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"Hidden" PayPal Fees Inciting Community Unrest 309

Posted by ScuttleMonkey
from the everyone-wants-a-cut dept.
Several sites are reporting on the addition of extra fees to PayPal that are just starting to become common knowledge. While PayPal has certainly had their fair share of controversy, the new "transaction fees" that promise to affect the entire customer base are already well on their way to becoming another. "For example, a personal account sending another personal account money for a one-time payment for, say, mowing your lawn was not previously charged any fees on either side, but is now charged the usual transaction fee (the sender gets to decide who pays). The only way to avoid this is by selecting 'gift' when making the transfer — something you can't do if you're following through on a purchase or invoice from someone. And, if you fall into this category (which many people do), it's likely that you had no idea about the changes until just now."
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"Hidden" PayPal Fees Inciting Community Unrest

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  • by Shakrai (717556) on Wednesday August 19, 2009 @04:25PM (#29124583) Journal

    ... when is /. going to re-enable the direct credit card payment option for those who want to subscribe? I was a subscriber for the longest time until this option went away. Not everybody is willing to do business with Paypal or has the ability to do so.

  • Still Cheaper... (Score:5, Interesting)

    by TheKidWho (705796) on Wednesday August 19, 2009 @04:25PM (#29124587)

    ...than using a credit card.

    • Re: (Score:3, Informative)

      by hattig (47930)

      Infinitely more expensive than doing a simple free bank to bank payment online. In the UK the fees are instantly transferred as well, if you wish, even between different banks.

      Of course, anything less and we'd burn down the banks after their behaviour recently, and their other charges.

      • In the UK the fees are instantly transferred as well, if you wish, even between different banks.

        From my experience the only time transfers are instantaneous when using online banking is when both parties are with the same bank, between different banks there's a delay.

      • by Duradin (1261418)

        Perhaps it is simple in the UK but bank transfers aren't a common (or cheap, for the costumer anyways) way of doing business in the US.

        A good example of the payment culture clash was the open pandora.

      • On what planet?
        • by Verdatum (1257828)
          Yes, free. Have you ever written a check? Have you ever done a check by phone? Have you ever been CHARGED for it? If so, I've got a bridge to sell you.
      • Re: (Score:3, Interesting)

        by petermgreen (876956)

        Infinitely more expensive than doing a simple free bank to bank payment online.
        Depends on where you live and where the recipiant lives. I looked into transferring money from my UK bank account to an ebay seller in germany that didn't take paypal (yes I know I should check before bidding and usually I do but when you are dealing with multiple auctions of the same product it's easy to get confused). It would have cost me more than the value of the transaction. Ended up sending cash through the post to settle

    • Re: (Score:3, Informative)

      Credit Card processing is a competitive business.

      Our online credit card rates are $0.15 + 1.70% per transactions. That is much cheaper than paypal.

      • Re:Still Cheaper... (Score:4, Informative)

        by Grishnakh (216268) on Wednesday August 19, 2009 @07:35PM (#29126983)

        Wrong, unless I'm quite mistaken, as I've done a little research into this.

        Those rates you quote are real, but you've conveniently omitted the monthly fees required, or the required monthly transaction volume. Not everyone is doing $100,000 worth of CC transactions per month to get those low rates. Personally, I have a small hobby business making only a few hundred dollars per year (hence the term "hobby"). Maybe I'll eventually get it to grow into something larger, but certainly nothing as large as $100k/month. For businesses like mine, Paypal is the only viable option, as CC processing is very, very expensive if you have little volume. Paypal is dirt cheap: no monthly fees, and just fees per transaction. The currecy-exchange rates are also cheap at 1% over the regular fees. For small sellers, there aren't any good alternatives, except maybe Google Checkout, which has identical rates.

