How to Sell Digital Downloads with Paypal [2024 Digital Products]

Last updated: January 23, 2024

In today’s digital era, selling digital downloads has become an increasingly popular way to monetize your creativity and share your work with a global audience. One of the most widely used payment gateways for online transactions is PayPal.

In this blog post, we will guide you through the process of how to sell digital downloads with PayPal, enabling you to reach customers around the world and receive secure payments.

1. Sign up for a Paypal account

The first step to selling digital downloads with PayPal is to sign up for a PayPal account. You can sign up for either a Personal PayPal account or a Business PayPal account.

What’s the difference between personal and business PayPal accounts? Which one should I choose?

Both the personal and business PayPal accounts allow you to accept online payments and transactions. However, PayPal has limitations on specific countries where you absolutely need to register for a Business PayPal account in order to be able to accept payments.

If you’re in countries such as the USA or Canada, you can accept payments using either a personal or business PayPal account.

Here are a few more things you’d want to consider before choosing between the personal vs business account:

• Personal accounts are registered under the account holder’s name, while Business accounts are registered under the name of the business or organization
• Business accounts may require additional verification steps, such as providing business documentation or proof of address, to ensure compliance with PayPal’s policies
• You may also be eligible for additional seller protection using the Business PayPal account

Creating a PayPal account is a straightforward process, and yes, it is free to sign up for either the personal or business account. Here are the steps to create a PayPal account:

1. Visit the PayPal website: Go to the PayPal homepage (www.paypal.com) and click on the “Sign Up” button.
2. Choose account type: Select the type of account you want to create.
3. Provide your personal or business information: Enter your personal or business name, email address, and other required information. Follow the on-screen instructions to complete the registration process.
4. Verify your email address: PayPal will send a verification email to the address you provided. Click on the verification link within the email to confirm your email address.
5. Link your bank account and/or credit card: To receive payments and make withdrawals, you will need to link your business bank account and/or credit card to your PayPal account. Follow the prompts to add and verify the necessary financial information.
6. Customize your account settings: Once your account is set up, you can customize your account settings, such as setting up payment preferences, and enabling additional features.

It’s important to note that the specific steps may vary slightly depending on your country or region. We recommended reviewing PayPal’s fee structure and terms of service to understand any associated costs when accepting payments via PayPal.

2. Select an online platform to deliver your digital downloads

So you’ve signed up on Paypal – great! But How does Paypal actually help you sell and deliver your digital downloads? The answer is, they don’t. If you’ve only done step #1 above, it is important to note that Paypal does not do any kind of digital delivery of your goods. You’ll need to manually send each and every one of your customers your digital download file after every transaction – that is a recipe for an administrative nightmare!

To effectively sell digital goods with Paypal, you need a platform that allows you to upload your digital goods, as well as securely and automatically deliver them to customers after they make a purchase. Payhip is an excellent choice for this purpose. Not only does it provide a generous forever-free platform with powerful eCommerce features, it is also very user-friendly and integrates seamlessly with PayPal as a payment gateway.

First, you’ll need to sign up for a free Payhip account. Next, go to Account > Settings > Payment Details and sign in to the Paypal account that you had just created in Step #1.

And…that’s it! You can now sell any digital products with Paypal using your Payhip account.

Once you’ve connected your Paypal account, all you need to do is upload your digital products as product listings. Payhip has comprehensive tutorials (with videos) on how to upload your digital goods as product listings.

3. Distribute your product links or digital shop everywhere

Once you have set up your Payhip account, it’s time to start promoting and distributing the links to your digital goods!

Share your goods or product links on social media platforms, your blog, email newsletters, and relevant online communities. Engage with your target audience and encourage them to visit your Payhip storefront.

4. (Optional) Customize your storefront or embed the product on your existing website

Payhip allows you to customize your digital shop or storefront to reflect your brand and style. You can build a beautiful and professional website without having to write a single line of code (and yes, for FREE!). Payhip provides a comprehensive tutorial on how to build a website for free so you can explore various ways to customize your storefront.

