Understanding PayPal Goods and Services and How to Get Started

Image Source: unsplash

PayPal Goods and Services lets you pay for items or receive payments safely through your PayPal account. You get strong security features, like encryption and 24/7 monitoring, which help protect both buyers and sellers. With PayPal, you can enjoy easy payments and peace of mind. Take a look at how PayPal supports secure transactions:

You should know the difference between Goods and Services and Friends and Family payments. When you use the right option, you help keep your money and your purchases safe.

Key Takeaways

• PayPal Goods and Services offers a safe way to pay or get paid online with strong buyer and seller protections.
• Always choose the correct payment type to keep your money and purchases secure and avoid scams.
• You can pay or request payments easily online or in person using PayPal’s website, app, or QR codes.
• PayPal charges a small fee for goods and services transactions, which supports security and trust.
• Keep proof of delivery and follow best practices to protect yourself and resolve disputes quickly.

What Is PayPal Goods and Services

Image Source: unsplash

Definition

When you use PayPal Goods and Services, you choose a payment method designed for buying and selling items or services online. PayPal acts as a middleman, making sure your money and your purchase stay safe. This option is different from sending money to friends or family. If you buy something and it does not arrive or is not what you expected, you can ask PayPal for help. You get purchase protection automatically, so you can file a dispute if there is a problem. This makes PayPal Goods and Services the best choice for shopping online, paying for digital services, or using an online marketplace.

PayPal updated its user agreement in early 2025. Now, sellers can find their IRS Form 1099-K in their PayPal accounts if they receive more than $5,000 in payments for goods and services in 2024. This helps you keep track of your sales and taxes.

Core Purpose

PayPal Goods and Services exists to make your online transactions safer and easier. Here is what you get when you use this feature:

• You use a secure payment method that protects both buyers and sellers.
• PayPal does not allow you to use the friends and family option for business deals, which keeps things safer.
• You get protection against fraud when you buy or sell online.
• PayPal Purchase Protection gives you peace of mind if something goes wrong.
• You can pay for both physical goods and digital services.
• The process for sending or requesting money is simple for everyone.
• PayPal charges a small fee for these transactions, which helps support trust and security.

PayPal Goods and Services works for both personal and business accounts. You can use it to accept payments safely, whether you sell handmade crafts or offer digital services. PayPal also makes it easy to pay or get paid in an online marketplace.

Starting January 16, 2024, PayPal changed its Seller Protection Program. If you get paid with a card and the buyer files a chargeback for “Item Not Received,” PayPal may not protect you. To stay safe, always ship to the address on the PayPal details and keep proof of delivery.

PayPal Goods and Services helps you build trust with buyers and sellers. You know your money is protected, and you can focus on your business or shopping without worry.

How to Use PayPal Goods and Services

Image Source: pexels

How to Use PayPal

If you want to get started with PayPal Goods and Services, you first need a PayPal account. You can sign up on the PayPal website or app. Once you have your account, you can send or receive payments for goods and services easily. PayPal works on your computer, phone, or tablet. You can use it for selling goods and services, paying for an item or service, or even collecting money from customers.

When you log in, you will see the main dashboard. Here, you can check your balance, see recent PayPal payments, and manage your settings. If you plan to use PayPal Goods and Services often, you can set your preferred payment method in your account settings. This helps you pay for goods and services quickly and safely.

Tip: Always keep your PayPal account information up to date. This helps you avoid problems when sending or receiving payments.

Pay for Goods and Services

You can pay for goods and services online or in person. Here’s how to use PayPal Goods and Services for your next purchase:

Online Payment Steps:

1. Open the PayPal website and log in to your account.
2. Click the ‘Send and Request’ tab at the top.
3. Select ‘Pay for Goods and Services’.
4. Enter the recipient’s email address, PayPal handle, or phone number.
5. Type in the amount you want to send. You can add a note if you want.
6. Choose your payment method. You can use your PayPal balance, a linked bank account, or a card.
7. Review all details, including any fees. Make sure you select the correct payment type for goods and services.
8. Confirm and send your payment.

After you send the payment, PayPal will email a receipt to you and the seller. If the person you paid does not have a PayPal account, they will get instructions to sign up and claim the money. PayPal Goods and Services transactions include buyer and seller protections, so you can shop with confidence.

In-Person Payment Steps (using QR code):

1. Open the PayPal app on your phone.
2. Tap the QR code button on the home screen.
3. Scan the seller’s QR code or show your code for them to scan.
4. Enter the payment amount and confirm the details.
5. Complete the payment.

PayPal makes it easy to pay for goods and services in person, too. You just need your phone and the PayPal app.

Note: Always double-check the recipient’s details before you send money. This helps you avoid sending payments to the wrong person.

