PayPal Business Tutorial

This tutorial is for helping approved crowdfund authors set up a way for their supporters to directly send them funding on a monthly basis through PayPal. A business account is required over a personal one because only business accounts allow you to create monthly subscription buttons for predefined amounts (eg. $1 per month) and for PayPal to automatically subscribe new supporters to your tiers by letting us know of new subscribers. These are similar steps to how you would start your own online shop or business and the information here can be useful for that purpose as well.

Please ensure you also complete the Activate Instant Payment Notifications (IPN) step or else you will be solely responsible for manually including your supporters to the tiers they paid for!

Setting up a PayPal Business account

You will have to create a PayPal Business account since a personal account will not have subscription buttons available. Click on "Get Started" and follow the instructions provided.

Legal Business Name

When setting up a PayPal business account, most people get stuck on the "Legal business name" field especially when they don't have an officially incorportated business. In the United States at least, you do not have to officially incorporate when you start a business and you would legally be considered a "sole proprietor" (otherwise, every kid with a lemonade stand would have to be incorporated). For the "Legal business name" field, many authors and content creators generally use the name they want to be known by. While some aspiring authors use their own name as their legal business name to garner name recognition, others use a pseudonym or a pen name for privacy reasons. Of course, if you actually have a legally incorporated business, use its official name or DBA (Doing Business As).

"What kinds of products or services do you sell?"

For many people, this is the next step in the PayPal business account setup that often gives them pause. If you are an author or someone who makes digital content like posters and videos, the Digital Goods Media-Books, Movies, Music is a good option.

Bank Account

If you do not have a bank account or would like to use a different bank from your own for your PayPal Business account, try to find one that has no minimum checking amounts, no minimum deposit, and no fees. A popular bank in the United States with these features is Ally Bank (https://www.ally.com) which also happens to have one of the highest savings account yields in the nation as of this writing (2018). There are certainly other banks with these characteristics or you may have other needs so do your research especially if you're in a different country.

Should I Open A Separate PayPal Business Account or Convert My Personal One?

Many PayPal users simply choose to convert their personal PayPal account into a business account and use the same account for both personal and business needs. On the other hand, others create a PayPal business account separate from their personal one not only for easier accounting but also so that one account does not contaminate the other in case you run into trouble with one of them. Opening a separate account isn't hard but the only catch is that if you already have a bank account verified with your personal account, you will need a separate bank for your PayPal business account since PayPal does not allow you to link the same bank to multiple PayPal accounts. Luckily, there are many banks that don't charge fees or have minimum deposits so this shouldn't be a high hurdle either. To be part of our crowdfunding program, you can do either process as long as you have a PayPal business account since it is the only type of account that can create subscription buttons.

Disclaimer: This is not official legal or financial advice so please do your own research for your own jurisdiction especially if you are not in the United States. A good place to focus your research on are articles on how your favorite artists, streamers, YouTubers, and content creators from the same country you are from are set up to accept funds, tips, or donations. Setting up a PayPal business account is fairly straightforward though since PayPal guides you pretty well through that process but you can find a few references below to get you started.

Follow the tutorial below after you've finished setting up your PayPal Business account.

Transaction fees and how to reduce them

As already mentioned, we don't charge fees unlike other platforms. However, PayPal has their own fees. Every crowdfunding platform cannot escape transaction fees, even us. How it usually works with most crowdfunding platforms is this:

  1. Supporter makes a payment that goes to the platform. A payment processor like PayPal charges a transaction fee for that transfer.
  2. Crowdfunding platform takes their cut, usually 5%.
  3. Crowdfunding platform then transfers payments to the content creator at the end of the month. A payment processor like PayPal charges another transaction fee for that transfer.
Because of how our program is set up, we manage to cut out Step 1 and Step 2 but one transaction fee is unavoidable. Our platform is reduced to one step because we're not in the middle of it:
  1. Supporter makes a payment directly to the content creator. A payment processor like PayPal charges a transaction fee for that transfer.
We take two fees out but that one transfer fee is unavoidable and that's the fee charged by the payment processor (ie. PayPal). However, there is a way to reduce your transaction fees with a little more work if you're eligible with PayPal through their micropayments program. As per their help article below: "Our micropayment pricing is designed for PayPal Business or PayPal Premier customers who process transactions that are typically under $12 USD. As long as you have a Business or Premier PayPal account, you can enjoy these rates. To update or apply for the micropayments pricing, give us a call by clicking Help at the top of the page and we will assist you further. Our micropayment rate is 5% (6% for crossborder transactions) + $0.05 USD per transaction." You should only really do this if most of your transactions fall below $10. You can read more about it through the resource below:

Create the Subscribe Button

Log in to PayPal and click on "All Tools" in your main navigation.

