UK Markets close in 5 hrs 51 mins
  • FTSE 100

    5,791.17
    -0.84 (-0.01%)
     
  • FTSE 250

    17,765.54
    -87.76 (-0.49%)
     
  • AIM

    973.95
    -2.43 (-0.25%)
     
  • GBP/EUR

    1.1022
    +0.0001 (+0.01%)
     
  • GBP/USD

    1.3019
    -0.0002 (-0.0130%)
     
  • BTC-GBP

    10,168.46
    +96.08 (+0.95%)
     
  • CMC Crypto 200

    262.54
    -0.87 (-0.33%)
     
  • S&P 500

    3,400.97
    -64.42 (-1.86%)
     
  • DOW

    27,685.38
    -650.19 (-2.29%)
     
  • CRUDE OIL

    39.10
    +0.54 (+1.40%)
     
  • GOLD FUTURES

    1,901.30
    -4.40 (-0.23%)
     
  • NIKKEI 225

    23,485.80
    -8.54 (-0.04%)
     
  • HANG SENG

    24,787.19
    -131.59 (-0.53%)
     
  • DAX

    12,112.36
    -64.82 (-0.53%)
     
  • CAC 40

    4,761.96
    -54.16 (-1.12%)
     

Paypal to charge customers for inactive accounts

Lily Canter
·2-min read
The new fee will be introduced from 16 December. Credit: Getty.
The new fee will be introduced from 16 December. Photo: Getty.

PayPal (PYPL) is set to charge customers up to £12 ($16) a year if they do not use their accounts.

The inactive account fee will begin on 16 December 2020 and customers will be charged if they have not logged in or sent, received or withdrawn money for at least 12 consecutive months.

But customers can avoid being charged by logging into their PayPal account or making a transaction on or before 15 December.

Moneysavingexpert founder Martin Lewis warned customers of the new charge in a tweet yesterday.

He said: “Paypal users warning. It is going to introduce a £12 inactivity fee.”

His team have put together a guide on how the charge works and how to avoid it.

If an account has been inactive for more than a year then the account holder will be charged £12 or their entire PayPal balance, if it is less than £12.

If there is no money in the Paypal account or the balance is negative there will be no charge.

Watch: PayPal Has Focused on Pay Parity, Equality, EVP Says

PayPal said it will warn inactive customers of the pending fee by sending notifications 60 days, 30 days and then seven days before the fee is set to be charged.

The online payment company said it had no plans to close inactive accounts with no balances.

READ MORE: Pearson sales fall despite rise in online courses

Moneysavingexpert advises customers to login to their account before the deadline to avoid the charge or to close their account altogether. An account can only be closed online and not via the app.

Another option is to keep the account open but transfer any money into another account. Customers won't be charged in future if their PayPal account doesn't have a balance.

Watch: Why UK tax hikes seem inevitable