PayPal Stops Personal Payments in Malaysia. What does It Mean to You?

PayPal Malaysia to stops Personal Payments from 4 June 2013. What does it mean? How will it affect Malaysian PayPal users? Learn more in this article.

Every Malaysian PayPal users should already received an email from PayPal Malaysia about discontinuation of Personal Payments Service.

As PayPal focuses on our business strategy of enabling secure and convenient commercial transactions in Malaysia, we regret to inform you that the Personal Payments service will no longer be available in Malaysia from 4 June 2013. We sincerely apologise for the inconvenience caused.

I am not surprised by the announcement. When PayPal Singapore stops Personal Payments in February 2013, I expected – sooner or later – PayPal will do the same in Malaysia. Here it is.

Now, what is PayPal Personal Payments service? How will it affect your current business or blogshop?

What is Personal Payment?

Personal Payments are the non-business transaction money you send to other person.

You make personal payments when you send money to friends, relatives, or any person or organization not for profit making. You can pay and get paid with personal payments when you pay things such as living expenses, split your lunch costs, or pay back your friends. You cannot use this option to pay merchants or businesses.

There are few types of personal payments: gift, payment owed, cash advance, living expense, other.

Sending and receiving Personal Payments is free of charge, except it is cross-border payments (buyer and seller are in different countries) or it is funded by credit card.

What have changed?

Without Personal Payments support in Malaysia, Malaysian PayPal users…

• no longer able to send any Personal Payments to users both in Malaysia and overseas.
• can only receive money from other PayPal users where Personal Payments service is available in the user’s country.

PayPal users still able to shop online and make payments for goods and services. PayPal merchants still can receive commercial payments.

Why the change?

In short, PayPal wants to make sure it receives all the merchant fees that it should.

According to PayPal, you are required to use a Premier/Business account if you want to receive commercial payments for sale of goods and services. PayPal charge a transaction fee on payment received for Premier/Business account.

However, since receiving Personal Payments did not need to pay PayPal fee, it had become a “loophole” for small online sellers — they sell service/goods but receive PayPal money as personal payment, need not pay PayPal fee.

With the increasing of small online sellers (blogshops), the money losing through the loophole is increasing too. Stop Personal Payments will ensure PayPal receives all the commercial transaction fees.

What should you do?

If you are normal personal users who use PayPal to shop online, the new update does not affect you. Continue spend money via PayPal at will. PayPal Premier/Business users are not affected too. They are already paying PayPal merchant fees for money received.

For those are selling online but accept PayPal money as Personal Payments using PayPal Personal account type without paying merchant fees, now is the time to upgrade PayPal account to Premier or Business (under company or group name). You have to start paying for the merchant service you received now.

Ask your PayPal questions in the comment below.