What is PayPal Goods and Services: How to Use it

The popularity of PayPal for sending money between friends and family members is undeniable. However, currently, there is another type of transaction gaining increased attention, referred to as “Goods and Services.”

So, what is PayPal Goods and Services? Simply put, it is a purchase protection feature. If you’re buying items from an online marketplace, receiving services from a business, or shopping in an online store, you want your transactions to be secure. This is where PayPal’s “Goods and Services” payment method becomes essential.

If you are planning to create a PayPal account, stick around to find answers to how does Goods and Services work on PayPal, what are its key features and how can you use it effectively. In this guide, we’ll also share important safety tips to keep in mind.

Understanding PayPal Goods and Services

Before diving into how to use PayPal Goods and Services, let’s clarify what this payment method entails:

• Goods: Physical products that you can purchase from various businesses. These range from everyday items like makeup to larger purchases such as appliances.
• Services: intangible offerings that you receive from someone, such as coaching, financial advice, or other professional services.

Previously, PayPal users often sent money to sellers using the “friends and family” payment method, even though it was not intended for commercial transactions. To enhance transaction security, PayPal now prohibits payments to business accounts using this category.

The company has made this decision to increase the security of commercial transactions. This shift is part of PayPal’s effort to reduce fraud and provide a higher level of protection for buyers and sellers. This is also noted as one of the main advantages of PayPal. Therefore, it will be useful to learn more about how to use PayPal safely and efficiently.

How does PayPal Goods and Services work in terms of fees? There are significant differences between sending money to friends and family versus paying for goods and services. There are no fees when you send money directly to a friend’s PayPal account within the UK or the United States. However, PayPal charges a standard 2.99% PayPal Goods and Services fee for transactions to business accounts. Additionally, a currency conversion fee will apply if the payment involves a different currency. For international transactions, a 1.5% fee is also added.

Making Purchases with PayPal Goods and Services

Do you wonder how to use PayPal Goods and Services as a buyer? The entire process is extremely simple:

• Log in to your PayPal account. If you don’t have one, click “Sign Up” and complete the registration process.
• Once you log in, click the “Send & Request” tab at the top of the dashboard.

• Next, you need to add the recipient’s details, such as their email address, phone number, or name.
• You should then specify the amount and click “Continue.”

• You will see the “What the payment is for?” and two options to choose from—“Sending to a friend or family” or “Paying for an item or service,” choose the latter.

• The last step is to confirm your payment.

Important: A 2.99% fee will be added for goods and services payments. Ensure you have enough balance to cover this fee when completing your transaction.

How to Use PayPal Goods and Services as a Seller?

If you are a business owner and want to receive payments from clients through PayPal, setting up to accept Goods and Services payments is also straightforward:

• Log in to your PayPal account.
• Next, open the “Send & Request” tab at the top of the page.
• Then click the “Request from anyone” option, which is located under the “Request Payments” section.

• After that, you should enter your client’s email address and click “Next.”

• At this stage, you have to enter the required amount in the corresponding box.
• The last step is to click “Request Payment” and confirm.

Once you complete these steps, your client will receive your payment request. If you use a personal account for your business, consider upgrading to a business account. It provides enhanced security and access to advanced analytics.

Learn more about PayPal friends and family limit and how it works in our separate article.

Security and Safety Tips

You no longer have to wonder, “How does PayPal Goods and Services work for buyers and sellers?” Now, let’s cover essential security tips to ensure a safe transaction experience.

Avoid using friends and family for business transactions

Although using the friends and family option is fee-free, it’s unsuitable for transactions with strangers or sellers. To benefit from PayPal’s Purchase Protection, always use the Goods and Services payment method for commercial transactions.

Enable Two-Factor Authentication (2FA)

Whether you are a seller or a buyer, it is recommended that you protect your PayPal account by activating 2FA. This feature will increase the security of your account without much effort. When you use 2FA, a code will be sent to your phone every time you log into your PayPal account.

If you have a need to cancel a pending PayPal payment, you can always see how to do it on our website.

Maintain transaction records

It is crucial for sellers to keep detailed records of all transactions and save these details for at least six months. Buyers should also save receipts and confirmations for reference. This documentation is invaluable in case of disputes.

Conclusion

In this article, we’ve answered the question, “How does PayPal Goods and Services work for buyers and sellers?” It is obvious that sending and receiving money with PayPal is easy, regardless of whether you choose it for business activity or personal use. When you select the “Goods and Services” transaction as a seller or a buyer, you get an additional level of security through PayPal’s Purchase Protection. By understanding how this feature works and following best practices—like using two-factor authentication and maintaining clear transaction records—you can enjoy a safe and seamless PayPal experience.