Need your parents to send you some cash?  Do you pay the rent and have your roommates pay you back their share?  Oh perhaps a friend/family member just simply owes you money but just don’t want to have to deal with receiving and depositing a check?  Well, you can now (at least, as of 6/3/09) send and receive “personal” payments via PayPal which will not result in any PayPal fees (and you don’t need to have a separate personal/business/etc account – at least I don’t)!

Splitting the cost of an apartment 3 ways, one of us usually pays the rent in full and then the others pay their share to that person.  Sometimes, we’re not all around at the end of the month, so a check is usually left/sent for the others to cash.  This time around, instead of writing a check and having to wait a few days for it to clear, we decided to just skip the hassle and just send PayPal and eat the 2.9% fee – but then noticed the “Personal” tab and discovered that it can be fee free!:

Needless to say this was exciting to find out – now I can lend (and borrow) from friends/family, instantly, for free!

But what are the ‘fine details’ to this free transferring of money?  It must be:

• for a personal transaction (“A personal transaction involves sending money to and receiving money from friends and family without making a purchase”),
• the sender and/or receiver must be in the US, China, Hong Kong, Singapore, or Taiwan (otherwise there’s a 0.5-2% fee),
• the source of the payment must come from a bank account or your existing PayPal balance,
• (and you can not send “payment requests” for personal transactions)

Here is a more detailed listing of when you will, and will not, be charged a fee (from PayPal’s policy update on 6/3/09), copied from https://www.paypal.com/us/cgi-bin/webscr?cmd=_update-policy:

Fees depend on whether you are making a commercial transaction or a personal transaction. A commercial transaction involves buying and selling goods or services, and payments received when you send a “request money” using PayPal. A personal transaction involves sending money to and receiving money from friends and family without making a purchase.

Personal Transactions. Fees depend on the payment source that the sender selects. The amount of the fee will be shown at the time the payment is sent. The Fee is paid by either the sender or the recipient. The sender decides who pays.

Domestic Personal Transactions – U.S. sender and recipient.

	Payment Fully Funded by PayPal Balance or Bank	Payment Fully or Partially Funded by PayPal Credit, Debit Card, or Credit Card
Sending / Receiving	Free	2.9% + Fixed Fee (see below)

International Personal Transactions – The sender or recipient is outside the U.S.

	Payment fully funded by PayPal Balance or Bank	Payment fully or partially funded by PayPal Credit, Debit Card, or Credit Card
Sending / Receiving	This fee is based on the country of the recipient. Recipient’s Country: Australia 1% Canada 1% China 0% Germany 2% Hong Kong 0% Singapore 0% Taiwan 0% U.S 1% Elsewhere 0.5%	This fee is based on the country of the recipient. Recipient’s Country: Australia 3.4% + Fixed Fee (see below) Canada 3.9% + Fixed Fee China 0.0% + Fixed Fee Germany 3.9% + Fixed Fee Hong Kong 3.4% + Fixed Fee Singapore 3.4% + Fixed Fee Taiwan 3.4% + Fixed Fee U.S. 3.9% + Fixed Fee Elsewhere 3.9% + Fixed Fee

 

So if you need money from (or need to send to) a friend, there’s no reason to have to wait the time for a check deposit or to only deal with local friends and family – use PayPal and save time and hassle!