Request Payment

If you want to get paid for selling goods and services, you can request a payment through PayPal. You can do this online, by email, phone number, or even with a QR code.

Requesting Payment Online:

• Go to the ‘Send and Request’ section in your PayPal account.
• Enter the buyer’s email address or phone number.
• Add a note or emoji to explain what the payment is for.
• Review the request details and send it.

Requesting Payment with a QR Code:

1. Open the PayPal app and tap the QR code button.
2. Select ‘Your code’ to see your personal QR code.
3. Download or display the QR code.
4. Show or send the code to your customer. They can scan it to pay you instantly.

This method works well for in-person sales or events. It is fast and secure.

Tip: Always review your payment requests before sending them. Make sure the amount and details are correct.

Selecting the Correct Payment Type

When you pay for goods and services, you need to choose the right payment type. PayPal lets you pick your preferred payment method in your account settings or during checkout. If you do not set a preferred method, you can choose one each time you pay. PayPal will use your balance first, then your bank account, and then your card if needed.

You can also change your payment method during checkout by clicking the “Manage” link. Some sellers or websites may limit which payment methods you can use. If your preferred method is not available, PayPal will use a backup option.

Note: If you use a credit card, debit card, or bank account for a one-time purchase, PayPal may set that as your preferred method for future payments. You can change this in your settings.

What Happens After Payment

After you make a PayPal Goods and Services payment, the seller gets a notification. Sometimes, PayPal may hold the payment for up to 21 days. This happens if the seller is new or has not sold anything in a while. PayPal does this to protect both buyers and sellers from fraud or disputes.

Sellers can speed up the release of funds by adding tracking information for shipped items. If you sell a service or digital item, you can update the order status to “Completed.” PayPal will then release the funds after seven days. If you print shipping labels through PayPal, the money is usually released 24 hours after delivery.

PayPal reviews seller accounts every month. If you keep a good selling record, you may get your money faster. If you reach your monthly release limit, PayPal will hold new payments for up to 21 days. You can ask PayPal to increase your limit every 30 days.

Tip: Always keep proof of delivery or service completion. This helps you resolve any disputes and get your money sooner.

PayPal Goods and Services gives you a safe way to pay for goods and services or get paid for selling goods and services. You get strong protections, easy payment options, and helpful tools for every transaction.

Protections and Disputes

Buyer Protection

When you buy something using PayPal Goods and Services, you get strong purchase protection. This means you can shop with confidence. If your item never arrives or is very different from what the seller described, you can get your money back. PayPal covers both physical goods and some services. You must open a dispute within 180 days of your payment. Here’s what you get with purchase protection:

• You can get a full refund, including shipping, up to $20,000.
• You must try to work things out with the seller first.
• If you cannot agree, you can ask PayPal to step in.
• You need to respond to PayPal’s questions on time.
• Some items, like NFTs or vehicles, are not covered.

Purchase protection is free and applies automatically to eligible transactions. You only need a PayPal account in good standing.

Seller Protection

PayPal also helps sellers feel safe. Seller protection covers you if a buyer claims they did not receive their item or if someone uses a stolen account to make payments. To qualify, you need to:

• Ship only to the address on the PayPal transaction page.
• Provide proof of shipment or delivery, like tracking numbers.
• Respond quickly to PayPal’s requests for information.
• Use PayPal checkout tools for digital goods and provide proof of delivery.
• Make sure your account’s main address is in the United States.

Seller protection does not cover everything. For example, it does not apply to real estate or vehicles. Always check if your transaction is marked as “eligible” in PayPal.

Dispute Process

If something goes wrong, you can use the PayPal Resolution Center. Here’s how the process works:

During a dispute, PayPal may place a hold on the payment. This means the money cannot be used until the issue is solved. Holds protect both buyers and sellers. If you are a seller, you can speed up the process by adding tracking info or proof of delivery. PayPal uses these steps to make sure everyone is treated fairly.

Fees for Goods and Services

Domestic Fees

When you use PayPal to buy or sell in the United States, you pay a simple fee for each transaction. PayPal goods and services fees are easy to understand. You pay a percentage of the amount plus a small fixed fee. Here is a quick look at the current rates:

If you send $100 for an item, PayPal takes $2.99 plus $0.49. You get clear details before you finish your payment. These transaction fees help cover the cost of security, support, and payment processing. If you use business accounts, you see these fees on every sale. You do not pay extra for using your PayPal balance or a linked bank account. The fee stays the same for most goods and services payments in the US.

Note: Always check the fee summary before you send or request money. This helps you avoid surprises.

International Fees

PayPal charges higher transaction fees when you send or receive money for goods and services across borders. If you get paid from another country, you pay the standard fee plus an extra international charge. For example, you pay the regular 2.99% plus about 1.5% more for cross-border payments. PayPal also adds a currency conversion fee, usually around 3%, if you need to switch money between different currencies.

