What is PayPal inactivity fee for users in Canada?

Short Answer

If you do not log-in to your PayPal account or make transaction using your PayPal account for one year, then you will be charged $20 CAD.

Detailed Answer

What is PayPal Canada?

PayPal is an online payments platform where an individual or business can send or receive money, make online purchases and pay bills. At the time of writing, it is reported that there are around 6.4 million people who use PayPal in Canada. Many famous brands, such as Walmart, Canada Goose, Aldo, eBay, Puma etc accept PayPal. It is safe to use PayPal as it uses SSL encryption for protecting sensitive information. You only need the recipient’s email address to send money through PayPal.

Fees structure of PayPal Canada for consumers


Paypal inactivity fee for users in Canada

It is a fee levied by online brokerage platforms, banks, credit card companies and payment platforms to users whose accounts have been dormant for a specific amount of time. If a user does not use PayPal for a long time, the service provider cannot earn and make profits, hence the payment platform compensates for its transaction costs through inactivity fees. Effective from November 20 2021, PayPal announced that inactive PayPal users must pay $20 CAD for being idle. The user will be charged an inactivity fee if they do not login to their PayPal account or do not use their account for one year.

How to avoid paying PayPal inactivity fees in Canada

  • Sign-in to your PayPal account
  • Shop with merchants who accept PayPal
  • Send money to your family members, if you do not have any other transactions
  • Withdraw money from your account
  • Donate using your PayPal account

Paypal inactivity fee

Although PayPal inactivity fees are profitable for them and encourage users to use PayPal actively, it is one of the biggest drawbacks of the platform. If you foresee not using PayPal for a long time, then close your account. Before closing your PayPal account, transfer your balance out of the platform and take note of your transaction history. To close your account, sign in to your account, go to ‘Settings’, then to ‘Account options’, then click the ‘Close your account’ link. PayPal will want you to provide your bank account number for security. Once done, click the ‘Close account’ button.

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Categories: Finance
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