PayPal is one of the most popular names when it comes to online payments. It offers two types of accounts with different fees and benefits. When it comes to PayPal Business account vs Personal, a Business account is ideal for small businesses that want to accept online card payments. A PayPal Personal account is generally suitable for individuals, freelancers, or part timers.
Many of our lists, including best merchant services and best online card processors, include PayPal Business. We looked closely at PayPal Business vs Personal account to help you decide which one is right for you.
PayPal Business vs Personal: Quick Comparison
 | Personal | Business |
|---|---|---|
Best For | Personal use, freelancers, part-timers | Small businesses |
Monthly Fees | $0 | $0 |
Accepting Payments | From other PayPal accounts Invoice | From other PayPal accounts Credit card payments Pay Now buttons Online checkouts Invoice |
Sending Payments | Free to family and friends | Cannot send to family and friends |
PayPal Business vs Personal: Payment Processing Fees
PayPal has different fees for different countries and locations. For our evaluation, we compared the fees for the US.
| Personal | Business |
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Accepting Payments |
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Sending Payments |
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*Fees indicated above are for US domestic transactions. Visit the schedule of PayPal Merchant fees for more details.
PayPal Business vs Personal: Features
PayPal may have different features depending on the region/location. We looked at the features of PayPal Personal and Business accounts in the US.
| Personal | Business |
|---|---|---|
Profile |
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Withdrawal of Funds from PayPal |
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Transaction Limits (for verified PayPal accounts) |
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Other Features |
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PayPal Personal only offers basic transactions and limited features. It functions like a typical digital wallet that lets you make purchases and send payments. It has limited capabilities in accepting payments except from other PayPal Personal accounts. PayPal Personal accounts may also send invoices to other PayPal accounts to request payments.
On the other hand, PayPal Business accounts come with aggregated merchant accounts and enjoy more business-related features, such as adding a point-of-sale (POS) system, requesting payments using payment links, integrating with ecommerce platforms, or processing payments with the PayPal virtual terminal.
Having a PayPal Business account also gives you the ability to allow limited access to the account for up to 200 employees. It also lets you claim tax benefits for any transactions that may qualify for tax deductions. Aside from these, PayPal Business accounts can enjoy lower rates for instant payouts and higher transaction limits than PayPal Personal accounts.
PayPal Business accounts get access to better customer support via the PayPal Business Support Center and take advantage of the PayPal Seller Protection at no additional costs if you meet the requirements. The PayPal Seller Protection covers merchants for the full purchase amount in case of claims, chargebacks, and reversals of eligible transactions.
Ready to take a closer look at using a PayPal Business account? Read our PayPal Business Review.
PayPal Business vs Personal: Expert Take
The main question we aimed to answer when considering PayPal Personal vs Business accounts is which one is more suitable for small business owners. With all the extra features and benefits that come with a PayPal Business account, we recommend it for small business owners that want more flexibility in accepting payments.
A PayPal Business account allows you to accept credit card payments online and in person, set up subscriptions, benefit from higher transaction limits, and be covered by the PayPal Seller Protection. All the extra features of a PayPal Business account are essential for merchants with a growing small business.
However, we think there is value in using a PayPal Personal account for those who only need to receive payments occasionally. It is good for those who might sell products or services every once in a while, offer services, send invoices to request payments, and need a quick and easy way to get paid.
A PayPal Business account would be more suitable once a merchant starts receiving payments more regularly or with larger amounts. Customers are also more inclined to trust a business if the PayPal account reflects the business name.
PayPal allows individuals to have a PayPal Personal and Business account, but they must be under different email addresses. A PayPal Business account may not be downgraded to a Personal account without calling customer support. Thus, it would be sensible for a business owner to keep a Personal account to send and receive money from family and friends and a Business account for all business-related transactions.
Need more information to decide if a PayPal Business account is good for your small business? Read our detailed guide on the pros and cons of a PayPal Business account.
PayPal Business vs Personal Frequently Asked Questions (FAQs)
The choice between personal and business PayPal accounts depends on what you need a PayPal account for. A PayPal Personal account is best for personal transactions, such as online purchases and sending money to friends and family. A PayPal Business account is more suitable for higher transaction limits, commercial transactions, and other business management tools.
A PayPal Business account is not the same as a Personal account. A PayPal Personal account is suitable for individuals who want to make online purchases, send money to friends and family, or receive payments for personal reasons. On the other hand, a PayPal Business account gives your business a more professional image and allows you to enjoy business features, such as ecommerce integrations, reporting and analytics tools, and seller protection.
Yes, PayPal allows the use of Personal accounts for occasional business transactions. However, it is still generally recommended to have a dedicated PayPal Business account to maintain a more professional image and to access specific features and protections tailored for commercial activities.
Some potential disadvantages of a PayPal Business account include higher transaction fees compared to Personal accounts, additional verification and requirements during the setup process, the possibility of account holds that can temporarily restrict access to funds, and limitations on using the account for personal transactions.
Bottom Line
When it comes to a PayPal Business account vs Personal account, the answer depends on your specific needs and goals. A Business account offers a more professional image and access to valuable tools for managing payments, commercial transactions, and business reporting and analytics. However, it may come with higher transaction fees and additional verification requirements.
On the other hand, a Personal account is simpler to set up and better suited for personal transactions or receiving money from friends and family. Consider factors such as transaction volume, the need for business features, and the importance of professionalism in your decision.
Ultimately, selecting the right PayPal account type will ensure smooth transactions and support your unique requirements as an individual or business owner.