These extra costs cover the work of handling payments between countries and changing money from one currency to another. If you sell to buyers outside the US, always check the total fees before you accept payment. The final amount you get may be lower than you expect because of these added charges.

Tip: If you want to save money, ask buyers to pay in USD when possible. This can help you avoid some currency conversion fees.

PayPal makes it easy to see all fees before you finish a transaction. You can find more details in your account or on the PayPal website.

Friends and Family vs. Purchase of Goods and Services

Key Differences

When you use PayPal, you can choose between Friends and Family or purchase of goods and services payments. Each option works best for different situations. Friends and Family is for sending money to people you know and trust, like sharing a meal bill or giving a birthday gift. You select “Sending to a friend” and the money moves quickly. If you use your PayPal balance or a linked bank account, you usually pay no fee. However, if you use a credit card or send money internationally, PayPal may charge a fee.

On the other hand, purchase of goods and services is for buying items or paying for services. This option adds a fee for the seller, but it gives both buyers and sellers extra protection. PayPal reports these payments to the IRS if you receive more than $600 in a year, which helps with tax compliance. If you use business accounts, you must use purchase of goods and services for all sales.

Here’s a quick comparison:

Protections and Risks

You need to know the risks before you choose a payment type. Friends and Family payments do not include PayPal Purchase Protection. If you send money this way for a purchase and the seller does not deliver, you cannot get your money back. Scammers often ask for Friends and Family payments to avoid fees and protections. PayPal warns you not to use this option for buying goods or services.

Purchase of goods and services payments give you strong protection. If your item does not arrive or is not as described, you can open a dispute and get help from PayPal. Sellers also get protection against unauthorized payments if they follow PayPal’s rules. This makes purchase of goods and services the safest choice for online shopping or paying someone you do not know.

You should always use purchase of goods and services when you buy from a business, an online marketplace, or someone you do not know well. Friends and Family is only for trusted contacts. Using the wrong option can lead to account problems, lost money, or even penalties from PayPal.

Safety Tips

Best Practices

You want to keep your PayPal transactions safe and smooth. Here are some best practices you can follow when using Goods and Services payments:

1. Show the PayPal button early in your checkout process. This helps buyers feel secure and can lower the chance they leave before paying.
2. Offer clear shipping options. Let buyers know the shipping costs and delivery times up front. This builds trust and avoids confusion.
3. Always collect buyer details, like email addresses, during the order. This makes checkout faster and helps prevent mistakes.
4. If you offer subscriptions or recurring payments, use a review page. Show all plan details and payment schedules so buyers know what to expect.
5. Follow PayPal’s rules for one-time and recurring payments. This keeps your payments safe and easy for everyone.
6. Give buyers a chance to review and accept the terms before they pay. This step increases confidence and helps avoid disputes.

Tip: Always double-check payment details before you send or request money. This small step can prevent many problems.

Avoiding Scams

Scammers often target PayPal users. You can protect yourself by learning about common scams and how to avoid them. Here’s a table with some of the most frequent scams and what you can do to stay safe:

Note: If something feels off, trust your instincts. You can always report suspicious activity to PayPal through your account.

When you use PayPal Goods and Services, you get a simple way to accept payments and protect your money. You enjoy instant access to funds, strong fraud protection, and support for many business types. Always pick the right payment type to keep your transactions safe. To get started, just create a PayPal account, follow the step-by-step guide, and explore PayPal’s help center for more tips and answers.

FAQ

How long does it take to receive money with PayPal Goods and Services?

You usually see the money in your PayPal account right away. Sometimes, PayPal may hold the funds for up to 21 days if you are a new seller or if the transaction looks risky.

Can you cancel a PayPal Goods and Services payment?

You can cancel a payment only if the recipient has not accepted it yet. If the payment is complete, you need to contact the seller or open a dispute in the PayPal Resolution Center.

What should you do if you sent money to the wrong person?

Act fast. Go to your PayPal activity page and look for the transaction. If the payment is pending, you can cancel it. If not, contact PayPal support for help.

Are there limits on how much you can send or receive?

Yes, PayPal sets limits based on your account status and verification. You can check your limits in your account settings. Verified accounts usually have higher limits for sending and receiving USD.

PayPal Goods and Services helps protect your online payments, but when it comes to cross-border money transfers, the fees and conversion charges can quickly add up.

With BiyaPay, you get the same peace of mind—plus:

• Transfer fees as low as 0.5% (far less than PayPal’s cross-border costs)
• Real-time exchange rates with no hidden markups
• Same-day delivery to most countries and regions
• Support for multiple fiat and digital currencies
• Coverage across 200+ countries and regions

Before your next international transfer, check our real-time currency converter to see exactly what your recipient will get.

Move money globally with confidence—sign up today at BiyaPay.