Paypal sent out changes which are coming to their user agreement on July 28, 2022. A summary can be viewed here. Below are the changes, my commentary follows:
- U.S. business accounts will not be able to receive personal transactions from U.S. PayPal accounts. U.S. PayPal accounts will not be able to send personal transactions to U.S. business accounts.
- Seems like ‘Send Money’ transactions between personal and business accounts won’t have the option of being labeled ‘friends and family’ to avoid fees. If you want to send money from a personal account to a business account you’ll have to label it ‘goods and services’ and pay the transaction fee. Tangential note: by labeling it as ‘goods and services’ it’ll likely get added into the business 1099-K if they meet the $600 threshold for the year.
- The rate for the “Send/Receive Money for Goods and Services” payment type will be 2.99% (with no fixed fee). This pricing change will result in fee increases for some transactions.
- The fee for ‘Send Money’ has always been 2.90% + 30 cents. After July 28th it’ll be a flat 2.99%. That saves money on lower transactions but costs more for higher transactions, the changing point being around $333. Not a huge change unless you send large amounts.
- When you Send Money to family and friends and pay with a credit card, the fee has always been the same as for ‘Send Money for Goods and Services’. I assume the fee for that will change to a flat 2.99% fee as well.
Related note: sometimes ‘family & friends’ transactions paid with credit card are considered a cash advance. We wrote about that and how it affects each bank in this post.
View Comments (19)
Just another reason to ditch PayPal. I switched all of my business transactions to another platform recently. After they made that change to charge you full fees for refunding a customer that was the final straw for me!
That's a bit annoying. I have only 1 Paypal account which I use for both business and personal. At least Paypal allows you to have 2 accounts so I guess that means I'll now need to make an account for personal...
End of paypig
Is it possible to find out what type of account we have? Personal or Business? At some point they required to upgrade the account to be able to receive more than a couple of hundred bucks per month, but not sure if that's a business account.
Anyone know if this will affect cashout payments from Prolific?
Plus how was will it it affect other shopping apps/portals where PayPal is an option besides gift cards for cash out payments
I short your stock.
I eat your dog food.
Then my dog goes hungry. ☹️
but you already eat the dog food
He ate the rest.
You should also add a warning that if you "send money to friends and family", it is now processed as a cash advance. They made this change sometime late last year.
In my experience, that is true on Mastercard but not Visa. YMMV.
I'll add a link
This is why they started offering a business version of their 2% cashback credit card.
If banks keep increasing their fees, one day congress may act and set a hard cap like other EU/Canada
But that's why Canada/EU have such low credit card sign up bonuses
Hahahahahahahahahahhahahaha. Nice joke.
Sir this is America. We arrested over 0 people for GFC.