New: PayPal Business Payments – $0.50 flat fee online payments

PayPal Business Payments is a PayPal pilot program for businesses only in the United States.


One of the biggest pain points of getting paid for your invoices is waiting for a paper check in the mail. Online payments with a credit card have proven to be a way to get paid faster, but for large invoices, the discount rate can be a hefty cost. Now, you have another option, PayPal Business Payments, which costs $0.50 per transaction (this is PayPal’s pilot pricing and may change down the road).

PayPal Business Payments enables you to collect online payments for a FLAT FEE, instead of a percentage. This is a much more cost-effective option for any invoice (to a maximum of $10,000). For example, on a $5000 invoice, it would cost $150 in transaction fees with a credit card. Now, that’s just $0.50! FreshBooks has been waiting for it since our inception in 2003. Finally, we’re closer to saying goodbye to the paper check.

PayPal Business Payments allows your clients to pay using an eCheck or PayPal balance from their verified PayPal account. Your client is not able to use a credit card if you use PayPal Business Payments, so if this is their preferred option, you need to toggle your invoice to use PayPal Standard instead (on the edit invoice screen).

Get Started with PayPal Business Payments

  1. Create a PayPal Standard account. Already have one? Even better.
  2. Log in to your FreshBooks account.
  3. Go to your “Settings”, and then click on “Accept Credit Cards”.
  4. Select “PayPal Standard” and enter your PayPal email.

PayPal Business Payments

  1. Create a new invoice.
  2. Under “Try Something New From PayPal”, select “Collect payment with PayPal Business Payments for a $0.50 flat fee.”
  3. Click “Save”
  4. Invoice Away!
  5. Quickly get paid by your clients online.

Now, when your client receives the invoice, there will be an option above the invoice to Pay with PayPal. They will then be prompted to sign in with PayPal to pay the invoice using PayPal Business Payments. PayPal business payments

If you’re debating whether PayPal Business Payments will work for your business, please consider:

PayPal Business Payments vs PayPal Standard

paypal business paymentsAfter you’ve sent one invoice with PayPal Business Payments, you’ll see the option for PayPal Standard or PayPal Business Payments when creating your next invoice. You can also turn off PayPal if desired.

To use PayPal Business Payments with your clients, please be aware of the following:

  • Your company address must have the USA as country (in Settings)
  • The client you are invoicing must be in the USA
  • Only for invoices in the currency USD
  • You have to choose EITHER PayPal Business Payments for a flat fee OR full PayPal wallet payments (including credit cards) for a percentage fee
  • Your clients must have a verified PayPal account (or will need to create one)

If you have any questions please call us at 1 866 303 6061 or email FreshBooks Support.

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  • Jrock

    This is awesome if it didn’t require a PayPal account to pay!

  • DougS

    I have been using Paypal for a few years with Freshbooks, but I have my Freshbooks setup with Paypal Web site Payment Pro. Does this feature not work with Web Site Payment pro? I do not see the “try something new” thing you write about when I try to create a new invoice with my current setup.

  • Asa Shatkin

    Would be better if clients could choose to pay with their paypal acct or credit card. When I turned this on, I had clients call me asking, “How do I pay with my credit card?”. I had to update the invoice and resend. Why would I want to do that with every client?

  • Dan Castillo

    I really like where this is going. Two thumbs up. I have already implemented this feature, but none of my clients use it. It would be a huge benefit if I could stop driving to the bank.

    I would propose changes which allows my customers to be able to choose, while they are viewing their bill to pay by check, pay by cc or pay by eCheck. I recommend a setting which automatically applies a user defined % fee if the cc option or eCheck option is selected.

    My clients calling me or emailing me to update the invoice when they want to pay only gives them reason to delay payments or an excuse to pay late. I can be ultimately responsive but as soon as they hang up or hit send, they are onto something else :(

  • troy

    Would be great if you could select both so the client could use their credit card if they wanted, but if they opt to use eCheck, they can do it with the same fee. Cool idea, but kind of useless if the client wants to use credit card. Also, eCheck payments through PayPal tend to take 7-10 days, and then you still have to transfer the money from PayPal to the bank. Sometimes it’s quicker to just get a check if the client will actually write a check.