    • Re:Still Cheaper... (Score:5, Informative)

      by adisakp (705706) on Wednesday August 19, 2009 @04:33PM (#29124733) Journal
      It's only cheaper until you have you something go wrong with a transaction. I can tell you for a fact that it's much easier to contest a problem with a standard credit card that it is to contest a paypal charge. As a buyer, I got screwed on what turned out to be faked brand-name items from someone in China with an invalid return address -- BTW, I did not plan on buying the item from China... the E-Bay auction "address" was in the US. However, the Paypal account address that I paid was registered to China which is something you might not spot right away. Paypal made me send back the package to China to try to get a refund which costs me a bunch in shipping. Then because they seller gave me a bad address, it got shipped back to me in the US. Paypal never gave me a refund because my item was "never actually returned to seller" even though the seller was at fault for giving a bad address.

      Overall, I was out $100. I try to avoid both Paypal and E-Bay since this incident and only use them after exhausting all other options.
      • See my comment below, I got shafted out of almost $600 by a seller out of Thailand.
      • Re:Still Cheaper... (Score:5, Informative)

        by Shakrai (717556) on Wednesday August 19, 2009 @04:41PM (#29124857) Journal

        Did you pay for the item using your credit card through Paypal or using your checking account? If you used your credit card you could have done a chargeback through the credit card company and bypassed Paypal's bullshit. Of course you'd lose your paypal account for doing this but that's a small price to pay to recover $100, IMHO anyway.

        • Re:Still Cheaper... (Score:5, Informative)

          by adisakp (705706) on Wednesday August 19, 2009 @04:47PM (#29124947) Journal

          Did you pay for the item using your credit card through Paypal or using your checking account?

          I did use a credit card. Unfortunately, I used the "Paypal"-branded credit card issued by GE Money Bank. They have in their fine print that any charge on the card through Paypal has to be resolved through paypal. They will just give you the run-around otherwise.

          First thing I did after this was to tear up and cancel that card and then link my regular credit card to paypal which is a Citibank Card -- Citibank has always been *VERY* *GOOD* at dealing with any hint of fraud whether online or by phone / mail.

          I'm out the $$$ but I've learned an important lesson which I can share with all of you. Don't use Paypal if you can't afford to be shafted -- and if you do use Paypal, whatever you do, don't get the Paypal Credit Card.

          • Re: (Score:3, Interesting)

            by Shakrai (717556)

            I did use a credit card. Unfortunately, I used the "Paypal"-branded credit card issued by GE Money Bank. They have in their fine print that any charge on the card through Paypal has to be resolved through paypal. They will just give you the run-around otherwise.

            That's pretty shitty but not at all surprising coming from Paypal. I would have gotten screwed out of $800 by them if I had waited an extra day to transfer the money out of Paypal and into my checking account. Now they just refuse to do business with me until I "reimburse" them. To hell with them :)

          • by Delwin (599872) *
            GE Money Bank

            There's your problem.
          • by Bogtha (906264) on Wednesday August 19, 2009 @05:25PM (#29125509)

            First thing I did after this was to tear up and cancel that card and then link my regular credit card to paypal which is a Citibank Card

            So wait, you got screwed by PayPal, so at the first available opportunity, you gave them your credit card details so you could continue to use their service? This kind of thing is exactly why corporations continue to screw people over - they know they can keep doing it time and time again, and people will just keep coming back for more.

            • Re:Still Cheaper... (Score:5, Interesting)

              by adisakp (705706) on Wednesday August 19, 2009 @06:46PM (#29126555) Journal

              So wait, you got screwed by PayPal, so at the first available opportunity, you gave them your credit card details so you could continue to use their service?

              Unfortunately, Paypal has become a necessary evil if you want to use E-Bay. I try to avoid it if at all possible but many sellers (at least 30-40%) on E-Bay only take Paypal for electronic payments.

              And yes, I'm trying to avoid E-Bay too but for hard-to-find or used items, you can't always find the stuff online or on Craigslist.

              Sigh... basically, that's a problem of dealing with monopolies -- which is what Paypal and E-Bay are for all practical intents and purposes.

