Here is what you need to know about PayPal's Inactivity Fee

PayPal customers who have not had any activity in the past 12 months will be charged an inactivity service fee. Inactive accounts without positive balance may also be closed by PayPal after an additional 60 days. The inactivity fee was introduced in some countries in 2021, and has now been expanded to more countries that PayPal operates in.

PayPal users who have not used the account in the past 12 months are notified by PayPal about this, according to the company. Customers have until December 13, 2022 to become active and avoid the fee.

PayPal will charge the fee automatically, provided that the inactive account has a positive balance. Accounts with a balance of zero are not impacted by the fee, but they may face closure as well. The maximum amount that PayPal is going to charge is €10, or the equivalent in another currency. If the account's balance is positive but less than €10, that amount is charged by PayPal.

Accounts that remain inactive for another 60 days after the fee has been charged face termination. PayPal explains that its User Agreement allows it to charge an annual inactivity service fee. The fee is charged "to maintain accounts that are inactive".

Here is a summary of PayPal's new inactivity fee:

• Fee applies to countries that PayPal operates in, with the exception of personal accounts registered in Germany, Austria, Italy, Greece, Hungary and Poland. Customers from these countries are excluded in 2022.
• The fee is €10 or less, depending on the available account balance. If a customer has a balance of €4, that amount is the fee. Charges won't result in negative balances according to PayPal.
• Accounts without a positive balance after the charge has been processed may be closed after 60 days, if no activity is recorded.
• To avoid the fee, PayPal customers may do one of the following activities:
  • sign-in to the PayPal account.
  • Use PayPal to make a payment.
  • Send money to friends or family, or vendors.
  • Withdraw money from the account.
  • Donate to charity.

PayPal customers may want to sign in and out of their account to avoid the fee, if they want to keep the account. If they don't, withdrawing all money is the best course of action to avoid inactivity fee charges in the coming years.

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