As a result of a new rule issued by the Consumer Financial Protection Bureau (CFPB), PayPal is introducing two new types of accounts, the PayPal Cash account and the PayPal Cash Plus account. Those will be new accounts that will link to an existing personal PayPal account. You will still be able to have a personal PayPal account without having a PayPal Cash or Cash Plus account, but you can’t have a Cash or Cash Plus account with having a personal PayPal account.
The new changes will go into effect March 29, after which time any PayPal user wishing to hold a balance within PayPal will have to have a PayPal Cash or PayPal Cash Plus account. Those users who wish to open a Cash or Cash Plus account will have to have their accounts verified by PayPal, meaning that PayPal will require their name, physical address, date of birth, and taxpayer identification number which in most cases is their Social Security number. Most PayPal users who already have their accounts verified will automatically have a PayPal Cash or Cash Plus account attached to their existing personal PayPal account.
It appear that those users who don’t already have verified accounts will still be able to use PayPal to pay for goods at online marketplaces, and they should still be able to receive funds from others. They just won’t be able to keep those funds within their PayPal account. Those funds from now on will have to be immediately transferred to a linked bank account.
The new changes likely won’t affect too many people negatively, as those who don’t already have verified accounts or linked bank accounts probably aren’t interested in holding PayPal account balances anyway. Still, it will be interesting to see how the rollout works and whether any existing users will find it more difficult to use their accounts to pay for goods or to receive payments.