Online transactions have become a part of our digital world. The cash has turned into digits on the screen and the bill has turned into an e-paper. Several online platforms have made the transactional process easier and faster. The most common platform is PayPal. PayPal has two sub-platforms – PayPal business and PayPal friends and family.
PayPal Business vs PayPal Friends and Family
The main difference between PayPal business and PayPal friends and family is that PayPal business is created for merchants and sellers to carry out transactions for their commercial purposes while PayPal friends and family is created for individuals to send, receive and transfer funds and gifts between friends, family, relatives and a close group of people.
PayPal business accounts can be accessed by many employees simultaneously. There are many features offered that helps in the processing like detailed invoice creation, information about every customer, and quick refund policies. The transactions are secured and regulated by government regulations.
On the other hand, PayPal friends and family can be only accessed by an individual. Anyone with a credit card can use the platform for transactions and payments. There is no tax deduction in these transactions. It is a secure platform with efficient features for personal use.
Comparison Table Between PayPal Business and PayPal Friends and Family
|Parameters of Comparison||PayPal Business||PayPal Friends and Family|
|Audience||The users of PayPal business are merchants and sellers||The users of PayPal friends and family can be anyone with a credit card|
|Usage||Used by a company, business, or group||Used by individuals between a close network of people|
|Advantages||Access of over 200 employees to the merchant’s account, helps in the creation of invoices, provision of refunds, and organize the information about the customers and clients Secure, and no additional charges||Gifts can be sent to different addresses and have an easy refund policy|
|Disadvantages||Large chargeback fees, transactions may take over three business days to get credited and the account can be suspended anytime||Limitations on amount and number of transactions, the extra charge on international transfers|
What is PayPal Business?
PayPal business is an online commercial credit and debit platform for payments in business. It helps in business expansion nationally as well as internationally. PayPal is secure and protects all transactions. It is beneficial for merchants and sellers.
PayPal business can be operated by a company or group under their official name. The business model of PayPal offers additional exclusive features. Some major benefits include the allowance and access of over 200 employees to the merchant’s account. It allows the acceptance of several methods like credit, debit cards, or other mobile payment apps.
PayPal business has the fastest customer services that have effective follow-up and provide instant solutions. It helps in the creation of invoices, provision of refunds, and organize information about the customers and clients. The money transfer to the bank is quick and secure. All the features can be managed on the go.
PayPal business provides the details of the transactions in a sequence and transparent manner. It is useful for all business types, kinds, and sizes. To set up a PayPal business account, there are no charges but certain convenience and maintenance fees are there to operate further. There are even rules for account suspension upon violation of the terms and conditions of the account.
What is PayPal Friends and Family?
PayPal friends and family as the name suggests are specially created for the transfer of money or gifts among friends, family, and relatives. The transfer of money is between a close network of people and the money is for personal use. It does not include any commercial or business-related transactions.
It offers several exclusive features for these personal transactions. Transactions can be done securely for domestic as well as international funds. There are certain charges which have to be paid extra in case of international transfer. Around 2.90% extra has to be paid on the amount which is the transactional as well as convenience fee for converting the money into acceptable form during international transfer.
For domestic transfers, there is no extra charge payment with the PayPal account. Only while paying with a card, some fixed fee has to be paid. There are certain limitations on the maximum amount and number of transactions that can be made in a day and the limit varies for every country.
The transactions in the PayPal friends and family are protected and secure. There is no deduction of tax on those transactions and complies with the governmental financial regulations. It should be only used for personal use and not for any commercial use since it violates the rules and regulations of PayPal.
Main Differences Between PayPal Business and PayPal Friends and Family
- PayPal business is used to buy an item or service from a seller while PayPal friends and family are used to send money or gift to family, friends, relatives, or close ones.
- PayPal business is used for commercial purposes while PayPal friends and family are used for personal and non-commercial purposes.
- PayPal business operates between huge groups while PayPal friends and family is operated by an individual between his/her close network.
- PayPal business charges the merchant during every transaction while PayPal friend and family is free and only charges the individual during payment through card.
- The transactions in the PayPal business can be reported to the IRS while the transactions in the PayPal friends and family cannot be reported to the IRS.
Both the PayPal platforms are used by millions of people regularly. The platforms also have drawbacks like the customer service can be hard to reach at times especially when an immediate solution is required. The protection policies of PayPal do not offer protection over digital items.
Some merchants try to convince the customers to pay through friends and family mode to exempt the tax and charges. An individual should not fall prey to such words. Before every transaction, whether through business or friends and family mode, it is essential to read the terms and conditions of the platform and abide by the rules.