PayPal policy changes: Domain investors might need a Business Account

PayPal is rolling out updates to its User Agreement that will take effect on July 16, 2025.

These changes aim to clearly distinguish between personal and business accounts and outline how PayPal may respond when account activity doesn’t match the declared account type. Additionally, new terms will apply to eligible business users who opt in to PayPal’s Business Account Payment Solutions. A new feature is also being introduced, allowing users to choose a preferred payment method during one-time online checkouts.

For domain name investors, the new policy changes introduce a dilemma of sorts: Should you use the current standard (Personal) account or move to a Business one?

If you opened a PayPal account years ago, long before Business accounts ever existed, but use your PayPal account primarily (or exclusively) for business, you can migrate it to a Business account or open a separate Business account. You also have the option to keep the current account for personal use only, such as to send to and receive funds from friends and family.

Both options are well-defined by the new user agreement. It seems that domain investors that use PayPal for PPC earnings, domain sales payouts, and other functions as a business will have to transition to (or open) a Business account at PayPal.

Long story short:  if you’re using PayPal primarily for business or commercial activity, even as a sole proprietor without formal incorporation, you’ll be required to open a Business account.

With a Business account, PayPal users can:

• Accept payments for goods, services, or donations
• Display a business or company name on the account
• Grant employee access to certain account features
• Access PayPal products designed specifically for business needs

Business accounts may be subject to different fees than personal accounts and are not allowed to receive “personal transactions.” Account holders can, however, send personal payments to friends or family with eligible Personal accounts.

PayPal emphasizes that Business accounts must not be used for personal, family, or household purposes. If personal activity is detected on a business account, PayPal may close it, unless the user agrees to stop such activity or switches to a personal account.

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