PSA: PayPal Personal Accounts, F/F Payments and Fees

[notfast]

Originally Posted by MooseDog

PSA = Public Service Announcement

Am posting this for the benefit of those who many not have encountered this situation yet.

Seems that PayPal has added a "feature" to Personal Accounts (previously you could not take a credit card payment without converting to a "Business" account) whereby you can now do so but it triggers fees. In the past I could take payment to this account, but if someone used a credit card to fund the payment I got a message saying that if I wanted to claim the money I had to convert to a Business account. I never did convert this account, but one day I got a payment from someone and fees had been deducted.

But it appears that now any transaction that appears to be for good and services is now flagged and fees are charged. One trigger seems to be the Notes field, and now they've added a layer to the payment process that defaults to Goods and Services.

It happened again and I found the common thread was that each person had put their address in the "Notes" field on PayPal.

Then recently another sent a payment and said that the F/F option wasn't available. Again, fees were charged against the payment. Interestingly, no Sales Tax was recorded (the other party and I both live in an "internet Tax" state).

So I checked my account info and the option to "Upgrade to a Business Account" is still there and I don't have the bells and whistles available to my separate "Business" account. Then, I started a payment process and I noticed that they had changed the process and added a screen whereby you can specify "Sending to a Friend" or "Goods and Services". In place there is a default option which of course is "Goods and Services". If you just click through fast like you used to you're probably going to miss this.

I'm going to go back and actually read the "We've changed the terms of services" emails but I'm sure they changed the game at some point.

So when you reach this screen when sending a payment via F/F to someone, be sure to do two things:

1) Leave the Notes field completely blank
2) Click on the Change option and then select "Sending to a Friend"

EDIT: I also see you can generate shipping labels in this Personal Account. I would hesitate to do that on a F/F payment as I'm pretty sure that would get flagged as well, but have not tried this as yet.

I’ve read this multiple times and I’m still confused.

If you use a credit card to pay via friends and family, you pay a fee as the buyer/sender.

Goods does not charge a fee to send but the seller will pay ~3%, no matter if you pay via balance, bank account or credit card.

I’ve had a personal paypal account for 10+ years and I’ve never had to “claim” money.

[MooseDog]

I've had a personal account since PayPal started, as well as a Business account. The personal account, at first, you could not take a payment funded with a credit card, period. A few years ago, I believe, there was an option to accept the payment and pay a fee, but you had a choice.

That choice is now gone. If someone pays you with Goods and Services and not F/F then PayPal just deducts the fee, no option to decline.

And now, the new screen defaults all payments to G & S unless you click the Change button and change to F/F.

I'm just putting this out there as 3 people in the past week have paid me thinking they were sending F/F and had no idea they were sending as G &S.

Originally Posted by notfast

I’ve read this multiple times and I’m still confused.

If you use a credit card to pay via friends and family, you pay a fee as the buyer/sender.

Goods does not charge a fee to send but the seller will pay ~3%, no matter if you pay via balance, bank account or credit card.

I’ve had a personal paypal account for 10+ years and I’ve never had to “claim” money.

[notfast]

Originally Posted by MooseDog

I've had a personal account since PayPal started, as well as a Business account. The personal account, at first, you could not take a payment funded with a credit card, period. A few years ago, I believe, there was an option to accept the payment and pay a fee, but you had a choice.

That choice is now gone. If someone pays you with Goods and Services and not F/F then PayPal just deducts the fee, no option to decline.

And now, the new screen defaults all payments to G & S unless you click the Change button and change to F/F.

I'm just putting this out there as 3 people in the past week have paid me thinking they were sending F/F and had no idea they were sending as G &S.

There was a period of time (5+ years ago?) where what you are saying is true about receiving a credit card payment but that hasn’t been the case for years. You used to have to have a “premier” personal account to receive credit card payments. Quick search shows comments about that not being the case as far back as 2012 on PayPal’s own website.

Maybe you have some sort of grandfathered paypal account that has never been updated?

I’ve literally never had the option to accept or decline a payment since the early days of Paypal....like the early 2000’s.

I still don’t get defaulted into a G&S transaction either. It all depends on previous history with the seller. If you have done no prior transactions, it will default to goods and services.

[Jacklitsch]

Very important thread. Should be a sticky.

[Eric72]

So far as I know, there's only one way to send money without buyer or seller incurring a fee:

If I send F&F - AND - fund the transaction with my bank account, neither me nor the recipient pay a fee. I send (for example) $100, recipient gets $100, my bank account balance goes down $100.

Your mileage may vary. This is just what I experience with my account. Important note: I only use this method for real-life friends & family payments, the way PayPal likely intended, not for Internet purchases.

[Seven]

Good to know. Most of the time I left the notes blank anyway, because I would send my address in something like a PM or email.

[Throttlesteer]

Didn't you guys know, T206, E92, E90-1, T3, etc are all class designations for your friends and family going to school. My kid is enrolled in E101 this semester