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A friends / family (or gift payment) is intended as a transfer of funds from family or friends to one another. For this reason, there is no processing fee when payment is made with bank or PayPal balance.
However as it is a “gift” payment, there is also no Buyer protection as no goods or services should have been exchanged.
If he was not a close mate or family member you should never use that option as it enables the seller to evade his paypal fees and negates your buyer protection at the same time. So yes it was a scam and nothing paypal can do for you. That is also why you would be unable to open a dispute.
Your only hope is if you funded your paypal payment via a credit card then contact your card issuer and see if they will help you.