Why can my Business account no longer receive friends and family payments?

As of July 28, 2022, US Business accounts can no longer receive friends and family payments from US senders. This change was made for the following reasons:

• To ensure that all eligible purchases are protected for both buyers and sellers by PayPal’s Purchase Protection, guarding against fraud and other things that can go wrong with purchases.
• To help businesses properly track commercial income for reporting and tax compliance purposes.
• To decrease buyer confusion between goods and services, and friends and family payment types.   

Can Business accounts still send friends and family payments?

Yes, Business accounts can still send friends and family payments, just not to other business accounts.  

I have a Business account. How can I accept friends and family payments?

You can no longer accept friends and family payments on your Business account. However, if you’d like to receive friends and family payments, you can use or create a Personal account. If you don’t use other business products with your account, you can also change your Business account to a Personal account. Personal accounts will also let you take advantage of services designed specifically for your personal needs.  

To downgrade your Business account, you may click Contact at the bottom of any PayPal page.  

What’s protected with Purchase Protection?

Seller Protection guards sellers from losing money to claims and chargebacks and protects two types of buyer complaints for eligible purchases:

• Unauthorized Transaction: There is a transaction, but the accountholder claims they did not authorize payment. 
• Item Not Received: A buyer pays for an item but claims they did not receive it.  

Purchase Protection protects buyers from losing money on purchases that don’t go as planned and covers these issues:

• Item not received by buyer.
• Item is received, but is significantly different than expected. 
• Item is received, but is broken.
• Item is received, but in different quantity than purchased.  

You can learn more about Purchase Protection here.  

I want to keep receiving personal payments, so I’m planning on opening a new Personal account. Can I use the same cards, bank account, and other info?

You can use all of the same bank accounts, cards, and information on your new account. However, you’ll need to use a different email address to create the account. We apologize for any inconvenience this may present.  

Do I have to pay taxes on goods and services payments?

It depends. If you receive $600 or more in goods and services payments in a year, it’s considered taxable income that must be reported to the IRS, whether it’s on PayPal or another platform. PayPal has your back for this. We’ll be keeping track for you behind the scenes and will give you a 1099K if you require one.

Please keep in mind that friends and family payments aren’t subject to this rule.