  • Ryan Steinolfson

    I agree we need to have a way to get around the huge fees we pay for credit cards.

    What I am going to do to get around some of the concerns of the previous comments is I am going to establish with the client up front that they have a PayPal account and then I am going to ask them to pay via this option.

    I also agree that it would be great to be able to define a % fee that we would charge if they choose to pay via credit card vs. via this way.

  • Tom Rogers

    I currently offer selected clients to pay by credit card using my account. Can I have that as an option and the new PayPal Business Payments ?

  • Tom Spilman

    While this does sound nice… PayPal has a bad reputation for freezing accounts. It seems like all it would take would be one client complaint (with or without any cause) and we could have tens of thousands of dollars locked away from us for months. While banks have rules…. PayPal can do what it pleases and it isn’t required to maintain any of the security, customer service or dispute resolution services that banks provide.

    Why should i trust PayPal with serious transactions?

  • Jason Corgiat

    I think there is some confusion here. This is not “getting around” paying credit card fees. It’s just avoiding the client using a credit card altogether. So, as long as the client has a paypal account, and a balance, they can pay you that way and it will only cost you a flat $.50. They do not have the option of using a credit card at all if you want the flat $0.50 pricing.

  • DeeDee Hunt

    I stopped using PayPal because of the horrible customer service and apparent glitches in the system. PayPal became a huge waste of time for my company.

  • John Coates

    Hi Tom Rogers – Yes, you can enable both on your invoices to give your clients the option.

  • John Coates

    Thanks for all the comments! We’re listening and will be working with PayPal to continue improve the experience for you and your clients.

    And this is an option is completely around credit cards, as all credit cards charge sellers through they’re discount rate.

  • Todd Prouty

    Thanks! This is a great option, though I wonder how many businesses (clients, current and potential) are set up to use PayPal payments this way.

    This is one area where Europe really has North America beat. Bank transfers from anyone to anyone cost next to nothing (and in fact, some banks charge nothing) and can be easily set up through online banking as a one-time or recurring payment. But with banks and services like PayPal entrenched as middlemen, I doubt North Americans will have this freedom anytime soon.

  • Todd

    Why wouldn’t I want my client to use Paypal to just pay me directly? What’s the advantage of having Freshbooks in the middle of the transaction? Your announcement doesn’t really explain the advantage here.


  • John Coates

    Hi Todd,

    PayPal and FreshBooks focus on very different parts of your business. FreshBooks provides an entire application, not just a payment system, meant for organizing your business. FreshBooks is all about your invoicing (especially easy invoice creation), expense logging, and time tracking. And then there are reports (focused on PayPal payments and non-PayPal payments) and easy invoice follow-up such as automated late payment reminders. I can go on, but maybe it’s best for you to give us a shout at

  • Alonzo

    Now I’m really confused. When I implemented this on my account several weeks ago I found it to be a good deal for me when clients paid with their Paypal account. But customers who wanted to pay with their credit card no longer would see the option. So I had to edit my invoices. Now I read that John Coats says… and I quote…”Hi Tom Rogers – Yes, you can enable both on your invoices to give your clients the option.” I have not found a way to have my clients select if they want to pay with the .50 option or credit card. If I select .50 that is the only option the client has….or snail mail me a check. ugh!

  • John Coates

    Hi Alonzo,

    You are correct. It is either or. Tom Rogers is using as well as PayPal Business Payments which gives him the option for both. is a completely separate gateway.

  • Stephanie

    I love this new feature, but it is unfortunate that my clients are calling and saying they don’t want to set up a PayPal acct. If they could choose their own option, that would make it a lot better. It makes it a great idea, but quite inconvenient!

