How to send Friends and Family on PayPal? Using PayPal Friends and Family doesn’t require PayPal users to change how they interact with the payment platform.
When preparing to send money to friends or family, PayPal asks the user to choose the purpose of the transaction, either “Sending to a friend” or “Paying for an item or service,” and the selection made determines whether the PayPal F&F option is used or not.
Based on that, the payment solution will automatically adjust the transaction to correspond to the correct transfer protocols.
How to send Friends and Family on PayPal?
If you haven’t heard of PayPal by now, one would be forgiven for thinking you live under a rock. To bring you up to speed, it is a very reliable method for sending money to anyone, including those close to you. This is why it is only fitting that you know how to send money on PayPal to friends and family.
PayPal was established in 1998 and has grown to become the fifth most acceptable payment option available in the world. Their rise in popularity is shown by data compiled by Statista which shows the increase in the volume of payment that PayPal has handled from 2012 to 2020.
They weren’t simply handed this distinction but earned it thanks to their excellent track record of offering a safe and reliable service that millions of people now rely on.
PayPal Friends and Family limits
If your account on PayPal has been verified already, then you only have a limit per transaction, which can go up to $60,000 but may be limited to $10,000.² PayPal doesn’t place a limit on the total amount of money, or the number of transactions, that can be sent using the PayPal Friends and Family service on a daily, weekly or monthly basis.
This means that for transactions within the US, it’s possible to send two $10,000 transactions to the same recipient in a single day. However, this implies that the sender has a verified PayPal account.
Sending money to international recipients will have different limitations, which depend on the destination country and the status of the recipient account (verified or unverified) on PayPal.
In case you don’t have a PayPal account, you’re able to do a one-time transfer of up to $4,000².
PayPal Friends and Family vs PayPal Goods and Services
PayPal Friends and Family
PayPal Friends and Family is PayPal’s option for sending money or gift cards for all non-commercial activity between friends and family.
Nonetheless, to pay for goods or services, it’s not the best option. It could lead to the loss of money and/or goods. Just before you pay to finish the payment, you can choose whether to pay it or to change the payment to a Goods and Services payment, therefore passing the fee onto the recipient.
PayPal Goods and Services
The Goods and Services option is used to buy services or items, and includes payment protection from PayPal. It charges the seller a fee to receive your money, and therefore the payments are automatically covered by PayPal protection policy in case anything goes wrong.
In theory, only commercial transactions will be reported to the IRS, so this shouldn’t happen with Friends and Family operations. However, as a payments’ processor, PayPal monitors all of its transactions in order to comply with government financial regulations, and it has the ability to determine if users are taking advantage of the PayPal Friends and Family option to circumvent required tax reporting obligations.
For buying goods and services, PayPal reports transactions from sellers who receive more than $20,000 in gross payments and more than 200 separate payments within the tax year
Is it possible to get scammed with PayPal Friends and Family?
Yes. As with any other payment processor, or anything else dealing with sending or receiving money, it is always important to be hyper-vigilant with the details when using PayPal Friends and Family.
The service is safe, but there might be someone willing to try to take advantage of others. Learning to recognize and avoid them will make transactions with PayPal safer and more pleasant.
Sellers might ask consumers to choose the personal payment option when making a purchase online. This is because of the absence of fees, as well as the possibility of circumventing tax reporting guidelines. Apart from being in violation of PayPal’s Terms and Conditions, in such cases the seller might try to scam buyers too.
Does PayPal refund payment request frauds?
PayPal Friends and Family transactions aren’t inherently protected by PayPal (the option has to be chosen when sending money), therefore buyers do not have any recourse if something goes wrong when purchasing something using the PayPal F&F option.
PayPal’s Purchase Protection keeps most financial information private and prevents it from being shared with sellers.
All transactions are encrypted and monitored, and are covered under this protection, regardless of the origin and destination of the goods being purchased. This protection is not a basic component of PayPal F&F transactions, which means that unless you are sending to a verified and legitimate friend or family member, you won’t be covered if something goes wrong.
PayPal F&F is meant to be used for the user’s family and friends – not the family and friends of other PayPal users. There can be cases where a user makes contact with someone and asks that they use the PayPal Friends and Family option and request an item being purchased be sent to “a friend” at a different address as a gift.
However, the buyer can submit a claim to PayPal saying that the item was never received, and a refund can be provided.
How Much Does PayPal Friends and Family Cost?
In many cases, it is possible to avoid paying PayPal fees while sending money with PayPal Friends and Family. If you send a domestic payment using either your PayPal balance, a bank account or an Amex Send™ account, there are no fees for the sender or the recipient.
However, if you send a domestic payment using a card, you will have to pay 2.9% plus a fixed fee based on the recipient’s currency. For example, the fixed fee for U.S. Dollars is 30 cents per transaction.
Sending international payments with PayPal Friends and Family has a 5% fee for every payment method. However, it won’t cost less than 99 cents or more than $4.99. If you use a card, you will also have to pay the 2.9% plus the fixed fee. In addition, you may need to pay a conversion fee if fees are charged in a currency other than the currency you use to send payments.
PayPal Friends and Family vs. PayPal Goods and Services
While PayPal Friends and Family is for sending and receiving personal payments, PayPal Goods and Services is for sending and receiving business payments. For example, you can use PayPal Goods and Services to buy a physical or digital item or pay for a service.
Since PayPal Goods and Services is used for business, it will include PayPal Purchase Protection or PayPal Seller Protection. However, it will also include more fees for the recipient, or the seller in this case.
While buying with PayPal Goods and Services is free for buyers — unless you need to convert currencies — seller fees may cost somewhere between 1.9% and 3.49% plus a fixed fee for domestic payments, depending on the payment method. For example, PayPal Invoicing and Pay with Venmo will have a 3.49% fee in addition to a fixed fee, while standard credit and debit card payments will have a 2.99% fee and a fixed fee.
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