PayPal Personal vs Business: What is the Right Option for UK Entities?

As soon as you need to send or receive payments on behalf of your business, it’s important to get a dedicated business account, to keep your personal and company finances separate. You can open a business bank account, or pick a non-bank service, like PayPal UK which has services for individuals and merchants alike.

Confused about the difference between PayPal personal and business? Not sure which is right for you from PayPal personal vs business accounts? This guide has you covered, with a detailed look at both, including how to upgrade to a PayPal business account in the UK, and the PayPal selling fees (UK) you’ll need to understand.

We’ll also touch on an alternative to PayPal - Wise Business, which has low cost ways to manage your money, send and receive payments, with just your phone.

💡Learn more about Wise Business

What is a PayPal business account?

PayPal’s business services¹ in the UK are split according to customer need. There are business services for companies with a turnover of 25 million GBP or less per year, and enterprise level services for larger companies. Plus, there are different options for platforms and marketplaces and for developers.

As a business level customer you can use PayPal to:

• Accept payments from customers online, in person, by phone, email or with a QR code
• Send payments to others in various currencies, including mass payout options
• Spend with a linked PayPal business debit card
• Manage risk with fraud prevention tools and seller protections
• Access PayPal working capital and loans
• Streamline operations with business insights and support with dispute resolution

On Trustpilot, PayPal scores a pretty low 1.3 out of 5 star rating^² - but bear in mind that this is from only about 27,000 reviews, a tiny number in comparison to the huge global customer base PayPal has.

Difference between PayPal personal and business

There are a few important differences between a PayPal business account vs a personal account, which you’ll need to understand if you plan on using PayPal for your company. PayPal business accounts have different features^³ - and different fees, too - so you’ll need to compare your options to make sure you have the right account type for your specific needs.

With a PayPal personal account you can:

• Send and receive payments from friends and family locally and internationally
• Send money to others as a gift
• Shop online and get buyer protections

Personal PayPal accounts can be used by casual sellers - but not by people who are primarily using PayPal for business, or who want an account in a company name. In this case you’ll need PayPal Business, which gives you access to:

• PayPal merchants services and seller protections
• Ways to accept payments from customers
• Options to add team members to your account

The fees you pay for PayPal business are quite different to the personal charges - and the service options available are very varied too. You can’t send or receive a friends and family payment with a business account, for example - all transactions are treated as commercial transactions and charged commercial fees. We’ll look at the costs next so you can compare personal vs business PayPal charges for yourself.

PayPal business account UK - overview

Let’s look a bit more closely at the PayPal business services for companies with an annual turnover of 25 million GBP or less.

With a PayPal business account you can get paid in person, online and using a QR code, making this a good option for people trading online, or managing a mixed on and offline business. You can integrate PayPal checkout into a webstore, or use your PayPal account to get paid through marketplace sites. From your PayPal account you can send money to pay contractors or suppliers - although as we’ve mentioned, you can’t usually send a personal payment from a business account. You’ll also be able to withdraw your money to a bank account conveniently by linking PayPal and your bank.

Finally, you can add other team members to your PayPal account with limited access, and you’ll also be able to get a PayPal business card for spending and cash withdrawals and access working capital and loans.

PayPal selling fees UK

Here’s a look at the key PayPal UK business fees. Bear in mind that costs can vary a bit depending on the specific details of your account and the transaction type, so it’s important to review the full PayPal fee schedule yourself to make sure you’re clear on how fees impact your particular business.

Want to save on international fees?
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Upgrade PayPal to business account

You can easily upgrade PayPal to a business account if you already have a personal account and then start to use PayPal for your business. Here’s what you’ll need to do^⁶:

1. Log into your PayPal personal account and go to Settings
2. Click Upgrade to a Business account
3. Follow the steps on screen to add the required information and upgrade

Wise Business Account: alternative to PayPal

PayPal has a huge global user base, but for merchants sending and receiving payments in foreign currencies, it’s not always the best solution. You may find you can save with an account that’s optimised for international use from Wise Business.

Wise business accounts can hold 40+ currencies and receive payments conveniently in up to 8+ currencies. You’ll also be able to convert from one currency to another in your account using the mid-market rate and low fees from 0.43%, with no hidden costs or charges. Order a Wise Business debit card and you can use that too, for spending and withdrawals globally, with the mid-market rate and low fees every time.

Wise has over 16 million customers globally, - and 195,000+ of them have so far rated Wise on Trustpilot^⁷, with an aggregate score of 4.2 out of 5.

Get started with Wise Business 🚀

Wise Business account fees

Open Wise Business account

Using a Wise Business account when you need to send and receive international transfers can help you save money. You’ll get the mid-market exchange rate with no markup and low fees from just 0.43% depending on the currencies involved. It’s also easy to transfer money from your PayPal account to Wise if you need to.

Get your Wise Business account online or in the Wise app, for a one time fee of £60, hold and exchange 40+ currencies, and get paid in 8+ currencies. Plus for day to day use you’ll be able to get a business debit card for yourself and linked expense cards for team members, to make spending and withdrawals simple at home and abroad.

Here’s a quick step-by-step on how to send money from a PayPal account to Wise:

1. Register for a Wise Business account online
2. Use your Wise Business local account details in the currency of your choice to link to PayPal
3. Make a withdrawal from your PayPal account to Wise

This guide should clear up any mystery about the differences between a PayPal business account vs personal account (UK). Which is right for you will depend on the type of transactions you need to make, and whether you’re transacting for a business or as a casual seller.

Bear in mind that PayPal’s merchant fees are quite different to personal charges, so you’ll need to read up before you upgrade your PayPal account to business. You might find you’re better off if you also get a smart multi-currency account from Wise Business to hold, send, spend and receive foreign currencies conveniently and with the mid-market rate and low fees.

Get started Wise Business
multi-currency account 🌎

Sources used in the article:

Sources last checked October 24, 2023