        • Re: (Score:3, Informative)

          >>>If you used your credit card you could have done a chargeback...of course you'd lose your paypal account for doing this

          This is an oft-repeated myth. I've done several chargebacks on my ebay/paypal purchases, and my account is still alive and well. I think the key is that I followed Paypal's Dispute process, waited until they agreed to reimburse me, and then did a chargeback as a last resort (i.e. if paypal could not recover the money from the seller).

  • by Monkeedude1212 (1560403) on Wednesday August 19, 2009 @04:26PM (#29124595) Journal

    It'll be an outrage for a month, then the world will settle down. Then they'll start the membership fees.

    I think I'm just going to close my Paypal now - I only ever used it because I didn't have a credit card, and I trust the guys over at Steam with my credit card number.

    • by Shakrai (717556) on Wednesday August 19, 2009 @04:35PM (#29124763) Journal

      I think I'm just going to close my Paypal now

      My account was closed for me when I sold an item to someone on eBay who later claimed that he never received the item. Paypal locked my account over this dispute and claimed that I needed to provide them with a tracking number to get the block removed. I did so and then the buyer changed his story from "I never received it" to "he sent me an empty box"

      In spite of the fact that his story changed once confronted with the tracking number they still sided with the him and permanently blocked my account until I "repay" them for the money they reimbursed him. If I hadn't already transferred the funds into my checking account I would have lost them and the item I was selling.

      As far as I'm concerned Paypal can burn in hell.

      • Re: (Score:3, Interesting)

        by clang_jangle (975789)
        I had a bad experience with PayPal from the opposite direction. They sided with a dishonest eBay seller and facilitated him ripping me off, at which point I quickly deleted my eBay account. PayPal has many issues for sure, but this article is just "ZOMFG they're actually CHARGING me for a service!!!". Lame.
        • by BabyDuckHat (1503839) on Wednesday August 19, 2009 @04:49PM (#29124965)
          Actually, the article is about PayPal charging more for their service without out notifying customers.
      • Re: (Score:3, Interesting)

        by SydShamino (547793)

        How do you know they didn't tell the buyer to fuck off as well, and then try to just pocket the money?

        Since I see just as many stories of them siding with bad sellers as I do bad buyers, I'd bet that they use any dispute as an excuse to just keep the cash.

        • by Mursk (928595) on Wednesday August 19, 2009 @07:03PM (#29126707)
          I have a hunch that they figure out who to side with based on how valuable either party is to them. If you're an infrequent buyer screwed by a big-time seller, kiss your money goodbye, and vice versa. If both parties are frequent users, maybe they just take the hit. If both parties are infrequent users, it wouldn't surprise me to hear that they do what you describe above. If X is less than the cost of a recall, we don't do one (oops, wrong shady business on that last one).
        • by ajlisows (768780) on Thursday August 20, 2009 @12:49AM (#29129305)

          Often times the Paypal "Dispute Process" can be really messed up.

          I used to sell a lot of stuff on EBAY when I was unemployed for a period of time. I'd buy things in bulk and sell them off on EBAY. It wasn't making me rich and it was a lot of work but it was helping me get by a hard time....until they started making things difficult for me.

          The worst problem was a $27 transaction. The buyer paid and a day later my account was locked. The reason? Apparently at some time the buyer was a victim of credit card fraud so they decided it was fraud again....and because I was receiving the money I MUST be involved. Both of our accounts would be locked pending a paypal investigation.

          I had about 60 packages I had to ship out very shortly and the money to do that was...in my Paypal account. Being poor and unemployed, I didn't have nearly enough money to cover it outside of that account. I talked to the guy with the $27 transaction on the phone and we decided to just call Paypal and get them to cancel it. No way. We were both under suspicion of criminal activity. In the meantime, I had another 70-80 auctions end but the Buyers could not send me money because of my frozen account. Obviously "Paypal froze my account" didn't inspire confidence so few of those people worked with me and I got stuck with EBAY seller fees.

