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PayPal Personal vs PayPal Business: How To Choose The Right One?

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By Sam Nguyen

CEO Avada Commerce

Drive 20-40% of your revenue with Avada
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It feels lovely when your small or medium-sized company (SMB) begins making profits. No matter what you are doing, let’s say you have managed to convert your hobby for candle making into Etsy’s hugely popular cottage industry, you are going to need a way for your clients from all over the world to pay for your products.

Founded in 2000, over 200 million active accounts have been registered by PayPal in more than 20 countries worldwide. Owing to its simplicity of use and its ability to make international transfers even simpler, PayPal has become a go-to payment processing platform for SMB owners. However, for those choosing a PayPal account, there is more than one solution: a personal account and a business account.

Here, we are going to break each one down to help you determine the type of account that is perfect for you.

What is a PayPal personal account?

The personal PayPal account helps you to make encrypted, safe online transfers. You can also transfer money and accept payments using your PayPal personal account.

PayPal personal account is optimal for people who use PayPal mainly for internet purchases or for family members and friends to transfer money. Additionally, you can also use your account to sell products and services.

PayPal personal account makes it possible to connect your bank account to your PayPal account for quick currency transactions and payment methods. It is totally on the house, with no charge at all

For example, if you are trying to sell a shirt that you have never worn on eBay, you can use your personal PayPal account to offer your prospective customers a way to pay for the shirt.

PayPal account is authorized at more than 1,000 online retailers.

What is a PayPal business account?

PayPal business account is perfect for online retailers, as well as other corporate organizations. The account gives the company the options of taking payments without the extra card processing fees.

The PayPal business account also provides its users with online invoicing services and virtual terminal service, in addition to the money transfer services, enabling you to accept your consumer purchases online, or by phone, mail.

These accounts also accept express payment services, allowing the customers to check out quickly using their PayPal account without having to provide personal details. PayPal data indicates that average revenue growth of 14 per cent is seen by firms using the Express Checkout option.

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What are the differences between PayPal personal vs business?

A PayPal business account includes all the functionality of a personal PayPal account. Besides, a business account will exclusively have many unique features that can support the growth and scale of both emerging professionals and already successful businesses.

Here are the significant distinctions between the two forms of PayPal accounts.

1. PayPal personal account

PayPal personal account
PayPal personal account

PayPal personal accounts are built for people who use PayPal mainly for online shopping or for friends and family to transfer money. That being said, products and services can also be offered with this type of account.

For example, if you are trying to sell a shirt that you have never worn on eBay, you can use your personal PayPal account to offer your prospective customers a way to pay for the shirt.

One downside to a personal account is that the buyer can see your real name on each order, which could be a hassle for those who want to stay anonymous when it comes to payment transactions.

Also, you cannot accept as many ways of payment as you might with a business account such as paying through invoicing. You are also not able to take advantage of many of the other functionality provided by a PayPal business account.

In short, a PayPal personal account is perfect for vendors who intend to advertise their goods and services only periodically or informally.

To set up a PayPal personal account, here’s what you need:

  • Your first name and your last name
  • Address
  • Phone number
  • Email Address
  • Data concerning a debit or credit card (optional)
  • Checking the number of the account and routing number (optional)

2. PayPal Business Account

PayPal Business Account
PayPal Business Account

PayPal business accounts entail all that a personal account does and much more. Business accounts provide everyone from big companies to SMB owners who need a little if any-hassle, reasonably priced online payment solution with a powerful set of services.

A PayPal business account, in particular, makes it possible to turn the website into an e-commerce platform that transfers consumers to PayPal for payment effortlessly. A business account also helps to set subscription services that allow your customers to sign up for a single transaction for recurring shipments, as well as for entire transactions in person.

Another benefit with a PayPal business account for small businesses is that it provides a way for up to 200 employees to log in, enabling them to manage PayPal functionality such as the ability to set up delivery methods and payments, stock, and benefits monitoring.

A business account can be licensed under a corporate name instead of your name, which safeguards your anonymity when consumers make a transaction, unlike personal accounts.

