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PayPal Quietly Adds $20 Annual Fee for Inactive Accounts in Canada

PayPal Quietly Adds $20 Annual Fee for Inactive Accounts in Canada

By Simon Hung

It'll cost you $20.00 if you don't use your PayPal account at least once a year, as the popular payment platform is implementing a new annual account inactivity fee in Canada.

The change was first spotted in PayPal's Canadian User Agreement update on August 11, with a note simply stating "We are introducing an annual account inactivity fee of $20 CAD", effective November 20, 2021.

Beyond the User Agreement update, there is no mention of the upcoming change elsewhere on PayPal's website and more importantly, no indication of what the company considers to be an inactive account.

PayPal's new account inactivity fee will take effect on November 20, 2021.

This isn't the first time PayPal has implemented an inactivity fee, as the company introduced a similar fee on UK accounts in December 2020. If the criteria is the same in Canada, accounts that have not used PayPal for 12 consecutive months will be considered inactive and charged the annual $20.00 inactivity fee (we've reached out to PayPal for clarification).

To avoid the inactivity fee, simply log into your PayPal account or use your account to make a payment at least once per year. Additionally, PayPal will not charge credit or debit cards linked to your account and will withdraw any inactivity fees from PayPal wallet balances – in other words, you will not be charged if you have a $0.00 wallet balance.

Initial reaction to the changes have been generally negative, with some account holders stating that they plan to delete their account entirely, while others view a once-a-year login as a minor nuisance. In the UK, accounts approaching the one-year inactivity mark were warned in advance via email, but it's unknown if Canadian account holders will receive any notifications.

To close your PayPal account, simply log into your account online, withdraw any funds from your wallet balance, then click the gear icon along the top navigation bar and click Close your account under your profile. To remove a credit or debit card from your account, log into your account online, then click Wallet along the top navigation bar to manage all cards linked to your account.

PayPal is an online payment platform originally launched in 2002 and popularized by its integration with eBay. The platform expanded to Canada in 2006 and is now accepted at millions of merchants nationwide, including popular retailers like Best Buy, Sport Chek, Walmart and more.

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Source: PayPal

39 Comments

    • And not allowing me to log into my account without a phone number.
      But I don't which one I used.
      If I put the wrong one in, it just adds them to the collection of data, which I try to avoid.
      Supposedly this was new in a previous agreement, but I sure didn't pick up on it!
    • Report Post
    • They rolled this out in other countries earlier this year and literally all you need to do is log in at least once per year.

      Also you don't get charged if your account balance is $0. I don't know why anyone would honestly keep money in their Paypal balance long-term anyways if they're not using the account.
    • Report Post
    • chemicalxv wrote: They rolled this out in other countries earlier this year and literally all you need to do is log in at least once per year.

      Also you don't get charged if your account balance is $0. I don't know why anyone would honestly keep money in their Paypal balance long-term anyways if they're not using the account.
      I don't either, but I'm guessing they did an audit of accounts and found a bunch of inactive accounts with balances they can get some money out of in the future.
    • Report Post
    • I can't seem to find any info confirming that you only need to login once a year. Got a source?

      I have an Australian PayPal too and nothing like this on there
    • Report Post
    • chemicalxv wrote:
      Also you don't get charged if your account balance is $0. I don't know why anyone would honestly keep money in their Paypal balance long-term anyways if they're not using the account.
      I would hope people are not treating their PayPal account like their own bank account and keeping money in there for a long period of time. If you're someone who does this, just google something like "never leave money in paypal" and you will find a bunch of horror stories about why it's a bad idea.
      Some people finding their account balance randomly frozen and not accessible for 6+ months.

      Never trust those scumbags. If you are not going to immediately use the money, transfer it out.
    • Report Post
    • Thanks for posting OP, I flushed the email without reading it as usually Terms & conditions updates are mundane.

      Time to flush PayPal.
    • Report Post
  • zod
    • This seems pretty moot to me because i'm more a buyer than a seller. I rarely have a cash balance. The odd time I sell something online, which is once every few years, I immediately withdraw or spend the balance.

      This seems to be an added cost directed at sellers, as sellers are the only ones most likely to have a balance? When you buy stuff it takes it directly off your payment methods. If it gets refunded it goes right back to your payment method.
    • Report Post
  • Kab
    • PayPal constantly coming up with reasons you shouldn't use it. Impressive!
    • Report Post
    • Just start using them for your AliExpress purchases. I dont see an issue with this
    • Report Post
    • Or just have one of your monthly subscriptions go through paypal...netflix, disney, spotify. I already do this so i only have to update my cc info at one place when it expires
    • Report Post
    • This is all a dirty scumbag rouse to get the $1.95 that they had to pay people in a class action suit settlement back

      Most people don't keep money in their PP account but many people have this $1.95 balance from their class action settlement.

      The problem is that you cannot transfer this amount out to your bank account as there is a $15 minimum. So many accounts are letting this $1.95 ride.

      But PP wants this settlement payment back, so the way they do this is by reaping it back in a $20 inactivity fee.

