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Accept Card Payments with PayPal app in QuickBooks Online

SOLVED•by QuickBooks•103•Updated January 29, 2024

Connecting Accept Card Payments with PayPal app in QuickBooks Online lets you quickly and securely send invoices with a ‘Pay now’ button, so your customers can make payments with Visa, Mastercard, American Express, or their PayPal wallet.

After customers make a purchase, their payment will automatically be deposited into your PayPal account and the accounting will be done in QuickBooks Online. This makes it easy to track incoming payments and stay organised.

Note: To download the PayPal app, visit our App Store or select the Apps tab in QuickBooks Online.

The Paypal app provides four key benefits:

  1. Low credit card and debit card fees starting from 1.45% + 0.30 per transaction.
  2. Easy to set up or upgrade from the existing PayPal app.
  3. Improved and simple checkout experience for your customers.
  4. With debit, credit card and PayPal wallet, there are more ways to pay for your customer.

Step 1: Sign up for a PayPal business account

If you don’t already have one, sign up for a PayPal business account. Setting up a business account will let you create a link in your invoice email for your customers to click to pay you.

Step 2: Connect PayPal to QuickBooks Online

Next, it’s time to connect your PayPal account to your QuickBooks Online account. To do this: 

  1. Sign in to QuickBooks Online, select + New. 
  2. Select Invoice.
  3. Select Accept card payments with PayPal. 
  4. Select Launch PayPal. 
  5. Sign in and follow the prompts to grant QuickBooks permission to connect to PayPal.
  6. Select Go back to QuickBooks Online. 
  7. Check the account names and fee categories to make sure they’re correct.

Step 3: Create a unique PayPal link

Now that your business account is ready, create a unique PayPal link to put in your invoices. This is the link that your customers will click in the invoice email to submit payment to you. 

However, there is one important step that must be taken before creating your unique Paypal link: encoding your email address. 

You can't do this in QuickBooks, but you can use any online tool to encode an email address. Search for "URL encoding" to learn how to encode your email address. Then, copy and paste the encoded email into the email message.

Step 4: Add your unique link to an invoice 

Copy this link into an email or onto your invoice so that customers can click it and submit payment quickly and securely. To do this:

  1. In QuickBooks, select the gear icon. 
  2. Select Account and settings. 
  3. Select the Sales tab. 
  4. Select the pencil icon next to Messages. 
  5. In the Email message field, paste the encoded link. 
  6. Select Save.

That’s it! Now that you can use PayPal to receive payments in QuickBooks Online.

Create an invoice and email it to your customers. All they’ll need to do is click the PayPal link in their invoice email to submit a payment to you. When they make a payment to the invoice, payment is automatically created in QuickBooks Online and linked to the invoice.

You can change your PayPal integration settings at any time. Note, only admin users can access these settings. 

  1. Go to Apps (only viewable by admin users).
  2. Select the Find apps tab. 
  3. Search for Accept Card Payments with PayPal. 
  4. Select Settings.
  • Automation - Choose if you want to bring in transactions made on PayPal (but not through QuickBooks), such as Expenses and Money In. This is the transaction sync functionality that was present in the previous Accept Payments with PayPal app.
  • PayPal account - All PayPal payment transactions (minus fees) will be assigned to this Chart of Account.
  • Defaults for income - Select an income account from the dropdown menu for PayPal income transactions to default to. You can also select the default VAT code and choose if you want to use the name “PayPal Customer” or create a new customer whenever the integration does not recognise a customer.
  • Defaults for expenses - Select the default VAT code for expense transactions brought in from the integration.
  • PayPal Fees - Select a pre-existing expense account for recording your fees on transactions from PayPal.
  • Import past transactions - Select a date range within the last 18 months and we will create transactions in QuickBooks to reflect the sales and expenses from PayPal during that time period.

We take extra steps to make sure that your information is safe and secure. We use the highly secure OAuth2 authorisation protocol to transfer your PayPal information to QuickBooks Online.

All transactions will follow the new mapping setting, while the previous imported transactions will remain in their appropriate accounts.

Yes. When a payment is received by PayPal, it will automatically sync with QuickBooks Online, and record detailed information including items sold, quantity, discount, taxes, and so on.

PayPal fees are also imported as an expense in your QuickBooks account.

The app is free to download and use. You'll need a UK QuickBooks Online account and UK PayPal business account to use the app.

PayPal merchant transaction fees apply for receiving online payments.

Yes, you can import up to 18 months of past PayPal transactions into QuickBooks through the PayPal Settings. There's also a real-time sync feature which will bring all your transactions from PayPal into QuickBooks Online with support for Multicurrency.

If your customer paid with a credit card linked to their PayPal account, then the standard PayPal wallet transaction fees (domestic and international) apply.

If your customer pays directly with their credit or debit card (not linked to a PayPal account), then the low card transaction fees apply, currently 1.45% + GBP 0.30.

Important: PayPal account transaction fees (domestic and international) apply to all PayPal wallet payments, which include linked bank accounts, credit and debit cards, and PayPal balance.

The PayPal service is provided by PayPal (Europe) S.à r.l. et Cie, S.C.A. Read and consider reviewing the UK Legal Agreements for PayPal Services before acquiring or using the service.

We explain why you need to use clearing account in your accounting systems here.

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If you have questions about invoices or need help creating, customising or importing them, let us know. Sign in to QuickBooks start a discussion with a qualified QuickBooks Online expert in our community.

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