Have you been confused about which PayPal account to choose – business or personal? If answered yes, you should read this post as we’re going to demystify the entire process of signing up with PayPal and selecting the ideal type of account.
Initially, you start by signing into a Personal account and eventually upgrade to a business account. PayPal primarily offers two different accounts – PayPal for personal use and PayPal for business. Signing up with each account requires no fee and both accounts have distinct features. To know more on which account to choose, keep reading!
Should an online shopper choose a PayPal Personal Account?
Yes, if you’re an online shopper, a personal account is the right option for you. With a PayPal personal account, you can:
- Shop on e-commerce websites like eBay paying through your debit card, credit card, or your bank account
- Receive and send money to anyone
- Accept payments (through debit/credit card & bank accounts) at a low fee when you sell on e-commerce websites.
Should an online business owner choose a PayPal Business account?
If you operate an online business, it is a pivotal decision to make the right choice while choosing your PayPal account structure. By choosing a business account, you can:
- Accept debit/credit card & bank account payments at a minimal fee
- Maneuver in your business or company name
- Give independent access rights to your employees and manage users easily
- Review the Business Setup manual
PayPal Personal vs. Business – Analyzing the differences
Thanks to this payment processor’s user-friendly nature and its ability to expedite international transactions that it has become a go-to solution for all small business users.
Nevertheless, as it offers two varied account structures, you have to be aware of the differences between the two to be able to choose an appropriate account for your business.
Read on to know the key dissimilarities between the two.
PAYPAL PERSONAL ACCOUNT
The personal account is intended for those who mainly use PayPal for sending money and online shopping. Having said that, it has to be mentioned that this account can be used to sell services and goods too.
For instance, if you’re trying to sell a pair of branded sunglasses, that you’ve never worn, on any e-commerce site like eBay, you can use this account as this will give your buyers a seamless method of payment.
However, the only pitfall of using a personal account is that the buyer can view your full name during the purchase process. Moreover, you can’t accept multiple modes of payment that you could with a business account.
Hence, in a nutshell, a personal account is perfect for occasional sellers who infrequently market their services and goods.
PAYPAL BUSINESS ACCOUNT
A business account covers everything that a personal account offers and much more. These accounts offer a wide array of services for everyone from SMB owners to moonlighters who are looking for an affordable and no-hassle payment processing option.
With a PayPal business account, you can easily convert your website into an e-commerce portal. Through this portal, you can smoothly send clients to PayPal for payment. It also lets you set up subscription services through which customers can sign up for persisting shipments in one transaction.
For SMBs with multiple employees, a PayPal business comes to the rescue as it permits up to 200 employee logins. Each employee can access the features of a business account like setting up shipping fees, profit, and inventory monitoring.
PayPal business accounts also present a host of services and products to assist businesses with their daily operations like track payments, print labels, and get 24×7 customer support.
Unlike a PayPal personal account, a business account can be registered under the name of the company instead of your name. This helps you safeguard your privacy when clients transact with you.
A Quick Glance at the Pros and Cons of PayPal Personal and PayPal Business accounts
PROS OF PERSONAL ACCOUNT
- No charge for money transfers done from PayPal Cash or a linked bank account
- No monthly fees, no setup costs, or termination charges
- Offers an easy and fast way of sending money and buying things online
- Gives an easy option for payment to those who occasionally sell on Etsy or eBay
- Free transfers from sales to a linked bank account
PROS OF BUSINESS ACCOUNT
- Easy to setup
- Improved privacy than a personal account
- No monthly maintenance fees, no setup costs, no termination charges
- Up to 200 employees can access a business account
- Live customer care support
- Track profits and payments
- Get access to PayPal products and business tools
- Sellers can accumulate payments via PayPal Here
CONS OF PERSONAL ACCOUNT
- Charges fees for accepting credit/debit cards online
- Digital users have restrained access to merchant services
- Separating personal transactions from commercial ones is a challenge
CONS OF BUSINESS ACCOUNT
- Fees are charged to merchants for each purchase
- Once upgraded, there’s no way you can downgrade to a personal account
Personal Account vs. Business Account – Fee Structure
For set up, maintenance of accounts, or cancellation, PayPal doesn’t charge any fee, in both the account structures. This payment processing company only charges transaction fees when you sell your first item through your PayPal account.
Sales Breakdown from Personal Accounts
- Domestic: 2.9% of the transaction amount along with a $0.30 fee/sale
- International: 4.4% transaction fee along with a fixed fee as per currency used while transacting
Sales Breakdown from Business Accounts
- Domestic digital sales: 2.9% of the transaction amount along with a capped fee according to the currency used
- International digital sales: 4.4% of the transaction amount along with a capped fee according to the currency used
However, it has to be kept in mind that transaction fees will vary among merchants who leverage PayPal in a physical store, for micropayments and 501© (3) organizations.