PayPal Personal Account vs Business Account – A Complete Guide

PayPal is the default payment gateway for most people that are doing business online. It is working in most countries to provide an alternative to the traditional paper currency in money transfers and payments.
If you are new to PayPal or an old user, they are still some queries left unaddressed. One of the main queries is the selection of the PayPal account. Many small or medium businesses are now making online money, and all need a medium for their payment transfers.
PayPal is offering its services for online payment solutions and providing an alternative to the traditional currencies for these small and medium businesses. They use this payment gateway for local and international transfers.
For these small and medium businesses, there are two options when creating a PayPal account. Either they go for a personal account or a business account. We will discuss the types of PayPal accounts, their limitations, PayPal business account fees, PayPal credit card transaction fee, Paypal business account costs, how to set them up, and how to switch from PayPal personal to a business account. Let’s begin with the basics.

PayPal Personal Account

If you are an individual and wanted to shop, send money to friends and family, and get a payment solution for online needs, then PayPal personal account is the ultimate choice for you. PayPal’s personal account is easy to use for all online transactions and buying and selling services and goods. Similar to PayPal business account cost, it only cost for transaction and sales.
The personal account is suitable for both selling the services and for buying goods from online sources. It is the easy and fastest way to get and sending payments. But on a personal account, your information is visible to the person you are sending or receiving the money. You can occasionally do transactions and sell your services.
One limitation of the PayPal personal account is that the buyer can see your personal information, like the full name on each transaction. This is not a big issue but certainly a concerning one for some people. One other limitation is the limited amount of payment forms you can get compared to the PayPal business account.
You cannot receive or send the payments via invoicing on the PayPal personal account regarding the payment forms. We can say that the PayPal personal account is for those who do the transaction and sell and occasionally purchase the services as an individual. And there is a PayPal credit card transaction fee for its fair usage.

Things required to set up PayPal Personal Account

While creating the PayPal personal account, it asks the user for account creation and authenticity purposes. These are crucial in creating the account, and without these details, your account application has a high chance of rejection.
You need an accurate first name according to your ID. Then you need to enter the last name. Be careful inputting the name in the right field. You need to create a personal account for PayPal, including address, email, phone number, debit card information, and account and routing number.

PayPal Business Account

PayPal business account offers a complete solution for your small and medium business needs. It provides you with more options than a personal PayPal account. The payment solutions on the business account are vast and equally benefit everyone from start-ups to small business holders. The PayPal business account costs nothing besides transaction fees.
It is a hassle-free payment option that involves a better solution to your needs. The PayPal business adopts an affordable model for SMB owners. If you are running a small e-commerce store, then having this account makes it easy for you to get payments. There are no PayPal business account fees on a monthly basis.
Once you setup the PayPal business account for your e-commerce store, the customers on your website get diverted to PayPal for the payment of the services. Other notable features of the PayPal business account include setting up subscription services to enable the customers for easy payments. The customers can sign up for the recurring shipments for a single as well multiple transactions in person.

More Productivity and Benefit

For small business owners, PayPal offers a business account that has extensive functionality. For example, if you run a small business and have staff working in your business, then a PayPal business account makes it easy to allow up to 200 staff members to access them and use PayPal features. These features involve liability to create and set up fees, payment methods, profit tracking, and inventory management.
PayPal makes it easy for business owners to use its suite of services and products for getting help in regular tasks on day to day basis. These services range from online services to track payments, print bills, and get live customer support services. There is a PayPal credit card transaction fee on sales.
There are no options for registering of account under the company name in the personal accounts. Simultaneously, the PayPal business account offers you to set up your account under the company name, helping you protect your privacy during the time of customers purchasing anything from your online store or paying for your services. It has PayPal business account fees only for transactions.

How to set up a PayPal business account?

Creating a PayPal business account is a relatively straightforward process and requires no complex procedures. However, unlike the PayPal personal account, you have to submit specific additional details like business name or address, which we will discuss in the next few lines.

  • First, visit and look for the Sign-Up button and press it.
  • Go to the Business Account option and click Next.
  • Once on the next page, give your Email Address and click Next.
  • Now you need to create a unique login ID and setting up the Password.
  • Enter the Business Contact information in the required section.
  • Before proceeding further, carefully read the User Agreement, Electronic Communication Delivery Policy, and Privacy Policy. Press Agree and Continue.
  • In the next step, you need to tell PayPal about your business. You need to enter your Employee ID number or Social Security Number if you are a sole proprietor.
  • You need to enter your personal website address. If you don’t have any, leave it blank and click Continue.
  • To further proceed with the account creation, PayPal will ask for a few personal information to verify your identity.
  • Once verification is complete, you receive an email to verify your details.
  • After that done, you are ready to create your account and enjoy PayPal business perks on your newly created account.

