No, you don't need to be formally incorporated. Both Stripe and PayPal support sole proprietors and freelancers operating under their personal names.
For Stripe: You can sign up as an individual using your Social Security Number. Just select "Individual/Sole Proprietor" as your business type.
For PayPal: You'll need a business account (free to create), but you can set it up as an individual/sole proprietorship using your personal information.
You can operate under your personal name or a "Doing Business As" (DBA) name without formal business registration.
What information do I need to provide to get verified?
Both processors need to verify your identity for legal and fraud prevention reasons:
Basic Information Required:
Full legal name
Date of birth
Home or business address
Phone number
Email address
Bank account details (for receiving payments)
Tax ID (SSN for individuals, EIN for businesses)
Additional Documentation May Include:
Government-issued photo ID (driver's license, passport)
Business registration documents (if incorporated)
Proof of address (utility bill, bank statement)
Verification typically completes within 24 hours, but can occasionally take 2-3 business days.