  • Eric

    To those posting here who are requesting “a user defined % fee if the cc option or eCheck option is selected.” – Charging a client extra in order to pay with a credit card is strictly prohibited by most (all?) credit card company’s terms of service. Therefore it is against the card company’s terms of service for for Freshbooks or any other company to “mark up” an invoice by any amount if a customer wants to pay with a credit card. That’s why you see certain businesses that offer a “cash discount” of 1-2% for customers who choose to pay with cash or check. This may be an option Freshbooks should investigate adding to their product.

  • Timothy Poplaski

    Since Freshbooks doesn’t handle the payment processing, they aren’t beholden to any sort of agreement with a credit card company. If I chose to add an “eCommerce” or “Convenience” fee, that’s my choice. Whether or not that adheres to my credit card processing agreement is almost my issue.

    Freshbooks should enable it’s customers charge as they see fit, particularly as in several countries the clause requiring merchants charge all comers the same isn’t legal. (In fact, it’s in the process of being changed in the US:

  • Cathy

    Count me in as someone whose PayPal business account was incorrectly frozen. I have zero trust in them. Thanks for offering this service, but I’d suggest that people think twice before letting thousands of dollars enter a PayPal account.

  • Jessamyn Smith

    FreshBooks has no control over the requirement to pay using a PayPal account rather than a credit card, as that is a restriction imposed by PayPal.

    It would be possible to give the payer the option of using business payments or credit cards, but I am not sure that would go over well with the invoice senders. Would you still allow a client to pay a large invoice through PayPal if it meant you were losing 3% of the total in fees? Perhaps at that point, you’d prefer to have them send you a check.

    I am curious about your idea of allowing the payer to choose business payments or not… in essence, that means that your customers would be choosing your transaction fees for you.

  • Jessamyn Smith

    Hi DougS,

    PayPal Website Payments Pro is a different product. The business payments option is for PayPal standard, the top option in your FreshBooks Online Payment Settings. It’s easy to get set up with a PayPal account, if you want to get set up to use business payments. There is a link right on the settings page in FreshBooks. If you have any questions please contact us at

  • Asher Snyder

    The one negative, IMO, is that there’s a 3-5 business day wait before you get your money, versus 1 business day with your own credit card gateway, or 1 day with regular PayPal. For some businesses that 3-5 day wait can make all the difference.

  • Mike

    The article states the following but I don’t see any information for how eCheck works?

    “PayPal Business Payments allows your clients to pay using an eCheck or PayPal”

    Can Admin please explain the eCheck option

    PayPal Business Pro is not a bad idea but service businesses that serve clients (like mine) will not be able to efficiently use this option. Clients like to pay with the option that best works for them and their booking/record keeping.

    Trying to herd all your clients into opening a PayPal account is not worth the time or effort. PayPal Business would be something to talk about if it did not require the client to have a PayPal account.

    This option is better suited for paying sub-contractors who your already paying with paypal. However, Some contractors may not want to wait 3-5 days for payment and opt for instant paypal payment regardless of the fee.

  • tad richardson

    I have one client who pays via ACH transfers directly to my bank account. True, this transaction does not integrate with FB but still have to process check payments as alternative anyway.

    My clients do not want to deal with setting up PayPal and I do not want to pay 3% for credit card processing = stalemate. -tr

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  • John Coates

    Hi Asher, the 3-5 day hold is because of the bank hold, the same as a regular check. PayPal has no option unfortunately to change this.

  • John Coates

    Hi Mike, the eCheck is essentially the same as a check. It is sent directly from your client’s bank account to your PayPal account. More information is here:

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  • Ben Greiner

    Is it possible to enable PayPal, but disable the PayPal Standard (% of invoice fee)?

    When I turn on this new feature it appears that all my existing and recurring invoices default to the % option but I only want to use the $.50 option. Is manually changing them ALL the only way!?

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  • John Coates

    Hi Ben Greiner, It’s best to get in touch with our support team ( They will be able to providing some options for making the switch and more details.

  • James Jackson

    You all might want to partner with I see this company getting huge in the future! All mobile.

