or linking the PayPal account to your bank account.

Follow these steps to get started.

Step 1: Log in to Your Account

Once you create your PayPal account, you should remain logged in to complete the account setup. However, if you log out, you can log back in later to finish the process.

Step 2: Click Wallet

Click the Wallet tab at the top of your home page.

Step 3: Link to a Payment Method

On the Wallet page, click Link a card or bank.

Step 4: Fill in Your Card Details

When you click Link card or bank, a dialogue box opens that requests you fill in your debit or credit card details to facilitate online purchases.

The requested information includes the debit or credit card number, expiration date, and security code. You must also indicate the type of card you use, with the options available being Visa, MasterCard, American Express, UnionPay, or Discover.

Lastly, include your billing address, then tap Link Card.

To see exactly how these steps work check out the video below.

The Differences Between Personal and Business PayPal Accounts

Personal and business accounts facilitate sending and receiving money. However, several differences distinguish the two types of accounts.

Personal PayPal Account

• A personal account allows you to buy products on online marketplaces. You can also use it to pay for goods and services in brick-and-mortar stores that accept PayPal. 
• It enables you to send and receive money from family and friends.
• It allows you to send money as a gift.
• A personal account is also ideal for individual freelance professionals to receive client payments.
• Personal accounts do not incur payment fees when conducting domestic transactions unless the transaction involves a currency conversion.

Business PayPal Account

• Business accounts operate under the name of a business and not the business operator’s name.
• It charges a fee for all transactions depending on the transaction size and the mode of payment.
• Business accounts allow up to 200 employees limited access to the account.
• It has access to more PayPal services than a personal account. For example, PayPal Checkout.
• It is more difficult to downgrade from a business account to a personal account than an upgrade from a personal to a business account.
• Business accounts allow sending and receiving invoices and creating subscription services.

How to Upgrade Your Personal Account to a Business Account

PayPal allows personal account owners to upgrade their accounts to business accounts. It is convenient for those who do not want multiple accounts once their business evolves from individual freelance work to a multi-person workspace.

Upgrading is very straightforward; just follow the steps below.

Step 1: Log in

Log in to your PayPal account using your email address or phone number and a password.

Step 2: Go to Settings

On your account home page, you should see a gear icon on the top right corner of your screen that denotes account settings. Click the icon.

Step 3: Select Upgrade to a Business Account

On the Settings page, under the Account Options section, look for the option to upgrade to a business account and select it.

Step 4: Fill in the Requested Information

After requesting an upgrade, PayPal requires information about the business you wish to link to the account.

An important detail entails the business type whereby you should specify whether it is a sole proprietorship, partnership, corporation, or nonprofit organization.

Then, click Continue.

Step 5: Make an Upgrade Decision

On the next page, PayPal will ask you to choose between creating a new business account with a separate email address from your personal account and upgrading your personal account to a business account, thereby retaining the current email address.

Choose the latter and press Continue.

Step 6: Finish Upgrading Your PayPal Account

The final step involves providing additional information about the business, including the legal business name you want customers to see when paying and the business phone number. PayPal also asks for the business address, city, postal code, and primary currency for transactions.

Once you complete the required information, check the box agreeing to the PayPal User Agreement and Privacy Statement, then click Agree and Upgrade Account.

How to Downgrade Your Business Account: Steps to Follow

As noted earlier, downgrading a PayPal business account to a personal account is more complex than upgrading a personal account to a business account. There is no self-guided downgrade process. Business account owners have to contact customer support for their accounts to be downgraded.

Here is how you go about requesting a downgrade.

Step 1: Log in to Your Account

Log in to your account using your email address or phone number and password.

Step 2: Look for the Contact Option

Once you log in to your account, look for the Contact Us option at the bottom of the PayPal summary page and click it.

Step 3: Click Message Center

On the Help Center page, click the link to the Message Center located on the top right of the screen to communicate with a PayPal Assistant.

Alternatively, you can scroll down the Help Center page and call the PayPal Help Center. However, it is not the recommended method of communication.

Step 4: Click New Message

Clicking the Message Center link takes you to a separate page. Next, click New Message on the upper right side of the webpage to open a dialogue box.

Use the message box to explain your issues to the PayPal Assistant.

Step 5: Write the Message

The last step is writing your message. The message should state that you wish to have your business account downgraded to a personal one.

Then, click Send message once you are satisfied with your request.

The image featured at the top of this post is ©Ink Drop/Shutterstock.com.