PayPal customer service rep told me to pay contractors as "friends and family". Is this okay?

[merchonate]

I have an ecommerce business and a handful of affiliate marketers who work for me as contractors. I need to pay them. For example, I need to pay Bob $20, but I want to make sure he receives exactly that amount, and that any potential fees would be incurred by me, not Bob.

I called PayPal support, and to my surprise the service agent told me to Send Money to Bob such that the payment is marked as "Sending to a friend" and not "Paying for an item or service". The agent assured me that the only difference between these two things is the Purchase Protection you get when Paying for an item or service. In other words, there's no legal or regulatory difference.

Is this correct? I find this information suspicious.

[PayPal_JonK · Accepted solution]

Hello @merchonate,

Welcome to the PayPal Community! It is correct that the main difference between Friends / Family and Goods / Services transactions is the Seller and Purchase Protection that comes with Goods / Services transactions. You can read a bit more about the differences here: What's the difference between friends and family or goods and services payments?

I hope that helps!

 - Jon K