Choose "PayPal buttons".

Choose "Subscribe".

  • Under "Item name", choose a descriptive name for your tier like "$1 Tier".
  • Leave the Subscription ID blank and the currency to USD.
  • Click on the "Add text field" checkbox and add two fields named id_author and id_supporter exactly in that order.
  • Click on "Customize text or appearance" and un-check "Display credit card logos".
  • Set the billing amount to exactly the tier you plan on pairing this button with so for example, a "$1 Tier" would have a "Billing amount each cycle" of 1 USD.
  • Leave the "Billing cycle" to 1 month(s).
  • Keep the "Merchant account IDs" selection to "Use my secure merchant account ID".
Other than the "Item name" and the "Billing amount each cycle", the rest of your button fields need to exactly match what is in the image below to ensure that crowdfund supporters are not fraudulently charged. You may risk removal of your account from the program otherwise.

  • Choose "No" for "Do you need your customer's shipping address?" Only choose "Yes" if you plan on shipping anything to your members and you explicitly state so in your tier description.
  • Under "Take customers to this URL when they cancel their checkout", enter "https://www.asianfanfics.com/crowdfund/cancel" (this is our crowdfund order cancellation page).
  • Under "Take customers to this URL when they finish checkout", enter "https://www.asianfanfics.com/crowdfund/success" (this is our crowdfund order success page).
  • Save changes.
Copy the resulting highlighted code as shown in the example image below, and paste this into your "PayPal Button Subscribe Code" text field as you are creating your crowdfunding reader tier. This is the code for the subscribe button that will show for your chosen tier. Click on the "Create an Unsubscribe button" link after you have copied this code and continue on to the section below.

Repeat the process above to create subscribe buttons for other tiers. Make sure that the amount set for the subscribe button matches the tier amount you use it in. To view your created buttons, go to Tools->All Tools->PayPal buttons and look for the "View your saved buttons" link near the top of that page.

Create the Unsubscribe Button

An unsubscribe button is required if any of your tiers has a subscribe button to ease the unsubscribe process for your supporters.
After copying and pasting your button code as shown in the image above, click on the "Create an Unsubscribe button" link on the same page which will lead you to the screen shown below. Un-check the "Use smaller button" box and click on "Create Button".

Copy the resulting code on the next page and paste it in your "PayPal Button Unsubscribe Code" field as you create your crowdfunding reader tier. The same unsubscribe button will apply to all subscribe buttons so you will only need to do this once.

Activate Instant Payment Notifications (IPN)

If you are receiving complaints from members not getting subscribed to the tiers they bought from you, it's because you didn't Activate IPN on your PayPal account! If you are already in trouble, go to the tier your supporter paid for and add that supporter in the "Manually Add Supporter" form. Make sure you activate your IPN or you can no longer be part of the program since we are not responsible for manually adding your own supporters for you without PayPal's IPN.
Activate Instant Payment Notifications (IPN) is how you enable PayPal to let us know that a subscription payment was made to you. Our system then automatically gives your crowdfund supporters the abilities listed in the tier they purchased (such as the ability to download PDFs or read an early release chapter) and is how we ensure that your supporters get what they paid for as soon as they purchase one of your tiers. To ensure a fraud-free platform, your supporters must receive what is stated in the tier they purchased in a timely manner or your account will be removed from the crowdfunding program. For more information from PayPal on how IPN works, go to https://developer.paypal.com/docs/classic/products/instant-payment-notification/#
Go to your profile settings page by clicking on the gear icon in your main navigation bar. Choose "My selling tools" and click on the "Update" link next to "Instant payment notifications" as shown in the image below.

Click on "Choose IPN Settings".

Under "Notification URL", enter "https://www.asianfanfics.com/crowdfund/paypal_ipn". Enable the "Receive IPN messages (Enabled)" selection and click "Save".

Your resulting IPN screen should look like the image below.

Securing your PayPal account

Go back to your profile settings page by clicking on the gear icon in your main navigation bar. Choose "My selling tools" and click on the "Update" link next to "Website preferences" as shown in the image below.

Under "Auto return", enter or paste "https://www.asianfanfics.com/crowdfund/success" to let your sponsor know that their subscription payment was successful. Leave "Payment data transfer" at "Off" and set "Block non-encrypted website payment" to "On". You can also set "PayPal account optional" to "Off" which is the default behavior for subscription buttons.