PHL, whoever tried this would pay dearly, as paypal will take 2.95% plus some odd change per transaction. There are some ways to tweak the commission to around 2.25% based on volume.

So if your friend A "pushed" $1000 thru a friend's B paypal account, B will only NET $965-$969...to get to AMEX CENT levels of spending...very expensive.

This also technically violates A's cardholder agreement AFAIK, and over time, AMEX might review the chronic, repetitive charges and cancel A's card. Has to be a true merchant transaction...not just moving money around. Yes, on a small basis, it probably happens every day of the year, but over time, in a pattern, or for much (my guess at $2000+ paypal reviews or has algorithms that auto-review and look for patterns), would be violative of such a cardholder's agreement. This is my understanding, though I am not a lawyer.