          I tried to explain the situation to the other people I owed goods. Some asked if I could just refund their money. I agreed to that but...guess what? I couldn't! As time wore on, they started getting mad and filing more complaints. By the time the original was cleared up 23 days later I had another 30 or so complaints where.....I couldn't refund the money. Ebay Fees hit (That money could come out) which left me with not enough money for all the refunds anyway. Of course, they started hammering my bank account after that. Luckily I got a job shortly after and was able to make sure everyone got their merchandise or money....but Paypal just destroyed me, my once spectacular Ebay reputation, and my bank account. It was absolutely ridiculous.

      • by JesseMcDonald (536341) on Wednesday August 19, 2009 @06:02PM (#29126033) Homepage

        This seems to be a common complaint, but it's hardly specific to PayPal. Merchants accepting credit cards get stuck with charge-backs all the time, and from what I can tell (from second-hand reports, anyway) the credit-card dispute resolution process isn't much better for sellers than PayPal's.

        The simple fact is that PayPal has no way of knowing which side is in the right. Maybe you did send an empty box, and the apparent change in story was just a misunderstanding. After all, the buyer did consistently claim not to have received the item; perhaps they simply didn't consider an empty box worth mentioning until you brought up the tracking number. The only way to avoid this sort of issue is to have a mutually-trusted third-party mediate the transaction rather than dealing directly with the buyer/seller. Unfortunately, that's only a practical solution for relatively expensive items. For everything else, well--sellers are fewer in number, deal in higher volumes, and are generally regarded as being more capable of absorbing the cost of proving their side of the dispute, or otherwise taking the occasional loss. This isn't a great solution, but it's the best available at present.

        • by schmiddy (599730) on Wednesday August 19, 2009 @11:08PM (#29128611) Homepage Journal

          The simple fact is that PayPal has no way of knowing which side is in the right.

          I partly agree with what you're saying, but a big problem here is that eBay has effectively shut out all other forms of payments to further their Paypal monopoly. To quote from them [ebay.com]: "Checks, money orders, and bank wire transfers arenâ(TM)t allowed for most eBay purchases. "

          If eBay still allowed USPS money orders as payment, in addition to avoiding the 2-3% Paypal fees, unscrupulous buyers would have a strong disincentive to lie about not receiving their items; the USPS can and does investigate cases of mail fraud, and mail fraud is a felony. Paypal, on the other hand, could give a rat's ass whether the buyer is lying about not receiving the item...

      • by ACMENEWSLLC (940904) on Wednesday August 19, 2009 @06:28PM (#29126335) Homepage

        I quit doing business with PayPal, and thus eBay, after they wanted direct access to my checking account to do any further business.

        What they really need to do is create an escrow service where I send PayPal my $, the seller sends them the goods. Goods are verified by paypal as best as possible with perhaps pictures sent to me. As the buyer, if I'm okay with that verification then they release both the goods and the funds.

        A decent fee should be associated with it, even if rejected by buyer. Perhaps arbitration fees for deciding who is at fault for rejection.

        This would not be something everyone would use, but when you are dealing with very expensive merchandise that is small such as computer devices it would be nice. A high MP photo of that Cisco management blade that costs over $10,000 would have revealed it was a clone built in China and not authentic.

        My thoughts.

      • Re: (Score:3, Interesting)

        by Grishnakh (216268)

        I did so and then the buyer changed his story from "I never received it" to "he sent me an empty box"

        Damn, maybe I should have tried that. I bought an item on Ebay, which was shipped by DHL. DHL claimed it was delivered, but it was not; I was at home the day they claimed it to be delivered, and looking out my window at the front door for the delivery truck. No truck, no package. I tried to file claims, but DHL wouldn't allow me to since I wasn't the shipper, and the shipper supposedly filed a claim but

      • Re: (Score:3, Interesting)

        by Lumpy (12016)

        I call BS.

        The tracking number when pulled up on UPS's website shows the UPS recorded weight of the box.

