The Friends and Family option lets you send money to people you know without PayPal charging a transaction fee
When you send money as Friends and Family on PayPal, you are transferring funds directly to another person's account without the sender paying a fee. PayPal does not charge you a percentage or flat rate for this type of transfer. The recipient receives the full amount you send. This is different from the Goods and Services option, which includes a fee (usually 2.99% plus $0.30 for U.S. transactions) and is meant for purchases.
Friends and Family is designed for personal transfers between people who know each other — splitting rent, repaying a loan, sending birthday money, or covering shared expenses. PayPal's terms say you should only use this option for money you are giving or lending to someone, not for buying things. If you use it to pay for goods or services and a dispute arises, PayPal offers less protection to the sender.
Key Takeaways
- Friends and Family transfers have no sender fee, so the recipient gets exactly what you send.
- You can send from your PayPal balance, linked bank account, or debit card, and the money usually arrives within one to three business days.
- The recipient does not need a PayPal account if you send to their email address or phone number, though they will need to create one to claim the money.
- Friends and Family offers no buyer protection if something goes wrong, so use it only for people you trust.
- If you are paying for something someone is selling to you, use Goods and Services instead, even though it costs more.
Steps to send money as Friends and Family
Log into your PayPal account on the website or mobile app. On the home page, look for the "Send money" button or link. Click it, then select "Send money to friends and family" from the options that appear.
Enter the recipient's PayPal email address, phone number, or username. If the person does not have a PayPal account, you can still send to their email or phone — they will receive a notification and can create an account to claim the funds. Type the amount you want to send. Add a note if you want (for example, "rent for March" or "birthday gift") — this is optional but helpful for record-keeping.
Choose your funding source: your PayPal balance, a linked bank account, or a debit or credit card. Review the details one more time to make sure the recipient and amount are correct. Click "Send" or "Send money now." PayPal will show you a confirmation number. Take a screenshot or note this number in case you need to reference the transaction later.
How long the money takes to arrive
If the recipient has a PayPal account and you funded the transfer from your PayPal balance, the money usually appears in their account instantly or within minutes. If you funded it from a linked bank account or debit card, it typically takes one to three business days for the transfer to complete and show up in the recipient's account.
Weekends and holidays can add time to bank transfers. If you send money on a Friday evening, for example, it may not arrive until Tuesday or Wednesday. If the recipient does not have a PayPal account yet, they have 30 days to claim the money by creating an account. After 30 days, the funds return to your account automatically.
What happens if you need to cancel or reverse a Friends and Family transfer
If you sent money to the wrong person or changed your mind, you can request a refund, but PayPal does not may provide one. Friends and Family transfers are meant to be final. Log into your account, find the transaction in your activity or history, and click on it. Look for an option to "Request a refund" or "Report a problem." Explain what happened and submit the request.
PayPal will contact the recipient and ask them to return the money. If they refuse or do not respond, PayPal cannot force them to send it back because Friends and Family has no buyer protection. This is why it is critical to send money only to people you know and trust. If the recipient agrees to return the funds, the refund usually takes three to five business days to appear in your account.
Friends and Family versus Goods and Services: when to use each
Use Friends and Family when you are giving money to someone or lending money to someone you know personally — no product or service is changing hands. There is no fee, and the money moves quickly. Use Goods and Services when you are paying someone for something they are selling or a service they are providing to you. Goods and Services costs more (the sender usually pays the fee), but it includes buyer protection: if the seller does not deliver or sends something broken, you can file a claim and potentially recover your money.
Misusing Friends and Family to pay for goods or services puts you at risk. If the seller does not deliver and you try to dispute it, PayPal will likely deny your claim because you chose the unprotected option. The seller can also report the transaction as unauthorized, which could result in your account being limited. When in doubt, use Goods and Services — the fee is worth the protection.
Fraud and security considerations
Friends and Family transfers are final and irreversible once the recipient claims the money. Scammers know this and sometimes pose as people you know, asking you to send money urgently via Friends and Family. Before sending money to anyone — even if they say they are a friend or family member — verify their identity through another channel. Call them, text them, or ask them a question only they would know the answer to.
Be especially cautious if someone you know asks you to send money to a different PayPal account than usual, or if they are asking for an unusually large amount. Hackers sometimes gain access to email or social media accounts and send messages impersonating the account owner. If you suspect fraud, do not send the money. Contact the person directly using a phone number or email you know is theirs.
If you realize you sent money to a scammer, report it to PayPal immediately. Go to the Resolution Center in your account, find the transaction, and report it as unauthorized or fraudulent. PayPal may be able to recover the funds if the recipient has not withdrawn them yet, but there is no may provide. The sooner you report it, the better your chances.
Frequently Asked Questions
Can I send Friends and Family money if the recipient does not have a PayPal account?
Yes. You can send to their email address or phone number. PayPal will notify them that money is waiting, and they will have 30 days to create an account and claim it. If they do not claim it within 30 days, the money returns to your account automatically.
What if I accidentally sent money to the wrong person?
Request a refund immediately through the Resolution Center. Explain the mistake and ask PayPal to contact the recipient. If the recipient agrees to return the money, it will be refunded to you. If they refuse, PayPal cannot force them to return it because Friends and Family has no protection for the sender.
Is there a limit to how much I can send as Friends and Family?
PayPal limits vary based on your account age, history, and verification status. New accounts may have lower limits. Log into your account and check your sending limit under settings or account information. If you need to send more, you may need to verify your identity or wait for your account to age.
Do I pay tax on Friends and Family money I receive?
That depends on what the money is for. If it is a gift or a loan repayment, it is generally not taxable income. If it is payment for work or services you provided, it may be taxable. Consult a tax professional about your specific situation, especially if you receive large or frequent payments.
Can I dispute a Friends and Family transaction if the money never arrived?
Friends and Family offers limited protection, but you can still report the issue. If the money was sent from your bank account and never arrived in the recipient's account, contact PayPal support with your transaction confirmation number. They can investigate whether the transfer failed and may be able to return the funds to you.