This is weird, I play on ps4 and installed the game with a phyiscal version (the ARR CD from the collector edition) once the game installed the cd become useless you don't need it in the ps4 to play. He shouldn't have had to buy a digital version. For the account issue it is maybe because the phisical version is still installed? since you can only have one FFXIV account per PSN account, they are linked forever.

Do as worldofneil says it should work.