      Dirty scumbags.
    • Report Post
    • BobSagget wrote: I would hope people are not treating their PayPal account like their own bank account and keeping money in there for a long period of time. If you're someone who does this, just google something like "never leave money in paypal" and you will find a bunch of horror stories about why it's a bad idea.
      Some people finding their account balance randomly frozen and not accessible for 6+ months.

      Never trust those scumbags. If you are not going to immediately use the money, transfer it out.
      i used to leave $1000 in there but not anymore.
      Wealthsimple has a cash app so if anyone wants to leave money in their " online account", they can try wealthsimple cash. wait for their $75 - $100 referral or sign up bonus
    • Report Post
    • Ill cancel, i dont even know the last time I used it. Not worth my time. Same as those points cards you dont use and they let your points expire
    • Report Post
    • My account has been permanently limited 10 years ago.
      They refuse to allow me to close the account. Will they charge me?

      EDIT: After spending some time on the phone. They still refused to allow me to close the account, but said the $20 fee won't be applied to accounts that have been limited. I guess we'll just have to wait and see...
    • Report Post
    • BrianJM wrote: (...) Most people don't keep money in their PP account but many people have this $1.95 balance from their class action settlement. The problem is that you cannot transfer this amount out to your bank account as there is a $15 minimum. So many accounts are letting this $1.95 ride. (...)
      Add $14 to your PayPal account then move $15.95 to your bank account?
    • Report Post
    • Temporel wrote: Add $14 to your PayPal account then move $15.95 to your bank account?
      So there should be no inactivity fee if there is no balance on the account?
    • Report Post
    • Dealfinder111 wrote: So there should be no inactivity fee if there is no balance on the account?
      chemicalxv wrote: (...) Also you don't get charged if your account balance is $0.(...)
      Could you reference that? TIA.
    • Report Post
    • Temporel wrote: Add $14 to your PayPal account then move $15.95 to your bank account?
      I wonder how much in service fees they would charge for that. PayPal just seems to be the new douchebag bank on the street, no longer satisfied making money on customer deposits but instead needs to be bending people over and reaming them in service fees. Reminds me of advise my Dad used to give me. Don't put your money into a bank account. Instead invest it in the bank's stock. The return is MUCH higher.

      In any case, I have been unable to log in to PP due to a system problem they are have with a (large?) number of accounts where they are insisting on mobile phone numbers for (insecure) SMS 2FA but failing to actually send the 2FA confirmations. I have just asked them to close my account and mail me a cheque for the $1.95 balance which they have confirmed they are going to do. It might not seem like a lot, but it's the principle of not allowing them to douche themselves out of having to pay that class action settlement fee for being douchebags.
    • Report Post
    • Dealfinder111 wrote: So there should be no inactivity fee if there is no balance on the account?
      Right. This aligns with my previously stated theory that this was all just a douche-bag rouse to get class action settlement payments back. They are not actually trying to recover any costs of maintaining dormant accounts -- because a dormant account is a dormant account whether it has $$ in it or not -- so why only charge accounts with $$ in them? So they are just trying to recover these smaller-than-a-minimum-transfer-amount payments they had to make to people to settle a class action suit.

      I would encourage everyone who has such an amount to call PP and request a cheque. Cutting and mailing out cheques is the hardest they can be hit over this dick move they are making.
    • Report Post
    • The big question is why isn't PayPal regulated and held accountable to like a bank. Why is the government letting it do whatever they want with zero due process or oversight whatsoever?
    • Report Post
    • Poutinesauce wrote: The big question is why isn't PayPal regulated and held accountable to like a bank. Why is the government letting it do whatever they want with zero due process or oversight whatsoever?
      Because they are not a bank. I am sure they are very careful to make sure they don't do anything that brings them under any kind of oversight or regulation such as a bank does.
    • Report Post
    • Poutinesauce wrote: The big question is why isn't PayPal regulated and held accountable to like a bank. Why is the government letting it do whatever they want with zero due process or oversight whatsoever?
      On top of not being a bank (that can create money through loans) they are a US corporation. It's very difficult for the Canadian government to effectively regulate a digital corporation. But they can not do whatever they want. For example, they could not offer mortgages; that's regulated.
    • Report Post
    • I don't think being a US corporation really has much to do with it. PayPal in Canada is a Canadian company/subsidiary/whatever. It is called PayPal Canada. And even if it were not, it would not be any more difficult regulating them than it's going to be for Canada to require Netflix (another US corporation) to collect HST on Canadian subscriptions. Could Netflix simply refuse to do it? Sure. But it's frankly not in their interest to create friction with the Canadian government in doing so. Collecting and remitting HST is going to be a bit of a pain for them, sure, but not enough to start getting into a pissing contest with a government over.