        Paypal will look that info up on a transaction. If you send a empty box, they will see that it was empty when you pull up the info.

        I had this happen, I pointed out the tracking number, AND the UPS recorded weight and asked how the hell did I send a 22 pound empty box?

        I won that dispute.

    • by tsstahl (812393)

      I think I'm just going to close my Paypal now

      You can't. Trust me. I 'closed' my paypal account nearly a decade ago (and twice more since) yet it still spews emails now and again over service updates and other folderol.

      • by Shakrai (717556)

        yet it still spews emails now and again over service updates and other folderol.

        Sure those aren't phishing attempts? Over 90% of the e-mail that I receive "from" Paypal usually is.....

  • by jerep (794296) on Wednesday August 19, 2009 @04:26PM (#29124597)

    Ever since they began taking a percentage of my transactions, I stopped using Paypal whatsoever for the freelance work I do.

    Paypal was nice when it began, but the more time passes the more annoyinng it becomes.

    • by genner (694963)

      Ever since they began taking a percentage of my transactions, I stopped using Paypal whatsoever for the freelance work I do.

      Paypal was nice when it began, but the more time passes the more annoyinng it becomes.

      What do you do now?
      I also do freelance work and I'm looking for a cheaper way of receiving payment.

      • Re: (Score:3, Insightful)

        I just tell people to cut me a check (I'm in the US and so are my clients, though.). If they need to go fancy, then I head over to my favorite community website, do some fancy search-fu, and find out what the payment system du jour is.
    • by ottothecow (600101) <ottothecow@nOSPaM.gmail.com> on Wednesday August 19, 2009 @05:12PM (#29125347) Homepage
      Not that I don't prefer things sans fees but do you really think it is unreasonable from them to change you a small amount for your *business* transactions?

      If you want to accept credit cards, paypal is by far the easiest way to do so since you don't need to qualify for a merchant account and get set up with a card processor.

      The anger here is split between the fact that they added the fees without really alerting anyone and the fact that until now their business model had always been to give people free access for personal and near-personal (small scale ebay selling etc.) and then charge fees to the business users who receive payments. People would get comfortable with using the service as a buyer (no fees) and then as a small scale seller (fees only on CC based transactions) before becoming a true revenue stream for paypal when they move a business onto paypals system. Paypal has a lot of annoying stuff going on and maybe some fees are too high (although the real fee problem lies in their parent company getting double fees since you basically have to use paypal with ebay), but I am not sure that charging a small amount for business transactions that cost them money on a site that is otherwise cost and ad free is that big of a problem.

  • Business Sense? (Score:3, Insightful)

    by The Living Fractal (162153) <banantarr&hotmail,com> on Wednesday August 19, 2009 @04:27PM (#29124631) Homepage

    As much as I hate to think so, this might just be "good business". The company can and should push the limits of their service while still maintaining their customer base. IF one way to do that is to incrementally increase fees until they see a detrimental business impact, then why shouldn't they try it? If they overdo it, then competition will step in and offer cheaper alternatives. And if PayPal is truly being anti-competitive then there are ways to legally resolve that as well.

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      eBay, corporate overload, doesn't allow competing internet payment systems.
      • Mod parent up (Score:5, Informative)

        by hack slash (1064002) on Wednesday August 19, 2009 @04:52PM (#29125019)
        eBay have a stranglehold on the online payment situation, they've banned the use of Google Checkout.
        • Re: (Score:3, Interesting)

          This is the cost of doing business with eBay, and is a major reason why eBay is on the decline. The future of online auctioning and payment is decentralized and dynamic. eBay is trying to stay afloat in a medium that is losing specific gravity -- it's GOING to sink eventually.

