Seller told me to send as "friends and family" to avoid merchant fee, and blocked me (2024)

FAQs

Why is PayPal charging me a fee to send money to friends and family? ›

Personal payments aren't covered by PayPal Purchase Protection. You can make a personal payment to anyone in the US for free if you use your bank account or PayPal Balance. If you use a debit or credit card, there will be a small charge for your payment. Go to our Fees page for more information.

Purchase scams

If a seller is encouraging you to send a 'Friends and Family' payment when you're buying a good or service, you should refuse. You could be dealing with a scammer who knows that your payment won't be covered by our Purchase Protection if it's a 'Friends and Family' payment.

You can no longer accept friends and family payments on your Business account. However, if you'd like to receive friends and family payments, you can use or create a Personal account. If you don't use other business products with your account, you can also change your Business account to a Personal account.

No, it's not possible to initiate a chargeback for PayPal Friends and Family payments. These transactions are not covered by PayPal's Purchase Protection Program.

If you're using PayPal Friends and Family to send money within the US, you should have fees only when you pay with your card (or if you send in different currencies)¹: Paying with PayPal balance or a bank account: no fee.

Choose “Sending to a friend” for the everyday exchange of money between you and your friends and family. You can use personal payments when you send money as a gift, split a lunch bill, pay your share of living expenses, or something similar. We don't cover personal payments under PayPal Buyer Protection.

Sending Money with PayPal Friends and Family

Choose "Send & Request" from the main screen. In the "Send Money" section, enter the recipient's details: name, phone number, and email address. When prompted, select "Send money to friends and family." Enter the payment amount and optionally add a note.

You must not send money as a personal transaction (often referred to as using the “Send Money to a Friend or Family Member” feature in your PayPal account) when you are paying for goods or services.

However, you can't report a problem for payments sent as "Family and Friends". We encourage you to continue working with the recipient for a refund.

What is the difference between PayPal Goods and Services and friends and family? ›

While sending money using the 'Friends and Family' option is fee-free, this method also carries a higher risk of scams when dealing with people you don't know. Using the 'Goods and Services' option, which includes purchase protection, is safer for all commercial transactions.

You can cancel a PayPal payment including friends and family. However, you only have up until the money is claimed. After that your money is gone with a friends and family payment. If you used the business payment section then you would have to file a dispute.

To put it simply, according to the article by Moneysavingexpert.com, “A PayPal spokesperson said: "PayPal Buyer Protection does not cover money transfers between friends or family. If someone selling you goods or a service asks you to send a friends and family payment, you should refuse.”

Tax laws don't affect money sent as a Friends and Family payment. They only apply to payments that you receive for goods and services. This includes payments you receive through PayPal Checkout or were sent by the Buyer as Goods and Services payments.

If you don't have a PayPal account, you can send a one-time payment of up to 4,000.00 USD. If you have a verified PayPal account, there's no limit on the total amount of money you can send. You can send up to 60,000.00 USD in a single transaction, but we may limit that amount to 10,000.00 USD.

It's free to send to friends in the US using your PayPal balance or bank.

To stay in business, the company needs to make some form of income off of its services. To do this, PayPal charges a fee for most transactions that go through its system. And in most cases, these fees are charged to the person or company receiving the money.

If you're not a seller and your PayPal money is on hold, it could be due to several reasons: Unusual account activity: It will be uncommon if you receive a payment from a friend or family member for the first time or after a long time. In that case, PayPal will put the payment on hold for up to 21 days.