      Same for PayPal I'd guess.
    • Report Post
    • The question was regulating PayPal and holding them accountable like a bank for their practices; not collecting taxes. There is a well established law to collect taxes. If it gets applied or not is a political matter. There aren't many laws governing private business practices. In the end, if you are not happy with the way a private corporation does business, you can always take your business somewhere else.
    • Report Post
    • Temporel wrote: In the end, if you are not happy with the way a private corporation does business, you can always take your business somewhere else.
      Yup. Did just that.
    • Report Post
    • Temporel wrote: The question was regulating PayPal and holding them accountable like a bank for their practices; not collecting taxes. There is a well established law to collect taxes. If it gets applied or not is a political matter. There aren't many laws governing private business practices. In the end, if you are not happy with the way a private corporation does business, you can always take your business somewhere else.
      Try saying that to a Bell customer in the 80s.

      Private corporations being able to do whatever they want is not an absolute concept.
    • Report Post
    • Jokes on them. I have 0 dollars in my paypal. So HAH! Try getting 20 from that :)
    • Report Post
    • lazycow9 wrote: Jokes on them. I have 0 dollars in my paypal. So HAH! Try getting 20 from that :)
      If they were ultimate scum, they'd steal the $20 from any linked bank account or credit card, or even worse, send the amount owed to a collections agency. But, according to the RFD news article:
      PayPal will not charge credit or debit cards linked to your account and will withdraw any inactivity fees from PayPal wallet balances – in other words, you will not be charged if you have a $0.00 wallet balance.
      ... which is why I've started the slow, two-step process of adding $13.05 to my wallet, then withdrawing the (minimum) $15 so I can get my whopping $1.95 credit. :rolleyes:
    • Report Post
    • Poutinesauce wrote: Try saying that to a Bell customer in the 80s. (...)
      Telecommunications is a heavily regulated sector in Canada, payment solution providers not so much.
      lazycow9 wrote: Jokes on them. I have 0 dollars in my paypal. So HAH! Try getting 20 from that :)
      Your PayPal account is linked to your bank account? Live in fear as the article quoted above does not give any reference to substantiate what they say. All they mention is "we've reached out to PayPal for clarification" but they don't say if indeed PayPal has responded to their request. I want to see an official detailed statement from PayPal about this and I'm pretty pissed at them at the moment. I'm considering closing my account.
    • Report Post
    • Umm what? Is PayPal kidding?
      Good way to become obsolete
      chemicalxv wrote: They rolled this out in other countries earlier this year and literally all you need to do is log in at least once per year.

      Also you don't get charged if your account balance is $0. I don't know why anyone would honestly keep money in their Paypal balance long-term anyways if they're not using the account.
      I use PayPal every so often but kept a balance through refunds, in hopes that my U.S. funds stretch further as the Canadian dollar gets better (hopes). That was why I kept a balance.

      eBay left PayPal correct? I think I opened a PayPal account FOR eBay ...
      If it's no longer needed, then why do I need PayPal? Ease of payment on SOME sites, sure, but why do I need PayPal then? Any good reason?

      Might seriously consider leaving
    • Report Post
    • ... which is why I've started the slow, two-step process of adding $13.05 to my wallet, then withdrawing the (minimum) $15 so I can get my whopping $1.95 credit.

      Is this really work? no fee charged for transfer back to bank?
    • Report Post
    • I added 3.05 to my 1.95 and donated to Humane Society.

      The inactive account fee will be a fabourite mark forscammer and malware virus.

      I will see ..eventually I will dump PayPal because of this policy. And very high currency conversion rate.
      This company exist because we purchase using them.
    • Report Post
    • i guess this means paypal will stop doling out nominal denominations to try and lure inactive customers back in...
      they "say" they won't charge the cards on file... time to use up my wallet and exit stage left.
    • Report Post
    • WPLL wrote: ... which is why I've started the slow, two-step process of adding $13.05 to my wallet, then withdrawing the (minimum) $15 so I can get my whopping $1.95 credit.

      Is this really work? no fee charged for transfer back to bank?
      Yes, of course, no fee, just a waste of time.
    • Report Post
    • emilio911 wrote: Yes, of course, no fee, just a waste of time.
      I agree with the waste of time. I initial a transfer from my bank to paypal on Aug 22, money already taken out from bank account on Aug 25. Still nothing in paypal yet as of today Aug 30. Really took so long to transfer money from bank to paypal? Paypal shows estimate arrival time is Sept 2.
    • Report Post
    • Dealfinder111 wrote: I agree with the waste of time. I initial a transfer from my bank to paypal on Aug 22, money already taken out from bank account on Aug 25. Still nothing in paypal yet as of today Aug 30. Really took so long to transfer money from bank to paypal? Paypal shows estimate arrival time is Sept 2.
      Not a waste of time: it's the principle of being able to give PayPal the middle finger salute.
      I initiated my $13.05 transfer in on Aug. 20, and received the email notification that it was in my PayPal wallet on Aug. 27. Yes, PayPal is slimy because the funds were already taken out of my bank account in about half the time it took them to post it to the PayPal wallet. Interestingly, the subsequent $15 transfer out to my bank account happened much faster: completed within a day or two.
    • Report Post
    • Hey, cool, I just checked and found the $1.95 that everyone was talking about. Guess I'll have to buy some cheap crap off eBay, like some silicon port plugs :) .
    • Report Post