          • Re: (Score:3, Interesting)

            by Mitreya (579078)
            This is the cost of doing business with eBay, and is a major reason why eBay is on the decline.

            eBay is on decline? Has netcraft confirmed it? If you are selling something you basically have two venues to do so -- eBay or Amazon. That's where people go first and that's what google returns. Where do you buy things -- craigslist?? I don't like eBay, but it is both cheaper to buy there and there is plenty of stuff simply unavailable outside of eBay. And once you are stuck with eBay you are stuck with payp

        • Re:Mod parent up (Score:5, Interesting)

          by 0100010001010011 (652467) on Wednesday August 19, 2009 @05:30PM (#29125567)

          Only if you explicitly say "Google Checkout", I put in my auctions That I DO NOT accept paypal but have 'my own' credit card processor. Of course all I do is send them a Google Checkout invoice via e-mail and they pay it.

          I'm sure if I started selling to someone that worked for paypal/ebay I might get caught but 99.9% of people out there don't give a damn.

  • Buyer protection (Score:5, Informative)

    by qoncept (599709) on Wednesday August 19, 2009 @04:28PM (#29124633) Homepage
    I don't know any details, but I'd imagine you'd be waiving any of your buyer's protection rights by sending money "as a gift" instead of for a good or service.
  • by Lookin4Trouble (1112649) on Wednesday August 19, 2009 @04:28PM (#29124639)
    I thought this one was good, had a transaction that went sour, seller was supposedly in Orlando, FL, but ended up being in Bangkok, Thailand. Item was obviously defective, returned at my expense, with proof, and PayPal sided with me on the claim, letting me know they had the money from the other person's account before I sent it. Posted proof that it was sent, and received a credit of $0.00. Net cost to me for the nothing I now have in hand: $514.00 for initial transaction, +$78.30 to send the item back to Thailand for a grand total of me getting shafted in the amount of $592.30

    I'm just fucking thrilled with PayPal right now, can't you tell?

    • by scharkalvin (72228) on Wednesday August 19, 2009 @04:41PM (#29124863) Homepage

      The ONLY way I pay though PayPal is via my American Express card.
      One time I had a problem and PayPal was zero help. So I directed my
      complaint through Amex. Good old American Express came down like a ton
      of bricks on PayPal and REVERSED the transfer, which got PayPals attention quick!
      All of a sudden, PayPal was in my court and got the seller to fix things.

      • Yep, I got dicked over because it was a VISA card, and they could give two shits about their customers.
        • Re: (Score:3, Informative)

          You do realize that banks run the support for your cards and that Visa/MC are pretty much just integration and processing companies, right? Did you think there was no reason why nobody in the world has a Visa or MC card that doesn't have a bank or company's name on it? Visa and MC have 0 to do with giving you credit. They have everything to do with making sure you can use them all over the place, and that every member bank and company communicates effectively through their system.
      • Re: (Score:3, Insightful)

        by nametaken (610866)

        AMX is known for being good about that. ;)

        I've done the same with my bank. Called em up, said, "yup, those guys at paypal, they robbed me". It took about 10 minutes total. They took the money back and gave PayPal the finger. Problem solved.

        PayPal is the disgusting shithole of online payment processing companies... really always has been.

    • by adisakp (705706)
      I have an exactly similar story. Just different dollar amount and different source country (Seller was supposed to be from Ohio but turned out to be in China). Got screwed just like you with both the price of the item and the price of return shipping :-(

      Paypal sucks.
      • by scharkalvin (72228) on Wednesday August 19, 2009 @04:51PM (#29125005) Homepage

        You went about it all wrong.
        I tried to get a seller to pay for return shipping when he sent
        the wrong item (his description was wrong). When the seller wouldn't
        see things my way and PayPal wouldn't help, I just told Amex I had
        a complaint and wanted the charges dropped from my account. Amex did
        their OWN investigation and reversed the charges on PayPal. Finally the
        seller issued me a refund AND paid the cost for return of the item, at which
        point I shipped it back to him. I then told Amex that the problem was fixed and
        they and PayPal finalized things.
        NEVER use a bank account to fund a charge with PayPal. You give up too much
        clout.

