How To Get Paid Through PayPal on Etsy – Making Big Buck via Etsy

How To Get Paid Through PayPal On Etsy

If you have a thing for handcrafted goods, you are probably familiar with Etsy. But if you’re considering becoming a seller, and wondering how to get paid through PayPal on Etsy, then this post is for you.

What sets Etsy apart from other online marketplaces is that it only sells homemade, antique, vintage, artisan, and specialty goods that are not readily available on other platforms. Most products that fall into this niche include jewelry, arts and crafts, stationery, houseware, digitally downloadable items, specialty soaps and candles, baked goods, and artisanal candies. Vintage items must be at least 20 years to qualify.

Because of this, Etsy is the best resource for sellers who want to sell their unique items online and be assured that it will be received by the right target market. For the ease of merchants and customers, Etsy offers a wide range of payments, including PayPal.

So, let’s take a look at how you can get paid on Etsy.

How to Get Paid on Etsy

One of the best things about Etsy is that you can set up shop without paying a dime. Once you have opened your stores, you will need to add your product listings. Each listing will cost a small amount and you will also be required to pay a transaction and processing fee (more about this later).

However, once a customer buys your item, it is time for you to get paid. There are several payment options you can use on Etsy.

Etsy Payment

Spending On Etsy

Etsy Payment is Etsy’s very own payment gateway. This is the easiest way to get paid. This payment gateway allows buyers the convenience to use most payment methods to buy from your shop and enables merchants to accept all major credit and debit cards, PayPal Etsy gift cards, Apple Pay, Google Pay, Ideal, Klarna invoices and Sofort transactions. The deposits are transferred directly to your bank account.

However, Etsy Payment needs to be available in your country to make use of this service.


If you are living in a country where Etsy Payment isn’t available, paying through PayPal is the next best option for you. PayPal is a secure service that processes online payments. Buyers can use their credit cards or PayPal accounts to submit the payment for Etsy orders without having to share their confidential and private financial information with the merchant.

In this guide, we will discuss how to set up your PayPal account on Etsy and how the payment gateway works on the platform.

Payment via Mail

Another payment option you can utilize is payment through the mail. The buyers mail you a check or a bank draft once they have bought the goods from your shop.

There are also other types of payment options available and merchants can directly coordinate with their buyers to process their transactions through them.

Now more on PayPal:

PayPal Payments Through Etsy

There are two versions of PayPal that Etsy supports: the integrated version and the standalone version.

Integrated PayPal

The integrated PayPal allows sellers to receive payments made through PayPal directly to the Etsy payment account rather than their PayPal account. This means you don’t need to sign up and make a separate PayPal account for Etsy. Even if the buyer makes the payment via PayPal, the funds will be credited to a merchant’s payment account.

The standard Etsy Payments processing fee is applied to all the orders that go through PayPal. There are no additional fees for PayPal.

Currently, this is the only way people who live in countries where Etsy Payments is available can get their payments.

Standalone PayPal

Some sellers can also use standalone PayPal. This payment method is only eligible for use to those sellers whose country does not support Etsy Payments. This means that when a buyer pays a merchant using PayPal service, the proceeds will be deposited to your PayPal account.

Sellers who accept payment in their PayPal account will need to pay the PayPal processing fees. That’s because payments through standalone PayPal are eligible for the Etsy’s Seller Protection Program.

Additionally, Etsy also reserves the right to allow sellers in countries where Etsy Payment is available to use standalone PayPal for a certain period of time. During this transition, Etsy may need to process your payments through integrated PayPal.

For example, if a buyer wants to make payments for his order partially through Etsy Credit or Etsy Gift Card and partially through PayPal, Etsy will only be able to process the transaction through integrated PayPal. The same processing will also be applicable to buyers who choose to buy several items from different shops on Etsy and choose to use PayPal as their payment method.

Payment through PayPal: How to Get Started

The first thing you need to do to get payments through PayPal is to go to and sign up on it. Merchants should sign up for a Business or Premier account rather than a personal account. This is because personal accounts have monthly limits and it cannot accept payments that are made through credit cards.

Adding PayPal to Your Etsy Store

If you are situated in a country where Etsy Payment is available, PayPal will already be included in the payment methods you can accept. However, sellers will not be able to accept the payment in their PayPal accounts. All of the orders, regardless of whether they are made through PayPal, will be accept into your bank account.

But if you live in a country where Etsy Payment is not eligible but PayPal is, and your shop isn’t yet open to the public, you will be able to add PayPal under the “Get Paid” tab. You will be required to enter the email address you use to accept payments in your PayPal account.

If, however, your shop is already open for business, you can follow these steps to make PayPal payments:

  • Go to “Shop Manager”
  • Press on “Finances”
  • Click on “Payment Settings”
  • Then go to “Accepted payments”
  • Click on “Enable manual payment methods”
  • Toggle the “PayPal” option to “on”
  • Add the email that is associated with your PayPal account
  • Hit “Save”

This will allow payments to be made directly to your PayPal account.

What Does The Lack of Standalone PayPal Mean for Customers?

In 2017, Etsy required all its sellers to accept Etsy Payments. Those sellers who were using PayPal during that time were allowed to keep it as an option and receive payments on it. However, as of May 15, 2019, Etsy no longer allows money to be deposited into the seller’s individual PayPal account.

PayPal will still be there as a payment options but funds will go to Etsy to distribute to their sellers. Etsy will take responsibility to deposit all your proceeds in your bank account in your local currency, no matter in which currency the buyers pay. You have options to select whether you prefer to be paid on a daily, weekly, biweekly or monthly basis. You can also request additional deposits anytime and you will be qualified for the Etsy Seller Protection Policy.

However, for many sellers, this is a point of concern.

Since the payment is going directly to their bank accounts, sellers may have to wait to take out their money depending on how much deposit the account has. This results in delays which the sellers do not want.

Another point of concern is the PayPal Working Capital loan. PayPal offers sellers using its services loan based just on how much money is coming into their PayPal account. Since Etsy forbids sellers from redirecting payment into any other account but theirs, most sellers are concerned they will never again be able to qualify for a PayPal loan since the PayPal account isn’t generating any income.

Sellers may also experience an increase in fees with sales coming through Etsy Payments. The cost is different from country to country but when you sell a product, the transaction fee is 5 % of the total cost of the item, gift wrap and shipping as well as 3% plus $0.25 payment processing charges.

Additionally, every added listing or renewed listing is charged with a 0.20 listing fee.

All of these costs combined make for quite a big sum.

One of the advantages of using PayPal was lower fees and instant payment, which effectively ended in May 2019. Additionally, many people also pay routine bills through their PayPal account but with cash ending in their bank accounts, they will need to manually upload it on their PayPal account and then make the payments.

Bottom Line

Hopefully, in time, Etsy will be able to streamline its payment process and make its fees more affordable. Even though by doing away with standalone PayPal payments, Etsy may have earned the ire of many of its sellers, it still remains one of the most relevant marketplaces for people who want to sell antique and specialty goods. Hopefully, this blog post on how to get paid through PayPal on Etsy will have opened your eyes to some of the limitations set by Etsy.