Paypal Goods and Services Vs Friends and Family
PayPal is a popular payment processor for businesses and individuals—but things get messy when you mix the 2.
Here's everything you need to know about PayPal friends and family unit transfers (and a few friendly warnings every bit well).
Annotation: The following applies to Personal PayPal accounts. If you lot have a PayPal Business account, friends and family unit payments may not exist available to you.
What is PayPal friends and family unit?
When y'all transport or request money through your personal PayPal account, you can choose whether information technology'due south a "Friends and Family" payment or a "Goods and Services" payment.
Friends and Family payments are often used to pay back a friend, evangelize money to family members abroad or send digital gift cards.
How practise I use PayPal friends and family unit?
In order to send money using PayPal friends and family, both you and the recipient need to take a PayPal business relationship (you can fix one up for complimentary ).
Sending money with PayPal friends and family only takes a few steps:
- Login to your PayPal business relationship.
- Click Send & Request .
- Under Send coin, Enter telephone number, email or contact name .
- When prompted, select Sending to a friend .
- Enter payment corporeality, add together a note (optional) and Submit .
Note: PayPal friends and family may non exist available in some countries.
You tin likewise ship friends and family payments using the PayPal app or PayPal.Me . The process is pretty similar on the app—you only enter the payment amount before selecting whether or not it'due south a friends and family payment.
How much does it cost to utilise?
Friends and Family payments can be made to anyone in the U.South. for free (from your bank account or PayPal).
If you are sending coin internationally, you may be charged a transaction fee equal to 5% of the send amount (upwards to $four.99 USD).
When you pay with a debit or credit menu, yous'll be charged a pocket-sized processing fee—for both domestic and international transactions. Currently the rate is two.9% + a stock-still fee ( varies by currency ; $0.30 in the U.S.).
Can you become scammed on PayPal friends and family?
Unfortunately, yes.
Only you tin ever count on Michael Scott to get you lot out of a jam
Here'southward a expert rule: If they're not your friends and family in existent life, they shouldn't be your friends and family unit on PayPal.
Occasionally, sellers will request that you make a purchase using PayPal friends and family rather than the traditional Goods and services payment. This tin can be a convincing argument every bit there is no fee required, significant they may offer you lot a discounted rate.
Don't take the bait.
In fact, using PayPal friends and family for business purchases is explicitly against their User Agreement :
"You must not use the "send money to a friend or family member" feature in your PayPal account when y'all are paying for goods or services."
Business organization owners know this too equally should never ask you to pay in this style. Take it as a crimson flag and just pay the appurtenances and services fee.
As one user commented "3% is a pocket-size price to pay for peace of mind"
Does PayPal reimburse fraudulent payment requests?
While PayPal does protect confronting "Goods and Services" scams, Paypal does non reimburse "payments sent using PayPal's friends and family unit functionality."
Thus, the following information merely applies to goods and services payments fabricated from personal PayPal accounts.
Items and services payments are protected by PayPal Purchase Protection . Here's what that means:
- Your total financial information is not shared with sellers
- Transactions are encrypted and monitored 24/7
- All global transactions are covered
For Buyers
Co-ordinate to PayPal'due south policy, you're protected if:
- Yous're charged for something you didn't buy
- Your society never arrives
- Your order arrives, but information technology'south unlike than described
If any of these things happen to you, PayPal guarantees to reimburse the total cost of the purchase plus any shipping costs (just brand sure you lot report the trouble inside 60 days of the transaction date).
PayPal asks that you work with the seller first, but if they decline to hitting the "Upshot a Refund" button, you tin can open a dispute in the Resolution Middle.
For Sellers
For Sellers, the protection guarantees are pretty similar. Particularly, PayPal covers against ii types of buyer complaints:
- "Unauthorized Transaction"
- "Item not received"
All the same, in order for Sellers to exist protected by PayPal they need to have proof of commitment or shipment and be upfront with all the details. Learn more here .
Are there any alternatives to PayPal friends and family?
For business transactions, pretty much whatsoever business alternative is improve than PayPal friends and family—Square, Stripe, even PayPal Business.
In full general, payment processors that are designed for ownership and selling goods e'er beget amend security—and they tend to take pretty off-white rates. For instance, ZipBooks free invoicing allows digital payments for businesses, so you have better security and get paid faster.
If you lot are actually transferring money betwixt friends and family, PayPal is just one option. There are tons of great peer-to-peer payment apps out there. My go-to is Venmo, but I'll let you compare for yourself.
About Tim
Tim is Founder and CEO of ZipBooks. He keeps his desk actually nice and slap-up.
Source: https://zipbooks.com/blog/paypal-friends-and-family/
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