How to change PayPal account from business to personal?

In case you do not require the PayPal Business account anymore, and you are planning to downgrade it to the personal account, you are probably now finding a way to do that in the account settings. Well, PayPal has not provided any option for changing accounts from business to personal within the settings.
However, there is still a way that can change the account type. Carefully read the post and follow the steps that we have mentioned below to change the account type.

  • You need to log in to your PayPal account and move to the Help section.
  • Once there, click on Contact Us.
  • Now you see a new page, click on Account Profile and Set Up.
  • From there, you see the option Privacy Questions; click it.
  • Then Click on Email Us.
  • It will ask for your personal details. Enter your details like first name, last name, email address, and type in the message in the given space with a subject to change your business account to a personal account.
  • Mention a reason so that customer care understands your concerns well.
  • After completing the steps, you will redirect to a page where you see the message “Your email has been successfully sent.”

Now, wait for the customer care response. Usually, it takes less than 24 hours for a customer care representative to contact you. Once they contact you, they will change your PayPal business account’s status to a personal account.

PayPal Personal Vs Business Account – Which is Better?

Each account type has its own perks and limitations. There is a certain PayPal credit card transaction fee for the cards that we will discuss. We will discuss the benefits and limitation of the personal and business account one by one.

Personal Account Benefits

The personal account has no charges deduction when the transfers are done from the PayPal Cash, PayPal Cash Plus, or from the linked bank account. There are no charges for setup, and you are exempt from the monthly and termination costs. However, there is a PayPal credit card transaction fee on the sale. It provides a faster way for sending money to family and friends or making any online purchases.
If you are running an e-commerce site and having low sales, you can even use PayPal’s personal account for sale from Etsy, eBay, and many other websites. And if you transfer the sales money to the linked account, then it is free. You can pay a minimum fee of 1% and transfer the money instantly to the account. It is opposite to the PayPal business account fees structure.

Personal Account Limitations

PayPal cut the charges for accepting credit cards and debit cards for online use. You get relatively limited access to the merchant services if you are selling services or goods.

Business Account Benefits

Like the Personal Account, it is easy to set up, and there is no monthly maintenance, setup costs, or termination fees apply. But there are PayPal business account fees per transaction. It provides you with exceptional privacy and can register on the company name.
Even you can get payments at ease from the non-PayPal holder through credit card transfers. There is a complete track of the profits, payments, and many other details for your record. It provides access to live customer support for any business-related queries.
You can set up access to 200 employees in the account for different features. Even you can do allotment of different features to the employees and restrict too. You get access to the tools and products related to the PayPal business; if you are a seller, you can directly get payments from the customers via PayPal business.

Business Account Limitations

If you are using a PayPal business account for merchandise, you probably already know that PayPal deducts the merchants’ fees at every purchase. An amount deducts as PayPal business account fees on each transaction. The main limitation that the PayPal business account has is that there is no automatic way to downgrade to the personal account, and you need to contact customer care for that purpose.

Fee Structure in PayPal

The most significant advantage of both the PayPal business and personal accounts is that it doesn’t charge any fees for maintenance, cancellation, and setup process. However, there are certain charges that it cut down from as PayPal Business account fees and PayPal personal account fees.
We have out the breakdown of each.

PayPal Personal Account Fees

There are certain charges that PayPal cut from as PayPal Personal account fees, and it involves following
Domestic Sales (Online): 2.9% of transaction amount + $0.30/sale ($0.30 for eligible charities + discounted rate of 2.2%)
International Sales (Online): 4.4% of transaction amount + currency based (fixed)

PayPal Business Account Fees

There are certain charges that PayPal cut from as PayPal Business account fees, and it involves following
Domestic Sales (Online): 2.9% of transaction amount + currency based (fixed)
International Sales (Online): 4.4% of transaction amount + currency based (fixed)
There are also other brackets for the PayPal business account fees based on the country and type of sale. You can visit the PayPal knowledge base for the details and get more details about the PayPal Business Account fees.

Final Verdict

PayPal is an excellent gateway for payments transaction. Either it is a personal account or a business account, there are certain benefits and few limitations like PayPal business account fees that it charges on each transaction. But it’s the part of the business model and how online money works.

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