  • John Coates

    Hi James – Thanks for the heads up! Letting us know helps us make good decisions with who to partner with.

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  • Patty Gale

    Seems like a great feature IF your clients have a PayPal account.

    We work primarily with offline businesses, have PayPal’s enhanced payments feature so that they can use their credit card online.

    Rarely have we seen our clients go ahead and open up a PayPal account as a result.

  • joell

    its not enable on my settings page…


  • joell

    ooops.. sorry..

    Your company address must have the USA as country (in Settings) – i didnt notice

  • BBruin

    This isn’t that great of news. We use and they do a flat fee of $39.95 for the entire month at our rate of 200 order a month pay pal would charge us $100. I’d say the flat fee I have is way better, plus my customers can pay seamlessly with any card they choose. PayPal is not for pros and at 3% I don’t know why anyone uses them.

  • Andreas


    isn’t that very expensive. They offer it only in the US – in Europe you pay much less when using bank accounts. I don’t see the advantage – or I simply don’t understand the article…

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  • RGB

    Hi everyone, I use the freshbooks system with PayPal 0.50 flat fee for my reoccurring profiles (send rental payments to tenants). It works great.

    BUT!!! It doesn’t seem to give me the option to select the flat business payment method now….any ideas or suggestions? I understand this is a pilot program – perhaps they ended this great service?


  • John Coates

    Hi RGB,

    The option should be available. Make sure that your client’s address is selected as the United States. This is the most common reason it is not working. Alternatively, please call us at 1 866 303 6061 we can can help!

  • Craig Jull

    I think the bottom line from many of your clients and myself included is that we do not trust Paypal as they can easily lock your money up and there is no recourse.
    Also their fee’s are to high and by the time you wait 5 days to get money transferred to your account from them it is easier to get a check sent. The flat fee only works for US based clients, so is not much help to many companies. I do like the idea of getting away from the high Paypal fees.

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  • Trent Alvarez

    Does this still work? I searched and looked and found no way to request payments for a 50 cent fee, unless it’s only enabled by using freshbooks, which I did not try to do. Sent an email to freshbooks asking if this still works and received NO response.

    • Tim

      Hi Trent! Tim @ FreshBooks here!

      I looked through our Support queue and see that we have replied to your email on Friday, January 31st @ 9:36:35 eastern time! Maybe the email accidentally went into your junk / spam mail?

      PayPal is still doing their $0.50 business payments, but they don’t actually offer it through their own site. It was a pilot program they launched with some of their partners (like FreshBooks) but they never mainlined it to the main PayPal system. So as of now, it is a feature that will only work if you’re invoicing through FreshBooks.

      As well, keep in mind that for business payments to work in FreshBooks, both you and your client will need to be based in the US and must have a bank account tied to your respective PayPal accounts.

      Hope this helps, let us know if you have other questions or concerns. :)

      – Tim

      • Trent Alvarez

        Hi Tim, that’s EXACTLY what I wanted to know, thank you very much. Perhaps you guys could add this info to this article? I spent quite a bit of time looking into this before putting my comment here.

  • Katrina

    I would like to use the PayPal .50 flat fee (I’m a freshbooks user), but don’t I need to persuade my clients to become PayPal users? And why would they do that? The credit card charge is not something I like and yet I don’ want my customers to feel negatively towards me if I do away with it.

  • Tim

    Hi Katrina!

    Unfortunately, the terms around the $0.50 transaction fee is set by PayPal and not by FreshBooks. Their terms does require your client to also have an PayPal account.

    There are definitely other options in terms of payment gateway you can use if you don’t want your clients to have an account of some sort (Stripe & Braintree comes to mind), however, you won’t be able to take advantage of the $0.50 flat fee.

    Ultimately, you are the expert at knowing what your clients like and dislike. Keep in mind you can always have more than one payment gateways available to your client, so you can have clients that do have an PayPal account pay you through Business Payments.

    Hope this helps!

    – Tim

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