Paypal has quietly started charging for sending Paypal to Paypal Friends and Family transactions. While it still says on the Paypal site, in at least two different places, that “It’s always free to send money to friends and family when you use your PayPal balance or bank account,” as you can clearly see from the screen shot below, that is suddenly not true, at least for certain transactions.
“It’s always free to send money to friends and family when you use your PayPal balance or bank account. Fees apply only if the sender uses a credit or debit card, or if you receive any payment for goods or services,” says Paypal here.
And at the Paypal fees page Paypal reiterates that “Sending money to friends and family is free for you and the recipient in the US when you fund the transfer with your bank account or PayPal balance. You can also use a debit or credit card or make an international transfer for a small fee. The credit cards charge us a little so we charge you a little for the convenience.”
But, this is clearly not the case, as here is the direct evidence of Paypal charging for a Friends and Family transaction that took place on July 16, 2014 (the date of the writing of this article):
Now, it’s only a dollar. And before you hit send you have the option to change it from you paying the fee:
….to the recipient paying the fee:
But we have to wonder why, and why no notice, and why the Paypal site still says that it is always free, when clearly it isn’t.
We have pored over the Paypal site trying to find information about this, but so far have not been able to find anything.
We have also done some experimenting, and it seems that the fee to send from your Paypal account to a friend or family member’s Paypal account is only tacked on when the person to whom you are sending it has a merchant account. As our accounts are all merchant accounts as well, it may even be a “merchant to merchant” thing, but as Paypal’s definition of “merchant” is based at least in part on how much money goes through your account, it is easy to see how you could be a Paypal “merchant”, and want to send money to a friend or family member who is also a Paypal “merchant”, and get hit up for the fee.
So, what gives? Do they need the money to satisfy shareholders? While it’s only a dollar here and a dollar there for the average Paypal user, we have to imagine that it’s 10s or 100s of thousands of dollars every day to Paypal.
Regardless, we think it’s pretty shoddy to start doing this without sending out a notice. Or at least providing an explanation when you are hit with the fee.
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