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PayPal Friends and Family vs. Goods and Services
Millions of people use PayPal every day, whether to send money to people they know or to make purchases online or in person.
But every time you make a purchase with PayPal, it asks you to choose a payment type: Friends and Family or Goods and Services. What’s the difference? What are the fees for each?
This article will help you distinguish PayPal Friends and Family vs. Goods and Services payment types. It’s important to know when to use each to avoid unnecessary risks and fees.
We'll also introduce Wise — your international money transfer alternative. Use Wise to send stress-free transfers to over 140 countries - all at the standard mid-market exchange rate.
What is PayPal Friends and Family?
When you’re sending money to someone you know personally, choose PayPal Friends and Family. It’s for paying your friends back after they buy dinner, reimbursing your roommate for your share of the rent, and similar transactions.¹
PayPal Friends and Family is for sending money to family and other people you know and trust. If you’re involved in a dispute over the money and you used PayPal Friends and Family to send it, PayPal won’t get involved with your problem.
As long as you pay with your linked bank account or PayPal Balance, there are no PayPal Friends and Family fees. If you use PayPal with a credit or debit card, there’s a 2.9% transaction fee plus a fixed fee of 0.30 USD.²
For international payments, the fees are higher even if you’re using a bank account. The same fees apply as for domestic payments, plus an additional 5% transaction fee, at a minimum of 0.99 USD up to 4.99 USD. A 4% currency conversion spread also applies.²
| Wise can help you get a better deal on currency conversion. You can convert over 40 currencies at the standard mid-market exchange rate, and we'll show you the fees upfront so you know exactly how much you're paying. |
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What is PayPal Goods and Services?
If you’re sending money to pay a business, use PayPal Goods and Services. This is the payment type you should select if you’re buying an item at an auction or an online store, paying a business from an invoice, or making some other commercial transaction.¹
When you use PayPal Goods and Services, your purchase may be protected by PayPal’s Purchase Protection policy.¹ This policy has exceptions and restrictions, but it does allow you to dispute a purchase if something goes wrong. PayPal will review the claim and might refund your purchase.³
As the buyer, you don’t have to worry about PayPal Goods and Services fees. Sending money to a business is free (unless it’s an international purchase). Just like using a credit card, the seller pays a fee, not the customer.¹
What’s the difference between PayPal Friends and Family vs. Goods and Services?
Looking for more clarity on PayPal Friends and Family vs. Goods and Services? We break it down below:
| Friends and Family | Goods and Services | |
|---|---|---|
| Payment type | For informal transactions with people you know and trust | For purchases from businesses in exchange for items or services |
| Fees |
|
|
| Protection | No protection | Eligible for PayPal Purchase Protection |
| Availability | 200+ countries, except to and from India¹ | 200+ countries |
Should I use PayPal Goods and Services or Friends and Family?
When you’re deciding on PayPal Goods and Services vs. Friends and Family, ask yourself: Do I have a personal (non-commercial) relationship with the person who’s getting my money? If the answer is yes, then use PayPal Friends and Family.
If you’re making a purchase from a business, whether buying an item or paying for a service, then use PayPal Goods and Services.
Can you use PayPal Friends and Family for payments?
PayPal Friends and Family is for payments to people you know and trust who aren’t owners of official businesses.
If you use PayPal Friends and Family and become a victim of fraud on a purchase, or you don’t receive what you paid for and want your money back, PayPal will not intervene on your behalf and refund your purchase.
Fees comparison
These are the fees for PayPal Friends and Family vs. Goods and Services.
| Friends and Family | Goods and Services | |
|---|---|---|
| Fee for domestic transactions |
|
|
| Fee for international payments | Same as domestic, plus 5% transaction fee (minimum 0.99 USD, maximum 4.99 USD), plus 4% currency conversion spread | 4% currency conversion spread |
Make fast, secure, and low-cost international transfers with Wise
A smart option if you’re sending money overseas: meet Wise.
Register a Wise account online or in the Wise app, and send money to 140+ countries, with the mid-market exchange rate and low, transparent fees.
Wise always shows you the amount you’re paying and how much your recipient will get — and you can even compare against other providers on the Wise app or desktop site.
If another service is cheaper for your particular payment, you’ll be shown — so you can’t lose.
| See how Wise compares with international bank transfers in our full guide |
|---|
Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information
PayPal Friends and Family vs. Goods and Services FAQs
We answer your questions about PayPal Friends and Family vs. Goods and Services below.
Is there buyer protection with PayPal Friends and Family?
PayPal Friends and Family payments are not eligible for PayPal’s purchase protection.
Who gets charged for PayPal Goods and Services?
Sellers are charged fees for purchases made with PayPal Goods and Services. Buyers will only pay a currency conversion spread on international transactions.
Is there a way to avoid PayPal’s Goods and Services fees?
Buyers should not pay PayPal Goods and Services fees. Sellers can avoid fees by considering alternative payment platforms, such as Wise.
Why is PayPal charging me a fee for Friends and Family?
If you’re paying a PayPal Friends and Family fee, it may be that you’re using a credit card through PayPal instead of a linked bank account. That, or there’s a currency conversion involved in your payment.
Sources
- PayPal - What’s the difference between friends and family or goods and services payments?
- PayPal - PayPal Consumer Fees
- Paypal - Purchase Protection
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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