Which PayPal options are best for you and your customers?

Are you setting up a craft business or looking to sell your homemade crafts to more than just friends or family? If so, PayPal Friend and family or PayPal Business may be a good secure option for taking payments both online and in person.

Asking your customers to pay cash or by bank transfer is fine but it can leave you open to dispute and can be difficult to track your finances.

So, what is the difference between PayPal Friends or PayPal business? Here are the key differences between the two:

1. PayPal Friends and Family:
   • This usually used for personal payments among friends and family.
   • There are no fees when sending money using this option (when the person you’re sending money to is also in your country). And, it’s free to send money using your PayPal balance or linked bank account.
   • However, selling through Friends and Family doesn’t offer the buyer or you as the seller protection. We therefore don’t recommend it for business transactions or purchases where there might be issues or a need for a refund.
   • According to PayPal, Friend and Family shouldn’t be used for commercial use. PayPal is able flag or limit your account if they think you are using it for business purposes. This would mean you couldn’t use your account for either personal or business use.
     
2. PayPal Business:
   • This option is designed for businesses, freelancers, and organisations to receive payments either through an invoice or by being connected to an online shop or booking platform.
   • Transaction fees apply when you receive payments, and these fees can vary based on which country you live in and the type of transaction (e.g. online purchase, invoicing, or point-of-sale).
   • PayPal Business does however offers additional features and tools for managing payments, generating invoices, and provides customer support.
   • It also provides certain levels of buyer and seller protection, making it a safer option for commercial transactions.

If you’re conducting a business transaction, selling goods or services, or need the added security and features that PayPal Business provides, then it’s generally best to use PayPal Business. However, if you’re sending money to friends or family for personal reasons, you can use PayPal Friends and Family to avoid fees within your country.

We always recommend checking out the latest terms, conditions and fees when setting up PayPal as their regulations are subject to change.

Check out more of our business advice blogs for more top tips.