PayPal Friends & Family Payments
Mia Sato (in June 2022):
PayPal is putting new limits on a feature in its payment system that allows people to receive money without paying extra fees, the company recently announced. Starting July 28th, only personal PayPal accounts will be able to get funds via Friends & Family, a transaction method intended for trusted recipients.
There are two ways of sending money on PayPal: Friends & Family and Goods & Services. F&F is intended for paying your friend back for dinner, for example, or giving your kid some birthday money — you know who’s receiving the funds and what you’re paying them for. There’s typically no fee involved, but it also drops protections for issues that might come up, like refunds or scams.
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With this new change, US business accounts won’t be able to accept fee-free personal payments, and people who use PayPal for their company will need to create a personal account to receive money fee-free from friends and family.
I’m not sure what to make of this because I haven’t been able to receive fee-free personal payments for a long time, probably at least a decade. When I asked about this, PayPal told me it was a consequence of having a business account. They would not let me create a second account for personal use.
Via Adam Chandler:
Paypal’s fee structure is anti-individual and clearly they only want to serve businesses. Venmo, Zelle, Apple Pay Cash and Cash App are superior and PayPal is dead to me.
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I did a full refund via PayPal but I noticed that my account was still showing negative $60. It was only when I did some digging did I realize that even though my friend received his full $2,000 back, I was still on the hook for those fees.
This happened to me, too. The sender was led to believe that, because she had chosen Friends & Family, I wouldn’t have to pay any fees. The online documentation seemed to support that view. When that turned out not to be the case, the refund didn’t recover the fees, either.
Venmo works much better, anyway, and I now see lots of local businesses using it. I’m not sure whether this is to avoid fees by falsely classifying the transactions as personal or simply because everyone seems to already have it set up and the experience is better.
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Was going to say the same thing as Rob. And also don't be surprised if changes to Venmo follow, for the same reason.
> I’m not sure what to make of this because I haven’t been able to receive fee-free personal payments for a long time, probably at least a decade. When I asked about this, PayPal told me it was a consequence of having a business account. They would not let me create a second account for personal use.
The ToS used to allow one personal, one business account per person. (This was in, like, 2003-ish that I last had a need to know this.) I thought they had changed it so you could only have one account, period, so it's weird they're now seemingly saying different.
Also weird is that you can have a debit card, which supposedly requires a business account, on a personal account.
I doubt Paypal minds if you use Venmo instead, since Paypal owns Venmo.