If you already have an existing website or blog, you can embed your product listings on Payhip as a buy button (it can also be an order button or an add to cart button) directly onto your site, offering a seamless purchasing experience for your customers. We recommend reading more about how to add a shopping cart to website to be able to turn any websites into a hustling and bustling online store where you can sell products from it!

TIP: Payhip will also help you to generate an automatic invoice for every purchase. You’ll also be able to enjoy various other features such as free marketing tools (coupon code, affiliate program, cross sell, upsell, etc), automated thank you emails after your customers complete their purchases, embed various widgets and products on your storefront (e.g. Google sheets, Google forms, countdown timers, etc).

Frequently Asked Questions

What are the fees to sell digital goods with Paypal?

PayPal charges a fee for each transaction made through their platform. The standard transaction fee is typically a percentage of the total transaction amount, plus a fixed fee per transaction. The specific rates can vary based on factors such as the seller’s location and the buyer’s currency. If you’re selling in the US, generally speaking the majority of your transactions will be charged with an average of 2.9% + $0.30 fees per transaction.

If you’re also using platforms like Payhip to automatically distribute your digital downloads after successful purchases, Payhip charges an additional 5% fee on top of Paypal’s fees (no monthly fees). This is one of the lowest fees you’ll find in the eCommerce industry as other platforms typically charge higher percentage fees, or charge hefty monthly fees.

Why should I sell my digital products with Paypal?

Selling digital goods with PayPal offers numerous benefits. According to the PayPal website, some key advantages include:

1. Trusted and Secure: PayPal is a widely recognized and trusted payment gateway, providing a secure platform for both sellers and buyers. It employs advanced encryption technology to safeguard sensitive financial information.
2. Global Reach: PayPal allows you to tap into a vast international customer base. It supports multiple currencies and offers localized payment options, enabling you to sell your items to customers worldwide.
3. Seamless Integration: PayPal easily integrates with various online platforms and shopping carts, making it convenient to set up and manage your digital download sales. This integration ensures a smooth and streamlined purchasing experience for your customers.
4. Mobile-Friendly: With the rise of mobile commerce, PayPal offers mobile-optimized payment solutions, allowing customers to make purchases using their smartphones or tablets. This enhances accessibility and convenience for buyers.
5. Seller Protection: PayPal provides seller protection against unauthorized transactions and chargebacks, reducing the risk of financial loss for sellers. It offers tools and resources to help resolve disputes, ensuring a fair and secure selling environment.
6. Customer Confidence: PayPal’s recognizable brand and reputation inspire confidence in buyers. Many customers prefer using PayPal for online transactions due to its familiarity and reputation for buyer protection.

By leveraging the benefits of PayPal, sellers of digital downloads can create a secure and reliable platform for their customers while expanding their reach in the global marketplace.

How often is Paypal payment paid out to sellers?

PayPal payment to sellers can vary depending on the platform or service being used. If you sell digital products with Paypal through platforms like Payhip, sellers will receive instant payouts as soon as PayPal completes the processing of each transaction. This means there is no holding period or delay in accessing the funds.

Once a customer makes a purchase, PayPal processes the payment and immediately transfers the funds to the seller’s PayPal account. This quick payout system allows sellers to access their earnings promptly and efficiently, providing a seamless and convenient experience for digital product sellers using PayPal through platforms like Payhip.

Final Thoughts – Get Started on Selling Digital Products with Paypal

Selling digital downloads with PayPal is a convenient and secure way to monetize your digital creations. By following these steps, you can easily set up your PayPal account, integrate it with Payhip, and start selling your digital item to a global audience.

With PayPal’s widespread recognition and Payhip’s user-friendly platform, you can focus on creating and sharing your digital content while efficiently managing your sales and payments. Good luck with your digital download sales journey!