Sending money through apps like PayPal, Venmo, and Cash App has never been easier—but it’s important to understand how you’re sending it. Choosing the wrong payment option could leave you unprotected if something goes wrong.
At Redstone Bank, we want to help you stay informed and protected. Here’s what you need to know about the difference between “Friends & Family” and “Goods & Services” payments—and why it matters.
What Is the “Friends & Family” Option?
The Friends & Family payment type is designed for one simple purpose:
sending money to people you know and trust, like splitting a dinner bill, paying a roommate, or sending a gift.
While it may seem convenient, it comes with an important limitation:
- ❌ No purchase protection
- ❌ No dispute or chargeback options
- ❌ No recovery if the transaction turns out to be a scam
Once the money is sent, it’s typically gone for good.
What Is “Goods & Services”?
The Goods & Services option is intended for purchases, whether you’re buying something online, paying for a service, or purchasing from someone you don’t personally know.
This option provides important safeguards, including:
- 🛡️ Purchase protection on eligible transactions
- 🔄 The ability to dispute a charge if the item isn’t received or isn’t as described
- ✅ Added security when dealing with unfamiliar sellers
In most cases, the seller pays a small fee to process these protected payments—but that fee helps provide peace of mind for both parties.
Watch Out for This Common Scam
One of the biggest red flags? A seller insisting you use Friends & Family.
For example, a customer once believed they were purchasing a puppy from a seller online. The seller requested payment through PayPal using the Friends & Family option. After the payment was sent:
- The seller disappeared
- The puppy didn’t exist
- The money was unrecoverable
Because the transaction was sent as Friends & Family, there was no protection in place.
Important Tip: Check the Default Setting
Some payment platforms may default to “Friends & Family” or a similar unprotected option when sending money.
If you’re making a purchase:
👉 Always double-check the payment type
👉 Switch it to “Goods & Services” (or equivalent) before completing the transaction
Taking a few extra seconds can help protect your money.
How to Protect Yourself
Before sending money through any payment app, keep these tips in mind:
- ✔ Only use Friends & Family for people you know and trust
- ✔ Choose Goods & Services when buying from someone you don’t know
- ✔ Be cautious of anyone who pressures you to avoid protected payment options
- ✔ Question deals that seem too good to be true
- ✔ Pause and verify before sending money
A Safer Way to Pay
Payment apps are convenient tools—but they come with the responsibility to do your due diligence. Understanding your options helps you avoid scams and make smarter financial decisions.
At Redstone Bank, we’re committed to helping you stay informed, protected, and confident in how you manage your money.
Stay Alert. Stay Protected.
If something doesn’t feel right, trust your instincts and don’t send the payment.