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PayPal is one of the largest online payment services in the world, offering two kinds of accounts for different use cases. PayPal calls these Personal and Business accounts.
Personal PayPal accounts are best for those who like to shop or get paid online or for folks who like to split bills between more people. Business accounts are ideal for merchants or businesses as it offers additional features for them.
In this article, we'll break down everything you need to know about PayPal’s Personal and Business accounts. Plus, we'll mention an alternative to PayPal Business accounts – Wise Business.
📝 Table of contents |
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PayPal Personal accounts are perfect for those who use PayPal for sending money to their friends and family or for online shopping.
Apart from receiving money from your friends for paying for pizza, you can also use a Personal account to sell goods and services. This is a great option if you're a freelancer or artist. But remember, PayPal Personal accounts don't let you accept as many forms of payment options compared to a PayPal Business account.
Setting up a PayPal account is quick and simple, even if you've never set up a digital wallet before.
A PayPal Business account has all the options as a Personal account, but also offers more features for small to medium-sized business owners.
For example, PayPal Business accounts allow you to send and receive invoices, plus set up subscription services. Through these services, your clients can sign up for recurring shipments in just one large transaction. You can also make invoices using the PayPal interface. This is fantastic if you're a freelancer and need to send an invoice to a client but don't have any experience making these documents.
Moreover, PayPal Business allows you to use your business website as an e-commerce portal. This can make online purchases for your customers easier.
Plus, PayPal Business account holders get access to a range of other business tools and benefits. For example, business owners might receive occasional offers for PayPal credit or loans. This is a nice feature as you can then use these funds to invest back into your own business.
Also, PayPal offers financing directly through its own institution, allowing you to keep your payment information and bills in one place.
Keep in mind that setting up a PayPal Business account takes a little longer compared to a Personal account. Also, once on Business, you won’t be able to downgrade to a Personal account without contacting customer support.
If you're looking for a PayPal alternative, a nice example is Wise Business. With great fees and low exchange rates, it allows you to both send and receive payments and hold your money in multiple currencies. Plus, with Wise Business, you can do the following:
Get a Wise Business account in minutes
Speaking of fees, let’s have a look at what PayPal Personal vs Business accounts have to offer. Let’s take a look at this table:
PayPal Personal | PayPal Business | |
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Domestic online payments fee | No fee (if there’s no conversion)¹ | 2.99% of transaction amount² |
International online payment fee with an international card or account | 4% currency conversion fee + 1.5 % international transaction fee + fixed fee depending on currency¹ | 4% currency conversion fee + 1.5 % international transaction fee + fixed fee depending on currency² |
Domestic in-store payment fee | N/A | 2.7%² |
International in-store payment fee | N/A | 4.2%² |
💡 Note that you’ll always face a 4% currency conversion fee for any sales made internationally, as well as a 1.5% fee if you receive a payment from another country.² How to avoid this? With Wise Business, you'd only need to pay for the mid-market rate, plus a small fee. |
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While they are more similar than they are different, PayPal’s Personal and Business accounts have distinct advantages and downsides you should be aware of before deciding which to use.
Pros:
Cons:
Pros:
Cons:
Ultimately, it’s pretty easy to decide which of the two accounts is right for you if you decide what you’ll primarily be using PayPal for.
Do you plan to use PayPal to occasionally shop online or to split dinner bills with your friends and family? In that case, there’s no need to sign up for a PayPal Business account at all as you won’t likely need any of its tools or loan options.
But if you're a small business owner and want to process online payments, invoice customers or take occasional credit or loan offers, a Business account is the better choice.
In any case, don’t forget to shop around and check out other options. One of them is Wise Business. It can be a great option if you do a lot of business overseas and need to change currencies from one to the other. Avoid hefty currency exchange fees – with Wise Business, you'll only pay according to the mid-market rate, plus a small fee.
All sources checked on 5 May 2021
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