This article will walk you through what PayPal goods and services are, how it works for buyers and sellers, steps on how to use them, and PayPal goods and services fees.

What is PayPal Goods and Services?

PayPal goods and services offer certain protections to buyers and sellers, making it a popular choice for online transactions, especially in e-commerce and freelance services. 

PayPal goods and services offer various benefits to both buyers and sellers: 

The PayPal Purchase Protection program helps buyers get a refund when the ordered product is delayed or mismatched. PayPal processes the payment securely, protecting the buyer's financial details from the seller. It adds an extra layer of security to online transactions.

Buyers can pay via their PayPal balance, linked bank account, or credit/debit card. Sellers can request payment by sending an invoice directly through PayPal or by using a payment link.

Sellers who use this option receive protection against chargebacks, reversals, and their associated fees provided they meet PayPal's Seller Protection guidelines and have proof of delivery or shipment.

How does PayPal Goods and Services work for Buyers and Sellers?

For Buyers:

When shopping online, if you select PayPal at checkout and proceed to purchase, the transaction is automatically processed as a PayPal Goods and Services payment.

Additionally, buyers can opt for a refund when the purchased item differs from the ordered one or when they didn’t receive it. 

Before finalizing the payment, you can cover the transaction fee or pass it on to the seller. By processing the payment as Goods and Services, you benefit from PayPal's Purchase Protection, safeguarding your purchase.

For Sellers:

Sellers can use their personal PayPal accounts to receive payments for goods and services sold. Once the payment is received, the funds are linked to a Cash Account or transferred to a bank account, debit, or credit card.

Additionally, sellers get protection against claims, chargebacks, or reversals filed for unauthorized transactions or items not received as long as they meet the requirements set by PayPal. 

Upgrading to a PayPal business account could be advantageous if you frequently sell goods and services through your personal PayPal account. Personal accounts can be converted to business accounts, allowing for a trial period before deciding the type of account that best suits your selling needs.

What is PayPal Goods and Services Fee?

When you send/receive money for goods and services using PayPal, a fee of 2.99% is applied to the payment. An extra fee of 1.5% applies for international commercial transactions.

On the contrary, personal payments to friends and family within the United States (or the U.K.) are free when using PayPal, provided the payment is made directly from your PayPal balance or linked bank account.

As a seller, it's crucial to monitor all fees charged by PayPal for effective financial management and accurate reconciliation in accounting software like QuickBooks. Using PayTraQer to integrate PayPal with QuickBooks represents a strategic approach to managing your finances and ensuring precise reconciliation.

How to use PayPal Goods and Services? 

You can use PayPal goods and services to pay for goods and services and request funds. Let’s look into both ways step by step: 

Steps to Pay for Goods and Services with PayPal:

• Visit the PayPal website and sign in to your account.

• Select the ‘Send and request’ option at the top of the PayPal page.

• Now, click on the ‘Pay for Goods and Services’ button.

• Type in the email address of the person you’re sending money to and click ‘Next.’

• Enter the amount you want to pay and include any additional notes or details about the transaction in the provided text box.

• Review and confirm the payment details. Follow the instructions until you receive confirmation.

Steps to Request Money for Goods and Services with PayPal:

• Navigate to the PayPal website and sign into your account.

• Select the ‘Send and Request’ tab located at the top.

• Click the ‘Request payments' button in the' Request from anyone' section.

• Enter the email address of the individual from whom you're requesting funds, then click ‘Next.'

• Enter the amount you want to request. You can also add detailed notes in the text given.

• Finally, click on ‘Request payment.' You’ll now get a confirmation stating the initiation of the request.

Difference Between Friends and Family or Goods and Services Payments

When you make a transaction on PayPal, you'll have to select the type of payment you're making. Your options include:

Personal Payments:

You’ll have the “Sending to a friend” option for money exchange with friends and family. It can be more like gifting money, splitting a bill, or sharing living expenses. Personal payments do not come under PayPal Purchase Protection. 

Sending money to someone in the US is accessible using your bank account or PayPal balance. However, using a debit or credit card for the transaction includes a small fee.

Purchases for Goods and Services:

You can choose “Paying for an item or service” when buying goods or services. It applies to paying for auction items, online merchandise, digital downloads, etc. PayPal Purchase Protection offers protection for payments for eligible goods and services. When you use this payment type, the seller adds a small fee to receive the funds.

Security and Safety Measures with PayPal

Now that you understand how PayPal Goods and Services works for buyers and sellers let's look into the security and safety measures with PayPal.

Avoid Using 'Friends and Family' Option for Unknown Recipients

While sending money using the 'Friends and Family' option is fee-free, this method also carries a higher risk of scams when dealing with people you don't know. Using the 'Goods and Services' option, which includes purchase protection, is safer for all commercial transactions.

Enable Two-Factor Authentication (2FA)

Both sellers and buyers are advised to enable two-factor authentication for their PayPal accounts. This simple step significantly enhances your account's security. With 2FA, a unique code will be sent to your mobile device every time you log into your account, adding an extra layer of protection.

Maintain Detailed Transaction Records

Keeping a record of all transactions is essential, especially for sellers, and doing so for at least six months is recommended. Detailed records are invaluable in disputes, providing clear evidence of all your transactions.

FAQs

Does PayPal Cover Goods and Services?

Yes, PayPal does cover goods and services. The coverage includes PayPal’s Purchase Protection, which can safeguard buyers if they don’t receive the product they purchased or if it differs from its description.

How Much Does it Cost to Use PayPal Goods and Services?

Using PayPal goods and services as a seller costs a percentage of the transaction amount plus a fixed fee based on the amount received. On the other hand, PayPal does not charge any fee for the buyers. 

Do I Have to Use PayPal Goods and Services for Marketplace Deals?

You can add a layer of security and protection by using PayPal goods and services for marketplace deals. Though not mandatory, it benefits buyers and sellers in case of disputes, item returns, or fraudulent activities.

How to Use PayPal Goods and Services as a Seller?

To use PayPal goods and services as a seller, create an invoice detailing the goods or services you're selling and send it to the buyer. Then, provide a payment link to the buyer generated through your PayPal account. Always clearly describe the products or services you’re selling to avoid discrepancies. Finally, keep a transaction record, including communications with the buyer and proof of shipment or service delivery.