Legal Question in Business Law in California

Generally speaking, California law allows people to have two jobs, and discourages employer #1 from disciplining the employee because of the "moonlighting" work. Nevertheless, there are a few words of caution. Employer #1 might not be happy about employer #2. You might violate some rest-time requirement, e.g. if employment #1 was flying a plane or being a locomotive engineer. Often, however, having a part-time second job is OK with all concerned.

As to the specific kind of work you'll be doing, however, the things said, and the things left unsaid, in your question, do give me some concerns. First, why do you mention that you are an American citizen? Is the friend you'd be working for overseas? Then, you say you'll work for "his payment collection agent." Not for the friend directly?

I think I'd need more information about the "processing" of PayPal transactions you have in mind, and why PayPal's own processing is insufficient to accomplish your friend's collections. My concern is there may be some international currency transactions involved, which may be regulated. In any case, much more information would be needed to tell you whether you need one or several licenses. Generally, any business needs at least a local (city or county) business license, but from the limited facts given, I can't tell whether you'd be running a business or acting as an employee of your friend's business or his "payment collection agent's" business.