Paypal family and friends payment on hold?

Buyer bought 2 items from me, and paid 2 postages, as I prefer to just refund the difference rather than send an invoice. I was unable to send a partial refund, as I'm guessing they paid using a voucher. So I sent the excess postage refund as family and friends, but now it is showing as on hold.

Is this because the buyer doesn't have a PayPal account?

Or they need to verify?

I used the email address I received the PayPal payment from.

 

Thanks in advance.

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