Beginning March 29, Paypal is changing the structure of their accounts so that there is a ‘Cash Account’ for holding, sending, and receiving funds which is separate from your actual Paypal account, but linked to it. The short version is that there’s no real changes here that I see, other than – perhaps – a bit more verification needed to send, receive, and withdraw money.
As a result of a new regulation issued by the Consumer Financial Protection Bureau, you’ll need a linked ‘cash account’ to hold the money in your Paypal account. The account will be automatically linked to your Paypal account. They’ll also automatically create the Cash Account for existing users, in many cases. The change will go into effect on March 29, 2019.
You can have a Paypal account without having a Cash Account. For example, if you just want to check out online with Paypal, you don’t need a Cash Account at all. However, if you want to hold money with Paypal, you’ll need the Cash Account.
Paypal notes the following: “Before you can open a Cash Account, we must verify or have previously verified the required identifying information that you provide to us. The required identifying information is: name, physical address, date of birth and taxpayer identification.”
Currently, you can send and receive small amounts of money via Paypal without giving in your Social Security Number. At a certain threshold, they’ll stop you and request your SSN and DOB. Under the new rules, it sounds like you won’t be able to have a Cash Account at all without inputting your SSN and DOB.
Some of us have been shut down from Paypal, myself included, and try avoiding giving Paypal much personal information. Presumably, they’ll require that information going forward. I receive money via Paypal regularly from places like Ebates, Swagbucks, and the like, as well as from friends and family. Hopefully, they’ll deal with us mercifully.
[Updates: Reader Pyro points out that Paypal states: “You will still be able to receive money with a personal PayPal account and transfer it to a linked bank account or debit account, but you will not be able to hold and use a balance in your personal PayPal account.” So you only need to get the Cash Account if you want to send money or use your Paypal balance to pay online.
Also, a reader points out that it might still be possible to send funds with Paypal without verification by funding the transaction with your bank or card. Only balance-funded Send Money transactions are clearly excluded.]
There are likely other nuanced changes taking place in the new terms, but that seems to be the gist of it.
I agree Jr – paypal sucks! I don’t want to have my SSN out there unnecessarily. Used to be if I got paid (usually thru an ebay sale), I would just use my balance for purchases. Not anymore-now to maintain my personal data secure I have to have a check issued for $1.50 a pop, and up to 2 weeks delay.
A few years ago paypal could have gotten away with this nonsense – now we have alternative options. Just have to wait for applepay and some others to become more established. As soon as that happens – hasta lavista, baby, and good riddance!
Anyone know of an alternative to Paypal? I don’t want to use them anymore. Thanks!
I called them due to the changes. I was told that unless I put my social security number in, then I would not be able to access my funds. I advised them that under Federal Law, I was not required to provide my SSN and even though they did have the right to ask, I did not have to provide it. I am not comfortable putting my SSN online. They then told me, if I didn’t? I could no longer use my account. What? Ok if that’s the way you want it? I am closing my account.
I was able to transfer for free my ‘waiting funds’ to an already linked bank account.
Ok, but what is the purpose of these changes? All I see is vagueness about protecting consumers from the CPSC.
I appreciate your research and input here. I got the email from PayPal last night, and I didn’t understand a word of it. Thanks for explaining it to us.
So in the new update I don’t have to put my ssn number to do payments like paying a dude 20 bucks?!
Justin, as long as you have a credit or debit card or bank account linked to your PayPal account, you can send “a dude $20” without providing your SSN. PayPal already converted my acct. to the new rules. I was able to send someone money from my linked bank account and/or card, and I have not provided them my SSN since I don’t need to keep a cash balance in my PayPal acct.
Just received an email overnight from Paypal.
They have moved the goal line.
We have to verify by March 18, 2019. This is 10 days earlier than the March 29, 2019 in their email about this change in policy.
I have planned to pull all my money out. This only means I have to do it sooner.
Paypal sucks again.
Does anyone know which bank debit cards will work for instant withdrawal? This may be a bypass if you don’t want to enter ssn or enter a checking account.
This may be a dumb question but I only use PayPal for getting deposits from places like Dosh, ibotta, etc. and using the balance to pay for some online purchases. I have no bank account linked but have had to verify my SS# in the past. No matter how many times I read the changes, I can’t see how this affects use like this. Am I missing something? TIA
As I recall I haven’t had to verify my SSN, but I have had my account for a long time.
If you are verified, you should be good to go.
Since Paypal isn’t a bank, I prefer they don’t have my SSN.
It appears Paypal has changed already, as of Feb 2019. Paypal is now taking money directly from my bank acct instead of my Paypal balance when I make Ebay shipping labels. I’ve checked my wallet in PP, it doesn’t have PP balance as an option for preferred payment but when I check the in other places in PP, it states it will always use my PP balance 1st. Called PP customer service, an hr on the phone, no resolution, no answers. Problem I have is, this bank acct is strictly only used for transferring my PP funds when I sell something on Ebay, which granted is very VERY far & few in between (UGH), I won’t have the cash in this bank acct to pay for the label. Looks like I will have to hook up my credit card for the label transactions for now on, can’t afford to have overdraft fees from the bank. I guess I could always start creating my labels directly thru USPS.com & use my PP acct to pay for that? Man, I hate CHANGE…LOL!! Glad I found this site b/c Ebay/Paypal communities have nothing on this. Thank YOU!!
Same thing with 1 of 3 accounts I use. One personal, one business, and one wifey account. I compared accounts side by side. Although the settings are the same except linked bank account numbers and names only 1 will bill for a shipping label through the linked debit card. Annoying having these transactions post to the bank. PP is not using PP funds first like the other two.
Thank you for the heads up about this.
I use Paypal to send money to people, because many people have a Paypal account.
But I hate Paypal.
I used to have a bank account linked to Paypal but after have two overdraft charges from Wachovia now Wells Fargo, I unlinked it.
Paypal once tried twice to take money from the linked bank account. The first time I can understand because it was my mistake not to select to pay with my linked credit card, but the second time was their fault. Paypal refused to help with the overdraft fee.
Now I plan on liquidating the money that is in my Paypal account in early March.
If people want money from me, they’re going to have to set up Zelle which is linked to my TD Bank account.
I will have to figure out how to get paid if I sell something on eBay.
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Ebay is changing their primary payment provider away from Paypal. The process has already started and is expected to be completed in 2021. They will be handling all of the payments themselves.