Etsy is one of the most popular online marketplaces for handmade, vintage, and craft supply items. Whether you are an artist, jewelry maker, or craft enthusiast, opening an Etsy shop can be a fantastic way to turn your passion into profit. But before you start selling, you need to understand Etsy’s payment policies—especially if you prefer to use PayPal exclusively for receiving payments.
Many new Etsy sellers wonder: Can I use only PayPal to get paid on Etsy? The answer depends on your country and Etsy’s payment system, known as Etsy Payments. Let’s dive into how Etsy handles transactions, whether PayPal is a standalone option, and what alternatives exist if you only have a PayPal account.
How Etsy Handles Payments: Etsy Payments vs. PayPal
Etsy offers two primary payment processing methods:
1. Etsy Payments (Main Payment System)
Etsy Payments is the default and required payment method in most countries where it is available. It allows buyers to pay using various options, including:
- Credit and debit cards
- Etsy gift cards
- Apple Pay
- Google Pay
- Klarna (for installment payments)
- PayPal (processed through Etsy Payments)
2. Standalone PayPal (Limited Availability)
In the past, Etsy allowed sellers to receive payments directly into their PayPal accounts. However, since Etsy Payments has become the primary payment method, standalone PayPal is no longer an option for new sellers in most countries. If Etsy Payments is available in your country, you must enroll in it, and Etsy will process PayPal payments on your behalf.
Can You Get Paid Only Through PayPal on Etsy?
If Etsy Payments is available in your country, you must use it, meaning payments will be deposited into your linked bank account. You cannot receive funds directly into your PayPal account.
However, if you are in a country where Etsy Payments is NOT available, you may still be able to use standalone PayPal to process payments directly. This option is rare, but it exists in select regions.
How It Works with Etsy Payments:
- Buyers can pay using PayPal, but the funds go to Etsy first.
- Etsy then deposits the money into your Etsy Payments account.
- The funds are transferred to your bank account, not your PayPal account.
So while customers can still pay via PayPal, as a seller, you won’t receive the money directly in PayPal.
Steps to Set Up Etsy Payments (If Required in Your Country)
If Etsy Payments is required, you need to set up a bank account to receive your funds. Here’s how:
- Go to Your Etsy Shop Manager:
- Log in to Etsy.com and click on “Shop Manager”.
- If you haven’t set up payments yet, Etsy will prompt you to do so.
- Select Etsy Payments as Your Payment Processor:
- Enter your bank details for deposits.
- Provide identity verification information (such as government ID).
- Enable PayPal Payments (Through Etsy Payments):
- Even though you won’t receive funds directly in PayPal, Etsy will still allow customers to pay via PayPal.
- Set Up Payout Preferences:
- Etsy deposits earnings into your bank account weekly, biweekly, or monthly, depending on your settings.
Alternatives If You Only Have a PayPal Account
If you don’t have a traditional bank account and only use PayPal, here are some workarounds:
1. Get a Bank Account for Etsy Payments
Since Etsy Payments requires a bank account, consider opening one just for receiving Etsy payments. Many online banks offer free checking accounts with easy PayPal transfers.
2. Use a PayPal Business Debit Card
Some online banks allow you to link your PayPal Business Debit Mastercard to withdraw Etsy earnings. This isn’t a direct deposit into PayPal, but it allows you to access funds quickly.
3. Sell Through Another Platform That Accepts PayPal
If you absolutely need direct PayPal payments, consider alternative platforms such as:
- eBay (direct PayPal payments allowed)
- Facebook Marketplace (can use PayPal for some transactions)
- Shopify (integrates directly with PayPal)
4. Open an Etsy Shop in a Country Where Standalone PayPal is Allowed
If you have a friend or relative in a country where Etsy Payments is not available, you may be able to register your shop under their location and use standalone PayPal. However, this comes with risks and may violate Etsy’s policies.
Why Etsy Uses Etsy Payments Instead of PayPal Alone
Etsy introduced Etsy Payments to create a more streamlined and secure payment system. Here are a few reasons why Etsy prioritizes Etsy Payments:
- More Payment Options for Buyers: Customers prefer multiple payment methods beyond PayPal, like Apple Pay and Klarna.
- Seller Protection & Easier Refunds: Etsy handles disputes and refunds directly.
- Regulatory Compliance: Some countries require marketplaces to manage financial transactions themselves.
- Simplified Tax Reporting: Etsy provides clear earnings statements for tax purposes.
Common Concerns About Etsy Payments & PayPal
1. Will PayPal Payments Still Work for Buyers?
Yes! Even though you won’t receive funds directly in PayPal, customers can still pay using PayPal when they check out on Etsy.
2. Are There Additional Fees?
Etsy Payments has standard processing fees that vary by country, usually around 3-5% per transaction. These fees are deducted before your funds are deposited.
3. How Long Does It Take to Get Paid?
Etsy Payments deposits earnings according to your payout schedule (weekly, biweekly, or monthly). Depending on your bank, it may take 1-3 business days for funds to appear in your account.
4. Can I Link My PayPal Business Account to Etsy Payments?
No, Etsy does not allow linking a PayPal Business Account directly to Etsy Payments. You must provide a bank account for payouts.
Final Thoughts: Can You Use PayPal Only to Get Paid on Etsy?
If Etsy Payments is available in your country, you must use it, and all payments (including PayPal) will be processed through Etsy before being deposited into your bank account. If Etsy Payments is not available in your country, you may be allowed to receive payments directly into your PayPal account, but this is rare.
For sellers who only have a PayPal account, the best solution is to open a bank account specifically for receiving Etsy Payments. This ensures you comply with Etsy’s policies while still being able to withdraw funds as needed.
If you’re serious about selling on Etsy, it’s worth adapting to their system to take advantage of the marketplace’s massive audience and ease of use. While you may not be able to use PayPal exclusively, Etsy Payments offers a smooth transaction process that benefits both sellers and buyers.
Key Takeaways:
✔ Etsy Payments is required in most countries, meaning you cannot get paid directly through PayPal. ✔ Customers can still pay via PayPal, but funds go through Etsy before reaching your bank. ✔ If Etsy Payments is not available in your country, standalone PayPal may be an option. ✔ Opening a bank account is the best workaround for sellers who currently only have PayPal.
By understanding how Etsy Payments works, you can confidently set up your shop and start making sales without unexpected payment issues. Happy selling!