Sending Money as Friends and Family to a Business
PayPal is a popular payment processor for businesses and individuals—but things get messy when you mix the two.
Here's everything you need to know nearly PayPal friends and family unit transfers (and a few friendly warnings as well).
Note: The following applies to Personal PayPal accounts. If you have a PayPal Business organisation account, friends and family payments may not be bachelor to you.
What is PayPal friends and family?
When you transport or request money through your personal PayPal account, you tin choose whether it's a "Friends and Family" payment or a "Appurtenances and Services" payment.
Friends and Family unit payments are ofttimes used to pay back a friend, evangelize money to family members abroad or ship digital gift cards.
How do I apply PayPal friends and family unit?
In order to ship money using PayPal friends and family, both you and the recipient need to have a PayPal business relationship (you can set one up for free ).
Sending money with PayPal friends and family only takes a few steps:
- Login to your PayPal account.
- Click Send & Request .
- Under Ship money, Enter phone number, e-mail or contact name .
- When prompted, select Sending to a friend .
- Enter payment amount, add together a note (optional) and Submit .
Annotation: PayPal friends and family unit may not be available in some countries.
Y'all tin as well send friends and family payments using the PayPal app or PayPal.Me . The process is pretty like on the app—you lot just enter the payment corporeality before selecting whether or non it's a friends and family payment.
How much does information technology cost to apply?
Friends and Family unit payments can be made to anyone in the U.Due south. for free (from your depository financial institution account or PayPal).
If you are sending coin internationally, yous may exist charged a transaction fee equal to 5% of the send amount (upwardly to $iv.99 USD).
When you pay with a debit or credit card, yous'll be charged a small processing fee—for both domestic and international transactions. Currently the rate is ii.9% + a fixed fee ( varies by currency ; $0.30 in the U.S.).
Tin you get scammed on PayPal friends and family?
Unfortunately, yes.
But y'all can always count on Michael Scott to go you lot out of a jam
Here'due south a expert rule: If they're non your friends and family in real life, they shouldn't be your friends and family unit on PayPal.
Occasionally, sellers will asking that you lot brand a purchase using PayPal friends and family unit rather than the traditional Appurtenances and services payment. This can exist a convincing argument as in that location is no fee required, significant they may offer yous a discounted charge per unit.
Don't take the bait.
In fact, using PayPal friends and family unit for business purchases is explicitly confronting their User Agreement :
"Yous must not apply the "ship money to a friend or family unit member" feature in your PayPal business relationship when yous are paying for goods or services."
Business owners know this as well as should never inquire you to pay in this way. Accept information technology as a red flag and just pay the goods and services fee.
As one user commented "3% is a small price to pay for peace of mind"
Does PayPal reimburse fraudulent payment requests?
While PayPal does protect against "Goods and Services" scams, Paypal does not reimburse "payments sent using PayPal's friends and family functionality."
Thus, the following information merely applies to appurtenances and services payments fabricated from personal PayPal accounts.
Items and services payments are protected by PayPal Buy Protection . Here's what that means:
- Your full financial information is not shared with sellers
- Transactions are encrypted and monitored 24/7
- All global transactions are covered
For Buyers
According to PayPal's policy, you're protected if:
- You're charged for something y'all didn't purchase
- Your club never arrives
- Your gild arrives, but information technology'southward different than described
If any of these things happen to you, PayPal guarantees to reimburse the full toll of the buy plus whatsoever aircraft costs (merely brand sure y'all report the problem inside sixty days of the transaction date).
PayPal asks that you work with the seller start, but if they refuse to striking the "Issue a Refund" push, you lot tin open a dispute in the Resolution Heart.
For Sellers
For Sellers, the protection guarantees are pretty similar. Specially, PayPal covers against two types of buyer complaints:
- "Unauthorized Transaction"
- "Item not received"
However, in society for Sellers to be protected by PayPal they need to have proof of delivery or shipment and be upfront with all the details. Larn more than hither .
Are there any alternatives to PayPal friends and family?
For business transactions, pretty much any business alternative is better than PayPal friends and family—Square, Stripe, even PayPal Business.
In general, payment processors that are designed for buying and selling goods always beget ameliorate security—and they tend to have pretty off-white rates. For example, ZipBooks free invoicing allows digital payments for businesses, so you lot accept better security and get paid faster.
If you are actually transferring money between friends and family, PayPal is just i option. There are tons of great peer-to-peer payment apps out there. My go-to is Venmo, merely I'll let y'all compare for yourself.
Well-nigh Tim
Tim is Founder and CEO of ZipBooks. He keeps his desk really nice and neat.
Source: https://zipbooks.com/blog/paypal-friends-and-family/#:~:text=%E2%80%9CYou%20must%20not%20use%20the,the%20goods%20and%20services%20fee.
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