Setting up a PayPal account takes about five minutes and requires only an email address, a phone number, and some basic personal information. You can sign up on PayPal’s website or through the mobile app, and the process is the same either way. Here’s everything you need to know, from choosing the right account type to verifying your identity and linking your bank.
Pick the Right Account Type
PayPal offers two account types: Personal and Business. Your choice depends on what you plan to use it for.
A Personal account is designed for shopping online, splitting bills with friends, sending money as gifts, and receiving payments if you sell things casually. Most people signing up for the first time want this one.
A Business account lets you operate under a company or group name, accept credit card, debit card, and bank payments from customers for a fee, and give up to 200 employees limited access to the account. If you’re freelancing, running a side business, or selling products online through a storefront, this is the better fit. You can always upgrade a Personal account to a Business account later, so there’s no pressure to decide permanently right now.
Create Your Account
Go to PayPal’s sign-up page or open the PayPal app and tap “Sign Up.” You’ll be asked to choose Personal or Business, then provide the following:
- Email address: This becomes your PayPal login and the address where people can send you money.
- Phone number: Used for security codes and account recovery.
- Password: Choose something strong and unique to this account.
- Legal name and address: Must match the name on your bank account or card so PayPal can verify your identity.
For a Business account, you’ll also need to enter your business name, type, and some additional details about how you plan to use the account. Once you submit this information, PayPal creates your account immediately and sends a confirmation email. Click the link in that email to verify your address.
Verify Your Identity
PayPal is required by financial regulations to confirm who you are. At a minimum, they verify your name, address, and date of birth. Depending on how you use the account, PayPal may also ask you to upload a government-issued photo ID (like a driver’s license or passport) and a proof of address dated within the past 12 months, such as a utility bill or bank statement.
One option PayPal offers is facial biometric verification. You scan the front and back of your photo ID, then take a selfie so PayPal can match your face to the document. This is typically the fastest way to get verified. Business accounts will need to submit business-related documents as well.
Verification matters because it directly affects what you can do. An unverified account can only send a one-time payment of up to $4,000, with an overall cap on total sending. Once you’re verified, there’s no limit on the total amount you can send, and you can send up to $60,000 in a single transaction (though PayPal may cap individual transactions at $10,000 depending on the currency).
Link a Bank Account or Card
To actually send or receive money, you need at least one funding source connected to your PayPal account. Go to your Wallet inside PayPal and add a bank account, debit card, or credit card.
For bank accounts, PayPal offers two ways to confirm the connection:
- Instant confirmation: You enter your online banking login credentials, and PayPal uses a third-party provider to verify your account details on the spot. This also lets PayPal check your balance before transactions so payments are less likely to fail. You can revoke these permissions later in your settings.
- Micro-deposit confirmation: PayPal sends two small deposits (each between $0.01 and $0.99) to your bank account. Within three business days, check your bank statement for those amounts, then go back to your Wallet in PayPal, click the bank account, and enter the exact deposit amounts to confirm. The deposits are temporary and get withdrawn automatically. One thing to watch for: some banks combine the two deposits into a single line item. If you only see one deposit, contact PayPal to finish the confirmation.
Debit and credit cards are simpler. Enter the card number, expiration date, and security code, and PayPal confirms it almost instantly by placing a small temporary charge.
Set Up Two-Step Verification
Before you start using the account, turn on two-step verification (also called two-factor authentication). This adds a second layer of security so that even if someone gets your password, they can’t log in without a code from your phone.
To set it up, click the Settings icon in PayPal, go to Security, and click “Set Up” next to “2-step verification.” PayPal lets you use an authenticator app like Google Authenticator or Microsoft Authenticator. You’ll scan a QR code with the app, and from then on, every login will require both your password and a time-sensitive code from the app. This takes about 30 seconds to configure and is one of the most effective things you can do to protect your money.
Start Using Your Account
Once your email is confirmed, your identity is verified, and a funding source is linked, your PayPal account is fully functional. You can send money to anyone with an email address or phone number, shop at millions of online retailers that accept PayPal at checkout, and receive payments from other people or businesses.
Money that lands in your PayPal account sits in your PayPal balance until you spend it or transfer it. Transfers to a linked bank account are free and typically take one business day, though PayPal also offers instant transfers to a debit card for a small fee. If you’re using a Personal account and want to receive payments for goods or services, PayPal charges a transaction fee on those incoming payments, which you can review on the Fees page at the bottom of PayPal’s site.