PayPal Just Made Key Changes To Their Policy: Here's What You Should Know


PayPal has become one of the most popular online payment systems for making monetary transactions safe and easy.

It is used by countless everyday people. However, it has probably proven most beneficial to entrepreneurs, and those who tend to make a lot of financial transactions via the internet for whatever reason. 

If you currently use PayPal, you may want to check out their new policy changes. 

PayPal has recently updated their policy and the changes may or may not affect you but are still very important things you should know.

The average person rarely reads company policies, which is why most of us have ended up in situations where we could have easily avoided all the headaches and hassle typically associated with speaking to customer service reps, if only we had read the fine print.

The fine print is the most important yet most overlooked read ever, right after “Watch Your Step” of course, kidding. But seriously, if you have a PayPal account you have more than likely received an email informing you that changes have been made to the company's policy. So, instead of overlooking the email, take time to at least skim through the changes. The changes will definitely affect some entrepreneurs who use PayPal for their business transactions, and people who may use PayPal to pay recurring bills. You can read the full policy update here.

Here are some of the updated highlights listed via (for those who still won’t actually go and read through the policy):

We’re no longer going to offer the Pay After Delivery product so we are removing terms related to that product from the user agreement. 

We’re clarifying that when purchasing or sending money, we may require a backup payment method for your transaction(s) to be used if the selected payment method is declined, expired or otherwise unavailable.

We’re updating the list of items not eligible for our Purchase Protection Program, so that payments sent using PayPal to any bill payment service are not eligible for the program. 

We’re updating the additional requirements for coverage of Unauthorized Transactions for sellers under our Seller Protection program to require that the payment must have been made in connection with a transaction where the buyer logged into their PayPal account to complete the transaction in order for sellers to be covered under the program. 

We’re including references to Venmo in the Presentation of  PayPal clause for sellers as well as clarifying your obligations to present PayPal and Venmo on par with other payment methods.

We’re adding terms that apply to marketplace sellers.  If you sell on a marketplace and accept payment through your PayPal account, a hold may be placed on a payment sent to you at the instruction of the marketplace. 

For business accounts, we are changing the fee charged for our faster withdrawal option to an eligible debit card linked to your PayPal account to 1% of the transferred amount.

We’re removing the variable rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States when you send money using PayPal balance or your bank account and introducing a new flat fee of $2.99 or $4.99 per transaction depending on the recipient’s country.  However, when you send money using your credit card, debit card, or PayPal credit you will be charged the new flat fee per transaction depending on the recipient’s country + 2.9% of the transaction amount + a fixed fee based on the currency.

We’re changing the balance functionality for your PayPal account depending on whether we have been able to verify identifying information that you provide to us. 

If we have not verified your identifying information, a balance in your PayPal account can generally only be held in your PayPal account and transferred to a linked bank account or debit card.

If we have verified your identifying information, a balance in your PayPal account can be held in your PayPal account, transferred to a linked bank account or debit card, used to make purchases or send money to others. 

Restrictions and limitations on such accounts may be lifted upon validation of the user’s identity by PayPal.

We’re clarifying how we calculate transaction exchange rates where we perform a currency conversion.

Clarifying that Sellers have certain obligations under applicable law around how they collect, store and protect user data of customers in Europe.

We’re updating the user agreement to enable you to seek public injunctive relief in court instead of arbitration, if a court decides that you have a right to pursue that type of relief and it is not available in arbitration under the terms of the user agreement’s arbitration provision.

Amendments to the PayPal Privacy Policy

At PayPal, it is important to us that you understand our privacy practices and your privacy choices. That’s why we updated and streamlined this information in the updated PayPal Privacy Policy, which includes a Consumer Privacy Notice, to clarify the information we collect, how we protect it, use it and the choices and controls you have across various PayPal services.  The updated Privacy Policy will replace the existing Privacy Policy for PayPal Services. 

We will continue to keep your information secure, and we will never share, sell or rent your personal data with third parties for the third parties’ own purposes without your consent.  A few notable updates include:

Expanded Scope: We’ve combined our privacy practices for PayPal and Xoom services, websites and applications into one Privacy Policy.

More Detailed Explanations: We’ve included more details about important features of our services and when you connect your PayPal account to third-party websites and platforms. 

Customized Experiences: We clarified how we may provide you with customized experiences on PayPal properties.  We also explain how you can choose to limit the use of your information.

Amendments to the PayPal Here Agreement and the PayPal Website Payments Pro and Virtual Terminal Agreements

We added a section to the PayPal Here Agreement and to the PayPal Website Payments Pro and Virtual Terminal Agreements to clarify that PayPal is not acting as a money transmitter in connection with those products.  This new section clarifies that PayPal is acting as your agent to receive payments on your behalf from your customers.  It also includes a representation that you are only using these products to receive payments for the sale of goods and/or services.

In the PayPal Website Payments Pro and Virtual Terminal Agreements, we are clarifying how we calculate transaction exchange rates where we perform a currency conversion.  

The updated policy will be put into play officially on April 19, 2018.