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Why can I no longer send friends and family payments to Business accounts?

As of July 28, 2022, US Business accounts can no longer receive friends and family payments from US senders. This change was made for the following reasons:

  • To ensure that all eligible purchases are protected for both buyers and sellers by PayPal’s Purchase Protection, guarding against fraud and other things that can go wrong with purchases.
  • To help businesses properly track commercial income for reporting and tax compliance purposes.
  • To decrease buyer confusion between goods and services, and friends and family payment types.   

What’s the difference between friends and family payments and goods and services payments?

Goods and services payments are intended for commercial payments, for example, when you’re buying or selling art online, or paying your hairstylist. Eligible goods and services payments include Purchase Protection, which can protect the buyer and seller in case something goes wrong with a purchase, and includes a small fee paid by the seller. You should select this payment type when you’re paying a business, and if the person you’re paying has a Business account, it’ll be automatically selected.    

Friends and family payments are personal payments between two individuals for something like splitting a dinner bill. These payments can be made without fees for the sender and receiver.   

Can personal accounts still receive friends and family payments?

Yes, Personal accounts can still receive friends and family payments for personal purposes.  

Why should I use PayPal for peer-to-peer payments?

PayPal enables quick, easy, and secure payments between individuals and businesses almost anywhere in the world, whether you’re across the table or in another country. It’s easy to find and pay the party you need to pay with PayPal’s large, global footprint. You can trust your payment is safe with PayPal’s encrypted and secure technology, and because you don’t have to share your financial details when making payments. PayPal also provides more options for the money you receive. You can use your balance to shop online or in-store, invest, pay someone else, or you can transfer it quickly to your bank account.  

Plus, as a Business, PayPal provides eligible goods and services payments with Purchase Protection which guards you and your sellers in case something goes wrong with a purchase. In addition, PayPal allows you to collect payments quickly from your customers, and using their preferred method of payment: Credit or Debit Cards, Bank, or PayPal balance.  

What’s protected with Purchase Protection?

Purchase Protection protects buyers from losing money on purchases that don’t go as planned and covers these issues:

  • Item not received by buyer.
  • Item is received, but is significantly different than expected. 
  • Item is received, but is broken.
  • Item is received, but in different quantity than purchased.  

You can learn more about Purchase Protection here.  

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