PayPal Goods and Services: What It Is and How to Use It

When it comes to online monetary transactions, convenience, trust, and security are everything. The PayPal Goods and Services (G&S) feature offers all three. A popular payment option designed to safeguard both buyers and sellers, it has become a go-to choice for e-commerce, freelancers, and secondhand sales alike.

How does PayPal Goods and Services work? If you are about to create a PayPal account or want to make sure you’re using it correctly, this quick guide will walk you through how PayPal Goods and Services works, and how to get the most out of it while keeping every transaction safe.

What Is PayPal Goods and Services?

PayPal G&S is a built-in feature of the platform and one of its biggest advantages. It was established to protect commercial transactions that take place online. When you pay for physical or digital products or services using this option, your payment is automatically covered by PayPal Buyer Protection. That means you can rest assured that your money stays safe until you receive exactly what you paid for.

Before July 2022, many PayPal users sent money to sellers through the “friends and family” option, even though it was not meant for commercial transactions. Yet, starting from July 28, 2022, PayPal has prohibited payments to business accounts using this category to reduce fraud and provide a higher level of protection for both parties in a PayPal business transaction.

So, how does Goods and Services work on PayPal? If your item never arrives, arrives damaged, or doesn’t match the description, you can file a claim and request a PayPal refund process. On the other side, sellers benefit from protection against fraudulent chargebacks and can safely receive payments for legitimate sales.

How to Use PayPal Goods and Services for Buying

If you’re wondering how to use PayPal safely as a buyer, the Goods and Services option is one of the most secure routes available. To get the most out of it and conveniently use it for product and service purchases without worrying about safety risks, though, you should clearly understand the process, which is quite straightforward. So, here is how to use PayPal Goods and Services as a buyer:

• Set up or log in to your PayPal account: If you don’t have an account, sign up through PayPal’s official website or app to link your bank account or card for purchases.
• Choose what you want to buy: You can make a purchase from online shops, social media sellers, marketplace listings, or freelancers.
• Go to the “Send and Request” tab: Unless you’ve got a direct request from the seller, enter their payment details, such as an email or PayPal user name, and specify the payment amount in your chosen currency.

• Select “Paying for an item or service”: This way, you’ll enable the PayPal Buyer Protection policy for your transaction.

• Complete the payment: Before clicking the “Send” button, double-check all the details. When you confirm the payment, the funds will go to the seller.

There are a few important things you should keep in mind as a buyer when using the Goods and Services payment method.

• There is a 2.99% PayPal seller fee charged on Goods and Services purchases. More often than not, sellers include it in the final payment price, so make sure you have enough funds to cover it.
• If you pay in another currency, the transaction will involve a currency conversion rate.
• For international transactions, an additional 1.5% fee applies on top of the PayPal Goods and Services fee.
• PayPal Buyer Protection excludes certain items such as real estate, vehicles, custom-made items without proof, and some digital goods.

How to Use PayPal Goods and Services for Selling

Selling online comes with opportunities and risks, and the Goods and Services option from PayPal allows for efficiently handling both. You’ll benefit from PayPal protection tools, a streamlined payment process, and a global reach. Here are quick instructions on how to use PayPal Goods and Services as a seller:

• Log in to your PayPal account: Make sure your email, shipping address, and bank details are accurate and up to date.
• Go to the “Send and Request” tab on the dashboard: While you can simply give customers your email linked to your PayPal account or even send them an invoice, creating a payment request is the easiest way to ensure they’ll use the Goods and Services method for payment, and you’ll qualify for Seller’s Protection.

• Create a payment request: Enter the buyer’s email address and the required payment amount, then confirm the request.

Once the buyer sends money through Goods and Services, the seller gets a notification. Payments usually appear instantly, though PayPal may temporarily hold funds for up to 21 days if you’re a new seller, dealing with large sums, or flagged as high-risk. You can often speed this up by providing shipping proof or waiting for the buyer to confirm receipt.

Normally, buyers expect quick shipping, so we aim to send items within 1–2 business days after payment. For high-value goods, use insurance and signature confirmation. Note that delays may lead to disputes, so it’s best to stay proactive. Always save order confirmations, shipping receipts, tracking numbers, and all communication with the buyer. These records will help you resolve any issues directly through the PayPal Resolution Center and prevent escalation to a formal claim.

Learn more about PayPal friends and Family Limit and how it works in our separate article.

Security Tips When Using PayPal

Now that you know how to use PayPal Goods and Services, remember that while the system provides strong built-in protection, there are a few more smart habits that can further shield you from scams, disputes, and unauthorized access.

Enable Two-Factor Authentication (2FA)

By adding a second verification step, such as a one-time code sent to your phone whenever you log in, you’ll increase the security of your account without much effort. Even if someone gets your password, they won’t be able to access your account without that extra code.

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

Use a Verified PayPal Account

Account verification confirms your identity by linking your account to a bank account or a credit card. Thus, you’ll enhance credibility and stand as a legitimate seller or buyer in the eyes of the other party. Besides, a verified account often comes with higher limits and smoother transaction processing.

Keep Transaction Records and Receipts

Sellers should keep invoices, shipping labels, and tracking numbers. Buyers should save proof of payment and order details. In the event of a dispute, these records serve as your strongest evidence during PayPal’s review process.

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.

FAQ