PayPal has given idle users a discount on its inactivity fee from the usual £9 to £7 due to a reduction in costs for maintaining these accounts.
In an email to customers, PayPal set out a table of costs associated with its inactivity service fee for different currencies, including £7, or €8 for EU users.
The fee will be the lesser of £7 or your account balance. If you don’t have any money in your account, you won’t be charged but PayPal will close accounts if customers remain inactive over two charging cycles.
However, for those who were charged an inactivity fee in December 2022 and have stayed inactive since, they will be charged £5.
This inactivity fee is applied to accounts where the user hasn’t logged in to PayPal or used it to send, receive or withdraw money for at least 12 consecutive months. It is charged on an annual basis if the account remains inactive.
PayPal first announced the inactivity fee in October 2020 where it suggested an initial £12 cost. But later on, page 93 of its user agreement stated the fee would stand at £9.
PayPal confirmed this amount but at the time it didn’t explain why it was reduced from the initial £12.
In the latest email to customers, PayPal wrote the £7 fee has been cut owing to “a reduction in costs for maintaining inactive accounts”.
A spokesperson, said: “The applicability of the inactivity fee is limited and intended to only impact accounts that have not been active within the past 12 months. For accounts that we charged in December 2022 and remained inactive, the charge period will be shortened to nine months instead, with a reduced fee charge of 75% of the full amount. We also will now only charge inactive accounts for two consecutive cycles, post which we will close the account.”
How to avoid the £7 fee
If you’re an irregular PayPal user but want to keep the account open and dodge the inactivity fee, you need to take action before 19 October.
This includes:
- Logging in to your account
- Shopping where PayPal is accepted
- Sending money to family or friends, or vendors for goods and services
- Withdrawing money from your account
- Donating to charity with your account.
If you don’t remember your login details, you’ll need to follow the password recovery process.
Inactive users who want to close their account can do so by logging in, going to ‘Settings’ and selecting ‘Close your account’ at the bottom of the ‘Account’ tab.