    • Re: (Score:3, Informative)

      by loshwomp (468955)

      If you pay via PayPal, always always always use a credit card when you do it. If you get screwed by a seller and PayPal doesn't make it right, call your credit card company, and most often they will reverse the charge.

      If you used PayPal with the "instant transfer from your bank account" or whatever, then, well, too bad. Chalk it up as a learning experience and use your credit card next time.

      • Re: (Score:3, Informative)

        2 replies up, I used my VISA card, and they refused to do jack-squat about it because the transaction was over international boundaries. Chargeback is a great option so long as the transaction is strictly in-country (as I initially believed this one to be), but all bets are off if the other side of the transaction is in another country.
        • Re: (Score:3, Insightful)

          by Abreu (173023)

          I respectfully disagree.

          I work in the touristic industry in Mexico, and every so often I have to deal with jerks that come here, pay for services with their credit cards, and once back in the US, they call their credit cards claiming that "evil thieves in Mexico made unauthorized charges to my card! WAAAAAMBULANCE!!!"

          I can (usually) save the day for my company sending the card issuer with copies of all the invoices and contracts, signed by the jerk, along with copy of the id, but sometimes American banks ju

        • Re: (Score:3, Informative)

          VISA and MC do NOT do chargebacks. Your finance company does.

          On a side note, why does nobody know who is giving them credit? Everyone here seems to think it's Visa's/MC's fault. Visa doesn't do that. They issue the card system that banks and other financial divisions use to process credit, they don't actually issue the credit. Did anyone ever apply to Visa for a card? NO. Everyone in the history of Visa and Mastercard (AmEx is mostly a charge card company, and Discover uses its own bank for most of their c

  • Oh yeah... (Score:4, Interesting)

    by Seakip18 (1106315) on Wednesday August 19, 2009 @04:29PM (#29124657) Journal

    I had this problem a few weeks ago.

    If I remember correctly, you have to switch to the personal tab and make sure the source is a paypal balance or a bank account

    They even tell you what costs what when you send the money and click "When fees apply" link.
    Here's the excerpt from Paypal:

    Personal transfers to friends and family

            * Fully funded by:
            * PayPal balance
            * Bank account

            Free Free

            * Fully or partially funded with:
            * Credit card
            * Debit card
            * PayPal credit

    2.9% + $0.30 per transaction
    Fee is paid by the sender or recipient-sender decides.

    I used my bank account to pay a friend, so it was free. Though, if it were anything more serious, I would be leery since I can't do charge back or other convenient stuff.

    The writer does NOT mention that in the article what source the money came from.

    Perhaps another person could say why the bank account/paypal is free and the other stuff costs money.

    • Perhaps another person could say why the bank account/paypal is free and the other stuff costs money.

      Probably because there are no fees for a bank transfer - its very much like writing a check - and all the other options are basically credit cards which do have transaction fees.

    • Re:Oh yeah... (Score:4, Informative)

      by tsstahl (812393) on Wednesday August 19, 2009 @04:45PM (#29124909)

      Perhaps another person could say why the bank account/paypal is free and the other stuff costs money.

      Because it costs Paypal money to run your credit card. They have to pay processing/transaction fees for credit cards just like any other merchant. However, they are still making money. I guarantee that with their usage, they can negotiate CC transaction fees in the 5-15 cent range with a percentage take of 1.5-7%.

      Bank and paypal accounts are 'free' because of the practices surrounding those types of transactions.

    • The trick is to have people move $ into their paypal account, before sending it to you, and not use a credit/debit card to send $ to your paypal account.

      If you send paypal to paypal you're still free. I have a bank account tied to my paypal, and move money to and from Paypal via that account. I have that account tied to another account, so I can move money to and from it as needed. At any given time, there is nothing in that bank account tied to Paypal.