Here is what you need to set up a business account with PayPal:

  • Name and address of PayPal account owner
  • The email address of the account owner
  • Name and Address of Company
  • Contact information for company customer support
  • General market details (e.g., market category, company-related keywords, etc.)
  • Name of the bank name.
  • Number for corporate or personal bank account
  • Routing number for the bank

Business account fees vs personal account fees

The big plus of both PayPal’s personal and regular company accounts is that there are no costs for the setup, servicing, or cancellation costs. The payment processor applies transaction costs only when your first item is sold through your PayPal account.

The payments for both are relatively similar. The breakdown is here:

Paypal Personal Accounts Fees:

  • Domestic: 2.9 per cent of the purchase price + $0.30 charge per payment (with a preferential rate for qualifying charities of 2.2 per cent + $0.30 per purchase)
  • International: 4.4% transaction cost, plus a fixed fee based on the currency used in the processing, plus a fixed price based on the currency used.

Paypal Business Accounts Sales:

  • Online domestic sales: 2.9 per cent of the value of the purchase plus a currency-based fixed fee depending on the currency
  • International retail sales: 4.4 per cent of the value of the purchase plus a currency-based fixed fee depending on the currency

Transaction fees vary for merchants who use a PayPal card reader in a physical store, for charitable organizations , and micropayments.

  PayPal Business Account PayPal Personal Account
Online payment made with a PayPal account in the U.S 2.9% + $0.30 USD 2.9% + $0.30 USD
Online payment made with a credit card or debit card in the U.S. 2.9% + 0.30 USD 2.9% + $0.30 USD
Online payment made from an international account or card 4.4% + fixed fee based on currency 4.4% + fixed fee based on currency
In-store payment made in the U.S. 2.7% Not available
In-store payment made outside the U.S. 4.2% Not available

Pros and Cons of PayPal personal account

Pros of PayPal personal account

  • There is no fee required for payments made from a related bank account, PayPal Cash, or a PayPal Cash Plus balance.
  • There are no startup charges, recurring payments, or cancellation fee
  • It gives friends and family a quick, easy way to make online purchases or send money to one another.
  • It offers a simple payment option for those that make regular purchases on eBay, Etsy, or other websites,
  • It is straightforward to transferring money from transactions to a related personal bank account. You may pay a 1 per cent fee (up to a limit of $10) to move money to your account immediately.

Cons of PayPal personal account

  • PayPal charges a fee for accepting debit and credit cards online.
  • There is restricted access to merchant sites for consumers selling products and services online.
  • It is difficult to separate business and individual transactions for tax purposes.

Pros and Cons of PayPal business account

Pros of PayPal business account

  • Setting it up is fast and easy.
  • No setup expenses, recurring management costs (for PayPal Payments Standard), or termination costs.
  • Thanks to the option to file the account under a firm or company name, you get more anonymity than you do with a personal account.
  • Users can receive payments from clients who do not have a PayPal account via credit card.
  • Up to 200 staffs can use the account, and you choose which of the functionality of the account each one can use.
  • You can track payments, profits
  • You get customer support Live.
  • You have access to business software and goods from PayPal.
  • Through PayPal, sellers can receive and process in-store payments.

Cons of PayPal business account

  • Merchants are charged fees for every purchase.
  • You’ve got to call customer service to downsize from a business account to a personal account once your account has been created


Each type of PayPal account has its own advantages and disadvantages. Here is the concise conclusion:

  • Personal: Recommended for individuals who shop and pay online.
  • Business: Recommended for businesses that run under a company/group name. PayPal Business Account offers exclusive features such as allowing up to 200 employees to access your account; redirect for quicker follow-ups, customer service email alias,…

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Sam Nguyen is the CEO and founder of Avada Commerce, an e-commerce solution provider headquartered in Singapore. He is an expert on the Shopify e-commerce platform for online stores and retail point-of-sale systems. Sam loves talking about e-commerce and he aims to help over a million online businesses grow and thrive.