OT: PayPal F/F
 

Effective July 28, 2022:

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.
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.

https://www.paypal.com/us/webapps/mp...-policies-full

Not an especially huge surprise. I would suspect that since the lowered 1099 reporting threshold took effect as of 1/1/2022 that Paypal began experiencing noticeable changes to the volume of their Goods & Services use versus their Friends & Family use. And since the Friends & Family use does not incur a fee, that most likely means Paypal is making less money because of all this, at least in the U.S. marketplace.

Paypal likely did not have to worry about this in the past with the relatively small percentage fee they charged for business use of their service, but now with the potential additional costs to U.S. sellers from income taxes (and possibly self-employment taxes as well), I can see and understand a lot of smaller sellers would be looking to get out from under this 1099 reporting requirement by switching to receipt of payments through Paypal's Friend & Family option, and may even be offering customers discounts if they agree to use F&F rather than Paypal's Goods & Services.

This new, lowered 1099 reporting threshold is certainly not doing Paypal, or other similar such third-party payment networks, any favors. Not only does it cause additional work and potential liabilities for them because of all the 1099s they have to prepare and send out/file, it also causes many of the people/businesses using their service to start looking for alternative ways to still do business, but get out of having their sales reported for income tax purposes. And for services like Paypal that offer a non-1099 reporting option like Friends & Family, that presented a real easy loophole for those people/businesses looking to get around the reporting requirement. Closing this loophole to Paypal business account users now may not have the positive effect Paypal is likely hoping to achieve in regard to its earnings though.

Instead, it may end up pushing more and more people and businesses to looking at other possible alternatives to Paypal to escape the 1099 tax reporting requirement entirely. This is probably going to be a big boost for Zelle, which is not required to report any transaction activity for 1099 purposes. This is not the first time, nor will it be the last, that changes to tax laws and reporting requirements will potentially have a dramatic effect on certain types of businesses out there. So many people and businesses currently use and are comfortable with Paypal, so it isn't likely going anywhere. But it is probably still affecting Paypal in ways that Paypal wishes it wasn't.