The potential hazards of using the Friends and Family are PayPal friends and family!

PayPal friends and family, as merchants and creators, should never agree to have their brand partners pay those using PayPal friends and family option.  You should say “no” if the vendor of an item or service requests that you pay them using friends and family transfer. You are a “seller” under PayPal’s terms of service if, as a creator, you accept payments from brand partners in exchange for your content or services. The creator’s business is extremely vulnerable if it accepts payments through the “friends and family” option.

PayPal Fees associated with friends and family:

Use “Sending to Friends and Family” when sending cash or a gift card to a close friend or relative. You can cover the cost yourself or pass it on to the recipient so they can take advantage of PayPal Purchase Protection before completing a purchase. It is free to send money to any U.S. recipient from any U.S. bank account. “Seller fees” can refer to a variety of different situations, including both products and services.

For example, “payment” can be used while purchasing something from a vendor or “payment” can be used when receiving a service from a vendor. It costs the vendor some money to process your payment. We have automatically enrolled you in our protection plan to cover your payment—transaction fees for sending money to friends and family versus selling something on PayPal.

Donations to Relatives and Close Associates:

Sending cash as a present or repaying friends/family for ad hoc personal expenses are examples of situations where the friends and family payout technique would be appropriate. (Sharing meals, splitting lodging fees, etc.) Payment processing fee of 2.9% for credit/debit card purchases If the sender pays using a credit or debit card, they will be assessed a 2.9% fee, which they can choose to absorb or pass on to the receiver of their “friends and family” money transfer.

PayPal friends and family artists who are “sellers” on PayPal:

When you charge a brand for your services as an influencer, content producer, or freelancer, you play the role of a “seller” who provides a “product or service” to a “buyer” who is the brand. You are engaging in a commercial transaction when working with brands for compensation. A brand partner may offer to compensate a creative through the “PayPal friends and family “option rather than the “goods and services” option for one straightforward reason.

PayPal friends and family Creators:

By PayPal’s fee policy, the creator would be responsible for the 2.9% +30 cents per transaction seller fee if the brand chose to pay the creator through the conforming “goods and services” option. If a company wants to avoid paying these fees on behalf of a creator, or if a creator wants to avoid paying them, the company may suggest transmitting the money through “friends and family” instead. Because they are Sellers, Creators who break PayPal’s rules must bear the consequences.

Under “Restricted Activities -section At.” of the PayPal User Agreement, using PayPal Friends & Family for business purposes is forbidden. Suppose a company wants to pay a creator for their work, but they don’t comply with PayPal’s terms of service. In that case, the company can offer to use PayPal friends and family” payout option instead. The “seller,” in this case, the creator would be held liable for any violations that occurred during the process of accepting payment.

Possible Account Suspension or Deactivation:

If the PayPal Enforcement Division suspects that you use the “friends and family” payment option to make sales, they may freeze or terminate your account. The account in question will be locked until PayPal’s investigation into a suspected violation of the Terms of Service is complete. PayPal may take months or even years to decide on a case, during which time you may be locked out of your account and unable to access your cash even if you are not blocked once the investigation is complete.

PayPal friends and family Limits per day:

Currently, the daily withdrawal limit for sellers using PayPal is $60,000. The maximum amount for any single transaction is $10,000. If a creator receives a payment from a brand partner greater than this threshold, their account may be frozen until further review. If you accept payments from friends and relatives, PayPal does not provide dispute protection or resolution services if something goes wrong with the transaction.

PayPal is discontinuing PayPal friends and family payment feature:

The online payment service PayPal has stated that it will be instituting additional restrictions on its fee-free money-receiving feature. Friends & Family is a PayPal feature that allows you to send money to people you know and trust, but as of July 28th, only personal accounts will be allowed to receive payments this way. In PayPal, you can choose between the “Friends & Family” or “Goods & Services” option when sending money.

Use PayPal friends and family:

You and the person you’re sending money to must each have a PayPal account to send and receive payments through the service (you can set one up for free). The PayPal mobile app and the PayPal Me website allow you to send money to loved ones. When using the app, the procedure is essentially the same; after entering the payment amount, you can choose whether or not it is a payment to friends and family:

PayPal friends and family Cost to use:

You can send money to your friends and family in the United States without incurring fees (from your bank account or PayPal). International money transfers may incur a transaction fee of up to 5% of the total sent (or USD 4.99). Payment processing fees apply to both domestic and international credit card and debit card purchases. Rates are currently 2.9% plus a flat fee (which fluctuates by country but is currently about $0.30 in the U.S.).

Scammed on PayPal friends and family:

A solid rule of thumb is that you shouldn’t add people as PayPal pals if you wouldn’t consider them to be relatives or close friends in real life. Rather than the standard Goods and Services payment method, some vendors prefer PayPal Friends and Family. Considering there is no cost to them, they may be willing to give you a better deal because of this. Please do not fall for their ploy. Indeed, PayPal expressly forbids using the “transfer money to a friend or family member”.

PayPal reimburses fraudulent payment requests:

While “PayPal protects goods and Services” transactions, “payments sent utilizing PayPal friends and family capability” are not. For this reason, the following details only apply to purchases made with a personal PayPal account. PayPal offers Buyer Protection for purchases of goods and services. That means that when you make a purchase, vendors won’t see your complete credit report.


By the end of July, PayPal will no longer allow business accounts in the United States to receive fee-free PayPal friends and family payments. Account holders must set up a separate personal account when using it for professional reasons to make fee-free business transactions. The first type, personal payments, do not incur fees but also do not provide any security against scammers. At the same time, Business Payments for Goods and Services is a paid service with added security that comes at an additional cost.


Where do PayPal and PayPal friends and family diverge?

A “Friends and Family” payment is one in which the recipient is a friend or family member, whereas a “Goods and Services” payment is one in which the sender purchases a good or service.

Is sending money to close friends and family still free on PayPal?

For US-based businesses, this means setting up a separate personal account if they want to continue accepting payments from friends and family without incurring fees.

How much money can I give to my loved ones through PayPal?

Dole out cash to loved ones. Limits: If you offer your bank account information or other identifying information, you can transfer up to $60,000. You can only send up to $10,000 in a PayPal transaction if you don’t.

How do I avoid PayPal fees friends and family?

Choose the “Family and Friends” payment option to have them pay you directly, or use another service to send them an invoice.

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