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

Adam Rozsa

15.11.23 (updated more than 1 year ago)

Read time 4 minutes

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 to split bills between more people. Business accounts are ideal for merchants or businesses and 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 Business PayPal Business vs Personal: Fees PayPal Business vs Personal: Pros and cons Bottom line: Which one should you choose?

PayPal Business vs Personal: Key features

PayPal Personal

PayPal Personal accounts are for those who use PayPal for sending money to their friends and family or for online shopping.

PayPal Personal accounts are not intended for selling goods or services or making any other commercial type of transaction.

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 PayPal invoices, plus set up subscription services. Through these services, your customers can sign up for recurring shipments in just one large transaction. You can also make invoices using the PayPal interface. This is useful 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.

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.

Get a Wise Business account online

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 account details for different countries and get paid like a local – all in one place.
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 multiple currencies, and save on fees
Alwyas get the mid-market rate when making currency conversions

PayPal Personal vs Business: 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 Personal	PayPal Business
Standard withdrawal to eligible linked bank account	No Fee (when no currency conversion is involved)¹	No Fee (when no currency conversion is involved)²
Instant withraw to bank account	1.75% of amount transferred (Minimum and Maximum fees apply based on the card withdrawal currency)¹	1.50% of amount transferred (Minimum fee applies based on the card withdrawal currency)²
Receiving international payments	Fixed fee for personal transactions (based on currency received) + currency conversion spread where currency conversion is involved	Fee for receiving domestic transactions applies plus the additional 1.50% percentage-based fee + fixed fee (based on currency received).
Paying for goods or services in a currency other than the currency the goods or services are listed in	4% currency conversion spread, or such other amount as may be disclosed to you during the transaction¹	4% currency conversion spread, or such other amount as may be disclosed to you during the transaction²

💡 Both PayPal Business and personal accounts come with a 4% currency conversion fee when paying for international goods.² How to avoid this? With Wise Business, you'll always get the mid-market rate, and will only be charged a small transparent fee.

The true cost of sending USD to EUR

PayPal Personal vs Business Limits

Each account also comes with withdrawal limits. These limits depend on the frequency and method of withdrawal, and there are some significant differences between the two accounts. The PayPal Business withdrawal limits are higher, as businesses typically deal with larger volumes than personal users. The personal limits are suitable for personal use, but would delay operations for business who need to withdraw higher amounts.

	PayPal Personal¹	PayPal Business²
Instant transfer for bank	25,000 USD per transaction	25,000 USD per transaction
Standard and Instant Transfers for Cards	Per transaction: 5000 USD Per day: 5000 USD Per week: 5000 USD Per month: 15,000 USD	Per transaction: 50,000 USD Per day: 100,000 USD Per week: 250,000 USD Per month: 500,000 USD

You can also read the guide to learn more about PayPal Business transfer limits.

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

Pros:	Cons:
Not many ancillary fees, like monthly fees or termination charges. You can transfer money to a linked personal bank account for free.	There are fees for accepting both debit and credit cards online. No access to merchant services for those who want to sell goods or services.

PayPal Business pros and cons

Pros:	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. Additional 1.5% fee for international commercial transactions.²

Join Wise Business today:
Easy to set-up, easy to use

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, or invoice customers, you'll need a business account.

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 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.

Read next:
Wise Business vs Personal

Sources:

All sources checked November 2023.

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.