PayPal is updating its User Agreement to ensure that businesses are not using personal accounts, and vice versa. It’s also amending the PayPal Online Payment Services Agreement to update the terms for Chargeback Protection Tools to include a Loss Cap. It’s also adding a new feature for selecting a preferred payment method in one-time online checkout.
The announced changes go into effect on July 16, 2025. The following information is posted on PayPal.com – view by clicking “Legal” in the footer at the bottom of the page:
Amendments to the PayPal User Agreement
Effective July 16, 2025:
The PayPal user agreement is being updated to further clarify the differences between PayPal business accounts and PayPal personal accounts. We are also clarifying the actions PayPal may take if the activity associated with your account is not consistent with your account type.
Relatedly, the PayPal user agreement and the Legal Agreements page are being updated to reflect the terms and conditions applicable to eligible PayPal business accounts that elect to use the optional Business Account Payment Solutions.
We are adding a new feature for selecting a preferred payment method in one-time online checkout.
Review the updated PayPal User Agreement
Review the updated Legal Agreements page
One of the changes sellers may wish to take special note of is found under “Opening a PayPal Account” – among the changes in language in the new user agreement (taking effect in July) is the following:
“Personal accounts may be subject to fees that differ from the fees applicable to business accounts. Certain features associated with business accounts may not be available for personal accounts. If the activity associated with your personal account primarily involves business or commercial activity, PayPal may close your account unless you agree to cease the business or commercial activity or convert your personal account to a business account.”
The rest of the new policy updates follows below:
Amendments to the PayPal Online Payment Services Agreement
Effective July 16, 2025:
We are changing this agreement to update the terms for Chargeback Protection Tools to include a Loss Cap, outline chargeback coverage for ticket(s) for an event that will occur at a future date, and clarify criteria for merchant enrollment to Chargeback Protection Tools. We are also adding a Termination, Suspension, or Cancellation provision for Chargeback Protection Tools.
Review the updated PayPal Online Payment Services Agreement
Review the updated Merchant Fees page
It appears Chargeback Protection is an optional fee-based option described on this help page on the PayPal website.
Note that, as always, account holders should not click on links in an email asking them to sign in to the site. Be sure to review the new User Agreement and policy updates carefully.