PayPal Upgrading B2B Payments Tech for Business Accounts

PayPal announced Wednesday (June 22) it is changing the ways business accounts can receive payments “in the coming weeks.”

The company will eliminate the long-standing “Friends & Family” option for business payments, meaning customers will only be able to send these types of payments for goods and services from consumer PayPal accounts. PayPal called it “evolving the ways customers send money” in the press release.

“This update helps ensure that eligible purchases of Goods and Services will be protected for both parties and will drive consistency on our platform, while also removing confusion around which payments are eligible for buyer and seller protections,” the company said in the release. “This will also enable PayPal to help businesses properly reconcile data-keeping and organize personal and business income.”

Under the new setup, business account holders can continue to access business-only features, including automated reporting, invoicing, multi-employee access and more.

Business account holders who currently use PayPal to receive non-business-related payments can use or create a personal account to receive personal payments without seller fees, while using their business account to receive commercial payments.

In its announcement, PayPal also revealed it will streamlining the Goods and Services seller fee to 2.99%, with no fixed fee, for customers in the U.S. PayPal’s current Goods and Services fee is 2.89% + $0.49 USD.

Last week, PayPal debuted PayPal Pay Monthly, a buy now, pay later (BNPL) offering issued by WebBank that lets customers space payments over a long period of time, giving them “greater flexibility and even more choices to pay for the items they want and need.”

Related: PayPal Launches Pay Monthly BNPL Offering

Customers can make purchases between $199 and $10,000, dividing the cost into payments over a six-month to two-year period, with the first payment due one month after purchase.

After a customer selects Pay Monthly, they fill out an application at checkout and, if approved, are offered up to three plans of varying lengths with a risk-based annual percentage rate (APR) ranging from 0% to 29.99%. From there, customers pick the option that best fits their budgets.