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PayPal Updates User Agreement Effective July 9th

PayPal Updates User Agreement Effective July 9th

PayPal is updating its User Agreement effective July 9, 2019. The company highlighted several changes in three categories (buyers, sellers, and sellers with PayPal Website Payments Pro and Virtual Terminal Agreements).

The change that looks to be of greatest interest to most sellers: “PayPal may use any of the payment methods linked to a seller’s PayPal account to prevent the seller’s account from becoming negative when there are not sufficient funds in the account for seller refunds, reversals and chargebacks.”

Policy Updates announcement follows:

This page displays policy updates informing users in advance of important changes to the PayPal service, its User Agreement, or other policies. Please go to “Past Policy Updates” for previous policy updates.


We are updating the PayPal agreements listed below for U.S. customers. The changes described below will go into effect on July 9, 2019. There is no action needed from you, as the changes will occur automatically on the effective date above. In the event you would prefer to decline the changes and close your account, you can do so prior to the effective date and the changes will not apply to you.

Amendment to the PayPal Account User Agreement for Buyers

If PayPal performs a currency conversion for your purchase, and the purchase is refunded at a later date, PayPal will perform a currency conversion for the refund at the transaction exchange rate in effect on the date of the refund.

Amendment to the PayPal Account User Agreement for Sellers

  • We’re updating our User Agreement in anticipation of expanding our capabilities for PayPal Payouts. PayPal Payouts is being enhanced to allow payments to be directed to Venmo account holders in addition to PayPal account holders.
  • PayPal may use any of the payment methods linked to a seller’s PayPal account to prevent the seller’s account from becoming negative when there are not sufficient funds in the account for seller refunds, reversals and chargebacks.

Amendments to the PayPal Website Payments Pro and Virtual Terminal Agreement

  • Merchants can now accept debit network branded cards.
  • We’ve clarified merchant’s obligations regarding certification of PCI DSS compliance.

SOURCE: PayPal Announcement

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

4 thoughts on “PayPal Updates User Agreement Effective July 9th”

  1. always only use an empty prepaid card on paypal, so they dont help themselves to your banks accoutn any time they want

  2. Actually, I don’t have a problem with that part of the agreement. I hate my account being negative and I don’t leave an excess of money in PayPal. It’s mine after all. I would like an easier way to clear funds that are in arrears in Paypal instead of the “It takes 4-7 days processing time from your bank). One of my accounts is $9.17 in the red. It’s ridiculous. I figure if they had any brains, they’d take it from my bank account.

  3. I don’t have a problem with this either. The one problem I do have is that when they have to dip into your bank account (or whatever your backup is) to cover a refund to a customer, the customer then has to wait days to actually get their money back.

    I had this happen once back when I didn’t used to keep a balance in my PayPal account due to all the horror stories about them putting long holds on people’s accounts for unjustifiable reasons. It never occurred to me that the $0.30 they keep when refunding would cause my account to have insufficient funds to cover the refund.

    That’s the one time I got upset with PayPal over the phone because they were jacking with the quality of customer service I provide to MY customers. LOL It’s not that they had to dig into my bank account that I have a problem with. It was the fact that my customer wasn’t immediately refunded.

    Ever since, I have been keeping ALL of my business profits in my PayPal account and now use it as my business bank account with my PP debit card. Fortunately, I have never had an issue with PP doing anything unscrupulous to my account.

  4. I agree with PurpleIris. I haven’t had problems with PP. I do a money dump two different days of the week so that I have regular ‘paydays’. Very nice to have finally gotten that consistent with earnings that I can do it. A few years back, I had to dump daily just to be sure bills were paid.

    However, I also got a letter from PP about another program that I qualified for, where they won’t automatically delete all the money in my account assuming someone does a chargeback or whatever. I was busy and haven’t had the time to read and comprehend it all, but basically, it was about they would protect me against things that I have never had a problem with. I figure they are assuming that they won’t have to cover for me much since they haven’t had to prior to this. 🙂 I do understand that places like PP have to change as systems change. This change seems for the better, especially now that we can accept debit cards – I think they are meaning Visa, Mastercard, etc. debit cards through your bank accounts.

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