Paypal Personal vs Business Account: Which PayPal Account Is Right For You?

Paypal Personal vs. Business Account

PayPal is a go-to payment processing solution for small business owners as it is easy to use and facilitates even international transactions.

It lets you send and receive money securely and allows making online purchases through your credit/debit cards and bank accounts. However, PayPal offers two options to choose from – Personal account and Business account.

In this post, let us learn more about each of these PayPal versions along with their features and offerings and try to understand the differences between the two to decide which one is right for you.

PayPal Personal Account

This version of PayPal is commonly used as a preferred payment and transaction platform. PayPal Personal is ideal for people looking for a convenient way to transfer money to others and shop online.  It is also suitable for splitting rentals and bills and serves businesses and sellers who want to be paid online.

Though a personal account is primarily intended to make it easy to pay friends and family, it can also facilitate selling goods and services. This type of account can accept payments from buyers if you want to sell occasionally. This makes it perfect for artists and freelancers who want to sell their products/services casually.

You can easily set up a PayPal Personal account with some basic details like your name, email, phone number, address, and credit/debit card information. However, this version of PayPal doesn’t let you accept as many payment methods as a business account. Moreover, the buyer is shown your full name on every purchase.

PayPal Business Account

This PayPal account type offers all the options you find in a personal account with a few more for merchants and business owners.

PayPal Business Accounts are particularly useful for small to medium-scale businesses looking for an affordable, hassle-free payment processing solution. It allows transforming your website into a fully-featured eCommerce store that integrates PayPal payment seamlessly.

With a business account, you can offer subscription-based services to your clients whereby they can complete transactions or register for multiple repeated purchases in one transaction. PayPal business account allows up to 200 users to sign in and access features like profit tracking, inventory tracking setting up shipping methods and costs.

Such an account also provides a host of tools to help businesses with their everyday sales like payment tracking, label printing, and live customer support. A PayPal business account can be opened and operated under your company’s name for better privacy during sales and transactions. Setting up a business account generally takes longer and requires submitting the details of the business.

PayPal Personal Vs Business Account

Let us try to understand some critical differences between PayPal Personal and PayPal Business accounts.


A good thing about both Personal and Business accounts is that neither charge for account setup, cancellation, or maintenance.

You only need to pay the company when you make a sale through the account. Though fees are quite similar for both types of accounts, here is a breakdown of different types of fees for the two versions.

Making a domestic online payment with PayPal is free with the Personal account if there is no currency conversion involved. However, online payments made with a PayPal Business account in the United States are charged at 2.9%+$0.3.

A cross-border online payment made with an international account or card cost a transaction fee of 1.5% plus a fixed fee based on the currency as well as a 4% currency conversion fee for both types of accounts.

Domestic in-store payments are charged at 2.7% for Business accounts and are not available for Personal accounts.

The International in-store payment fee is 4.2% for PayPal Business and cannot be done with a Personal account. The transaction fee varies for sellers using a card reader in a physical store as well as for micropayments.

Pros and Cons

Though PayPal Personal and Business accounts are more similar than different, the two have their unique perks and limitations you should be aware of to be able to make a wise decision.

PayPal Personal


  • Money can be sent easily and quickly
  • No monthly fee, setup, or termination charges
  • Can be linked to a bank account for free withdrawal
  • No fee for transfers made from PayPal Cash
  • Easy way to send money to others
  • Nice payment option for occasional sales on Etsy, eBay, and more
  • Easy to set up


  • Incurs charges for accepting credit and debit cards
  • Sellers have limited access to business services
  • Separating personal and business transactions for tax can be challenging

PayPal Business


  • No setup or monthly maintenance charges
  • More privacy with the ability to register an account under the company name
  • Up to 200 employees can log in to the account
  • Ability to track profits, payments, etc.
  • You can accept credit card payments when the customer has no PayPal account
  • Live customer support is available
  • Access to a wide range of business tools and features
  • Ability to send and receive invoices


  • Sellers are charged a fee for every sale
  • Once set up, there is no way to downgrade
  • Transaction and currency conversion fees can be expensive

PayPal Personal Vs Business – Which is Best for you?

Deciding which of the two PayPal versions you should use is quite easy if you know the primary use of PayPal for you. If you are planning to use it for online shopping or for splitting bills with friends and family, you need not register for a Business account as you won’t require any of its merchant tools and services.

However, if you are a small business owner looking for a convenient way to process online payments, benefit from credits and loans, or invoice your customers, a PayPal Business account is a better choice for you. Make sure you compare the features, fees, pros, and cons well before deciding on the best option.

PayPal is simple to set up and use, offers a plethora of useful services, and is widely accepted by online and in-store merchants. Your choice of the PayPal account depends largely on what you want to use your account for but both Personal and Business accounts offer excellent features and convenience.