PayPal US Consumer Account Changes Will Require Separate PayPal Cash Balance Account

Source: PayPal

PayPal is updating the PayPal Account User Agreement and the Electronic Communications Delivery Policy to comply with new regulations issued by the Consumer Financial Protection Bureau.

These changes will go into effect on March 29, 2019 and apply to US PayPal customers.

PayPal users do not have to do anything to agree to the changes. Otherwise, if a user does not agree to the changes to the new agreement, they must close their account before March 29, 2019.

The most important change is that PayPal will now require US consumers to have a separate PayPal cash balance account to hold balances in their account.

As long as the account holder’s identity is already verified, much of the process will be automatic. Here are the details about this new separate account and the process which PayPal will use to set up these accounts.

Personal PayPal Account Changes

Because of a new regulation issued by the Consumer Financial Protection Bureau in Washington, D.C. coming into effect on April 1, 2019, PayPal is making changes that will affect consumers who want to hold and use a balance with PayPal.

PayPal users who want to hold and use balance will need a balance account which will be linked to their current PayPal account.

PayPal will offer two balance accounts: PayPal Cash and PayPal Cash Plus. Information about both types of balance accounts can be found in the PayPal Cash and PayPal Cash Plus Terms and Conditions (see document below).

For PayPal users with an existing personal PayPal account and where PayPal has already verified their identity, the company will establish and automatically link a PayPal Cash Plus account to their current PayPal account.

Information about your PayPal Cash Plus account, including the balance amount, will be easily available using the existing PayPal login.

For all other consumer PayPal account holders, if they want to hold and use a balance, besides verifying their identity with PayPal, they will need set up a balance account which will be linked to their current PayPal account.

New PayPal Cash and PayPal Cash Terms and Conditions

READ MORE: PayPal Credit Hits Milestone – Reaches $50 Billion in Transaction Volume

What do you think of this new government requirement PayPal must follow? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.

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  1. I think the only negative of requiring one’s SSN for a personal PayPal account where the account holder wants to have cash in their PayPal account is that it’s yet another database that might get hacked one day where your identity can be compromised. (Remember, no one ever thought Equifax could be hacked.)

    Otherwise, you have two choices: Give PP your SSN just like you would a bank where your cash is also held, or don’t ever need to keep cash at PP and don’t give your SSN. Link your external bank or debit acct. and have the money you receive via PP transferred there with no SSN required be provided.

    I am assuming if you want to send someone money via PP, you’ll still be able to have PP take the money out of your linked bank or debit account just like before, without having to give PP your SSN?

    • Good question. I wonder if this also an extension of the KYC (Know Your Customer) requirements banks must follow? Among other reasons, that requirement exists because of money laundering concerns. Some banks won’t even let you deposit cash into a personal account unless you are the account holder.


  2. When I called Paypal today they asked for my DOB and last 4 of my SSN. I wasn’t even thinking and I gave it to them! Now I’m wondering why they asked for it. I only have a personal PP account that I use for just a small amount of buying and selling.

  3. I thought that you have always ( or for some time) needed to have your SS# registered to sell, just not to buy. I had given them my SS many years ago but somehow they lost is as they have been requesting not mandating that I verify it for well over a year. I have not sold during that time as they required it for that. I have bought freely and also disconnected my mankind account simply because I wished to do so. Is it really possible to have any account at all without it. They are asking me to verify before the first.It sounds like they will close it if I do not..

  4. This is what credit card companies ask for to verify identity. The last 4 digits if your social security number are unique to your social security account and your DOB also routinely used to verify your identity with banks and credit cards to make sure you are who you say you are.

    It’s been a routine for years to verify your identity. If you don’t have a credit card or a bank account or didn’t have Pay Pal account in the past, this might be new to you but its been routinely asked for over 10 years at a minimum.

  5. “The last 4 digits if your social security number are unique to your social security account”

    If that were true there would be a maximum of 10,000 Social Security numbers.

  6. Once you give them the social, then you have to also provide them with your picture. When verifying your bank account, they actually ask for your ID & password to your bank!

  7. PayPal wants more than the last four digits of your social security number, they want a copy of the card along with your full name shown. No way in hell is that going to happen. The so called new regulations are hogwash, they will not do anything. The only thing it will do is let PayPal have all your information, then a hack will happen and all your information is out there and then you lose your identity and everything else.

  8. All this is unnecessary, especially when you keep a minimal amount in your bank account. I complete surveys Every $10.00 I receive I transfer to PAYPAL and then on to a checking account. Tax ID should not be requested. I don’t have a business of any kind. They have taken something simple and ruined it. My question is why???

  9. They were forcing me to disclose all type of ID pictures and numbers, but I declined. I am too old to be intimidated by these idiots who think they can pressure me for such sensitive information. One of the things I told them was that considering they were not doing ANYTHING FOR FREE, and that I was not borrowing their money, I did not find a reason that excessive amount of information they want from us.

    If WE ALL decline giving our SSN to anybody who asks without a valid reason, they will stop harassing us. If we otherwise give in, and provide our SSN to then, soon they will be asking for it everywhere, even if you go to buy a donuts with coffee. I will only provide such info to a new bank I decide to use, or a potential employer. Paypal is not either of them.

    • PayPal is following new laws, so it’s not them asking for this information, it’s them being forced by the US government to obtain this information. Over the last decade, there have been more and more financial services companies that had to collect this information to comply with anti-money-laundering laws and this is the same here.


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