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All account types can 'sell' and accept payments if in a supported country, if he can accept friends/family payments then he can accept goods/services payments as well so he is not telling the truth.
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 paying his paypal fees and negates your buyer protection at the same time.
Advice is voluntary.
Kudos / Solution appreciated.
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