Posted by Chuck on February 17, 2019
Checking Accounts

Published on February 17th, 2019 | by Chuck

41

Paypal Accounts will now have a Separate ‘Cash Account’ to Send and Withdraw Money

Beginning March 29, Paypal is changing the structure of their accounts so that there is a ‘Cash Account’ for holding, sending, and receiving funds which is separate from your actual Paypal account, but linked to it. The short version is that there’s no real changes here that I see, other than – perhaps – a bit more verification needed to send, receive, and withdraw money.

Paypal Cash T&C (pdf)

As a result of a new regulation issued by the Consumer Financial Protection Bureau, you’ll need a linked ‘cash account’ to hold the money in your Paypal account. The account will be automatically linked to your Paypal account. They’ll also automatically create the Cash Account for existing users, in many cases. The change will go into effect on March 29, 2019.

You can have a Paypal account without having a Cash Account. For example, if you just want to check out online with Paypal, you don’t need a Cash Account at all. However, if you want to hold money with Paypal, you’ll need the Cash Account.

Paypal notes the following: “Before you can open a Cash Account, we must verify or have previously verified the required identifying information that you provide to us. The required identifying information is: name, physical address, date of birth and taxpayer identification.”

Currently, you can send and receive small amounts of money via Paypal without giving in your Social Security Number. At a certain threshold, they’ll stop you and request your SSN and DOB. Under the new rules, it sounds like you won’t be able to have a Cash Account at all without inputting your SSN and DOB.

Some of us have been shut down from Paypal, myself included, and try avoiding giving Paypal much personal information. Presumably, they’ll require that information going forward. I receive money via Paypal regularly from places like Ebates, Swagbucks, and the like, as well as from friends and family. Hopefully, they’ll deal with us mercifully.

[Updates: Reader Pyro points out that Paypal states: “You will still be able to receive money with a personal PayPal account and transfer it to a linked bank account or debit account, but you will not be able to hold and use a balance in your personal PayPal account.” So you only need to get the Cash Account if you want to send money or use your Paypal balance to pay online.
Also, a reader points out that it might still be possible to send funds with Paypal without verification by funding the transaction with your bank or card. Only balance-funded Send Money transactions are clearly excluded.]

There are likely other nuanced changes taking place in the new terms, but that seems to be the gist of it.



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Jr
Jr

Paypal sucks!! But they were amazing for MS while it lasted…there still is some MS potential though hehehhe.

mangojake
mangojake

I’ve been shut down as well, How do you still receive payments through PP? you made a new account with new info?

Master Allan
Master Allan

Oh no. This is the worst possible news for small time sellers. All these years selling and buying a few thousand dollars a year. Keeping a low profile with no PII or SNN provided largely in part due to digital data breaches and paypal account shutdowns. Maybe sell a few used hard drives at a loss on eBay and use the funds to purchase a new SSD later from another seller. Not even practical to report your own sales because who keeps records of every purchase in their lifetime to justify it was a loss? This effectively derails selling anything online for me. Garage sales and craigslist.

eclipsor
eclipsor

they usually won’t report anything if you receive under 20k in the year

Master Allan
Master Allan

True about that reported and the 1099-K sent. If sales are over 20k you are well beyond clearing out the basement. Selling my asus netbook to eclipsor for $60, your payment falls into my new paypal cash account, feels to me you just made a DD to my tax payer identified bank account which Paypal hasn’t been.

Mike Advantage
Mike Advantage

All income needs to be reported to the IRS. Whether you get tax forms or not. The IRS can always check into your sales or anything else.

MisterBill
MisterBill

I thought I’d read that the CFPB had been gutted by the current administration. I’m surprised to hear that anything they did is going into effect. Or maybe this was announced earlier and just being implemented now?

Lc
Lc

Heard of fake news?

JB
JB

Oh no. It’s not fake news. It’s real. I had to call Paypal today! They advised that this is not fake news. My funds are tied up for now. Yay! Thanks Trump!

JB
JB

Thank Trump! Way to go USA!

Jordan L
Jordan L

FWIW even though the common knowledge is that “this decision cannot be appealed” means that the decision cannot be appealed, it can be. I don’t know if you need the stars to align but I was successful in overturning a limitation.

qmc
qmc

Great… how am I going to get the remaining money out of kiva….

Ann
Ann

By providing the same information many people already provided to Paypal years ago?

qmc
qmc

I didn’t, and I don’t particularly want to. 🙁

E: reading more in this thread (thanks Max/Pyro), it seems like you will still be able to receive money and send it to your bank account. https://www.paypal.com/us/smarthelp/article/how-do-i-sign-up-for-a-paypal-account-faq3996

Chris
Chris

Did you know that they are not allowing to use the pp extras nor the cashback one as a backup funding source for the business debit card.

