PayPal Business vs Personal: Which one is best for you?

Adam Rozsa

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

PayPal Personal

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.

PayPal Business

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.


Meet Wise Business: A great PayPal alternative

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 bank details for different countries and get paid like a local – using a single account.
  • Pay up to 1,000 people without crazy fees.
  • Receive payments from anywhere in the world without hefty conversion or recipient fees.
  • Pay invoices in more than 70 currencies, and save up to 19x on fees.

Get a Wise Business account in minutes

PayPal Business vs Personal: Fees

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 PersonalPayPal Business
Domestic online payments feeNo fee (if there’s no conversion)¹2.99% of transaction amount²
International online payment fee with an international card or account4% currency conversion fee + 1.5 % international transaction fee + fixed fee depending on currency¹4% currency conversion fee + 1.5 % international transaction fee + fixed fee depending on currency²
Domestic in-store payment feeN/A2.7%²
International in-store payment feeN/A4.2%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.

Open your business account

PayPal Personal vs Business: Pros and cons

PayPal Personal vs Business: Pros and cons

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.

PayPal Personal pros and cons


  • Not many ancillary fees, like monthly fees or termination charges.
  • You can transfer money from sales to a linked personal bank account for free.


  • There are fees for accepting both debit and credit cards online.
  • Limited access to merchant services for those who want to sell goods or services.

PayPal Business pros and cons


  • Extra ways to accept payments, plus additional payment tracking tools.
  • You can send and receive invoices.


  • Once you upgraded to Business, you can only downgrade the account by reaching out to customer service.
  • There is a 4% currency conversion fee, plus an additional 1.5% for international payments.²

Join Wise Business

Bottom line: Which one should you choose?

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.

  1. PayPal Consumer Fees
  2. PayPal Merchant Fees > PDF

All sources checked on 5 May 2021

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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