Pyro
Pyro

According to their website:

“You will still be able to receive money with a personal PayPal account and transfer it to a linked bank account or debit account, but you will not be able to hold and use a balance in your personal PayPal account.”

Sending’s probably a no-go, though.

O-Qua Tangin Wann
O-Qua Tangin Wann

Pyro, I was reading the PP page and could not find anything that indicated “Sending’s probably a no-go, though,” as you wrote.

Of course, I could be wrong here, but at first glance I am thinking people who don’t provide their SSN would still be able to send others money via PP, it’s just that they cannot have any PP cash balance at all and thus not send from a PP cash balance. The sending transaction money would have to directly come from their linked bank acct. or debit, just like they’d force you to immediately transfer any money received to your linked bank acct. or debit.

I’d appreciate anyone’s input regarding this if I am wrong here. Thank you.

Shawn
Shawn

I’ve had two pp accounts for a really long time. Does this change mean that I wont be able to have both going forward since obviously I’d need to submit the same SSN for them?

warren
warren

Just wondering, will this prevent people from doing cash back scams? I though probably since it’s a different account but I don’t really know

atexit8
atexit8

Thank you for the heads up about this.

I use Paypal to send money to people, because many people have a Paypal account.

But I hate Paypal.
I used to have a bank account linked to Paypal but after have two overdraft charges from Wachovia now Wells Fargo, I unlinked it.
Paypal once tried twice to take money from the linked bank account. The first time I can understand because it was my mistake not to select to pay with my linked credit card, but the second time was their fault. Paypal refused to help with the overdraft fee.

Now I plan on liquidating the money that is in my Paypal account in early March.

If people want money from me, they’re going to have to set up Zelle which is linked to my TD Bank account.

I will have to figure out how to get paid if I sell something on eBay.
.

John

Ebay is changing their primary payment provider away from Paypal. The process has already started and is expected to be completed in 2021. They will be handling all of the payments themselves.

Celia
Celia

This may be a dumb question but I only use PayPal for getting deposits from places like Dosh, ibotta, etc. and using the balance to pay for some online purchases. I have no bank account linked but have had to verify my SS# in the past. No matter how many times I read the changes, I can’t see how this affects use like this. Am I missing something? TIA

atexit8
atexit8

As I recall I haven’t had to verify my SSN, but I have had my account for a long time.

If you are verified, you should be good to go.

Since Paypal isn’t a bank, I prefer they don’t have my SSN.

Suzanne
Suzanne

It appears Paypal has changed already, as of Feb 2019. Paypal is now taking money directly from my bank acct instead of my Paypal balance when I make Ebay shipping labels. I’ve checked my wallet in PP, it doesn’t have PP balance as an option for preferred payment but when I check the in other places in PP, it states it will always use my PP balance 1st. Called PP customer service, an hr on the phone, no resolution, no answers. Problem I have is, this bank acct is strictly only used for transferring my PP funds when I sell something on Ebay, which granted is very VERY far & few in between (UGH), I won’t have the cash in this bank acct to pay for the label. Looks like I will have to hook up my credit card for the label transactions for now on, can’t afford to have overdraft fees from the bank. I guess I could always start creating my labels directly thru USPS.com & use my PP acct to pay for that? Man, I hate CHANGE…LOL!! Glad I found this site b/c Ebay/Paypal communities have nothing on this. Thank YOU!!

Master Allan
Master Allan

Same thing with 1 of 3 accounts I use. One personal, one business, and one wifey account. I compared accounts side by side. Although the settings are the same except linked bank account numbers and names only 1 will bill for a shipping label through the linked debit card. Annoying having these transactions post to the bank. PP is not using PP funds first like the other two.

Joe
Joe

Does anyone know which bank debit cards will work for instant withdrawal? This may be a bypass if you don’t want to enter ssn or enter a checking account.

atexit8
atexit8

Just received an email overnight from Paypal.

They have moved the goal line.

We have to verify by March 18, 2019. This is 10 days earlier than the March 29, 2019 in their email about this change in policy.

I have planned to pull all my money out. This only means I have to do it sooner.

Paypal sucks again.

Justin Rain
Justin Rain

So in the new update I don’t have to put my ssn number to do payments like paying a dude 20 bucks?!

midas89
midas89

Justin, as long as you have a credit or debit card or bank account linked to your PayPal account, you can send “a dude $20” without providing your SSN. PayPal already converted my acct. to the new rules. I was able to send someone money from my linked bank account and/or card, and I have not provided them my SSN since I don’t need to keep a cash balance in my PayPal acct.

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