      Yeah, it takes a little more effort, but I have some pi

  • Screw em (Score:4, Interesting)

    by TheRealMindChild (743925) on Wednesday August 19, 2009 @04:31PM (#29124687) Homepage Journal
    Between Ebay and Paypal fees, I can't sell anything for $10 and still break even (meaning I get nothing out of selling the merchandise). So I said screw em and now anything that needs sold goes on Craigslist.
  • by jeffb (2.718) (1189693) on Wednesday August 19, 2009 @04:35PM (#29124771)

    I sold an expensive (~$1800) camera package for a friend on eBay. Got an instant PayPal payment, with a confirmed shipping address, but no other communication from the buyer.

    Shipped the package to the Texas address via UPS Ground. Followed the tracking info as it hit various points, and eventually made it to the destination...

    ...where it bounced, launching an exception that the "recipient had moved", and that it was being "redirected to the new address". An address which happened to be within 50 miles of my own address. The "buyer" continued to ignore emails.

    Called up PayPal, explained that I'd shipped the package to a confirmed address. They said, "Yes, you should be covered under Seller Protection." I then explained that it had been bounced to an unconfirmed address, without any action or agreement on my part. "Oh," they said. "If you can't provide proof that the package has been delivered to a confirmed address, you aren't protected."

    "So," I ask, "you mean that I can send a package using your approved shipper, with your approved tracking, to an address that you've confirmed -- and if the "recipient" redirects the shipment somewhere else, they can then claim that they never received the package, and I'll lose my payment with no recourse?"

    "Well, I'm afraid so."

    "So I guess I'd better recall the shipment and eat the shipping fee." "Yes, if I were you, that's what I'd do."

    And that's why my eBay/PayPal annual sales volume has gone from five figures to one figure (0).

    • by Renraku (518261) on Wednesday August 19, 2009 @05:00PM (#29125147) Homepage

      One PayPal and eBay got together, eBay was already on the way out the door. Everyone had already found out that there just MIGHT be someone out there willing to pay $50 for a $10 pair of speakers, and that it MIGHT be pretty trivial to scam people out of money for a living. 80% or more of eBay is totally worthless to most people due to this.

      So now what you have now is a company that makes its money from transactions, and settling a dispute wastes more time than its worth. For every scammed item or payment, there's one side that's unhappy, and one side that's happy. For a net gain of 0%. One person stops using it, the other person continues using it. All they have to do is maintain a decent user base and they'll be around for a while.

      Of course, like most companies, they aren't looking to the future at all. They aren't trying to change things to sustain their business.

      • Re: (Score:3, Interesting)

        by aero6dof (415422)

        Of course, like most companies, they aren't looking to the future at all. They aren't trying to change things to sustain their business.

        This is what makes me laugh when you hear about eBay's CEO thinking of a run for CA governor and the blurbs introducing the candidate as CEO fortune whatever company eBay... Of course, that prolly guarantees she'll be our next governor.

  • by yakatz (1176317)
    Every Paypal customer received an email that says that there are updates to the terms of service. If you could not be bothered to read it, that is your problem.
    I use a webservice that mointers the TOSs of companies whos' services I use to be alerted to changes.
    You can easily use TOSBack.org to do this for many companies.
  • Financial transactions always have cost, because there's always a chance of something going wrong and some expensive legal procedure following. Also, they must obviously pay for their operations. I don't understand how someone could expect a financial transaction service to be free.

    • by vertinox (846076) on Wednesday August 19, 2009 @04:57PM (#29125109)

      Also, they must obviously pay for their operations. I don't understand how someone could expect a financial transaction service to be free.

      It shouldn't be free as much as it should be cheaper.

      There is no point to micro-transactions anymore with Pay-Pal because of the fees and people are too afraid of their revocations without recourse to sell expensive items through them.

      Sadly there is no alternative for ebay these days so people have stopped using it.

    • Re: (Score:3, Informative)

      by rudy_wayne (414635)

      I don't understand how someone could expect a financial transaction service to be free.

      How about because PayPal said they would be free?

      When PayPal first started there were no fees of any kind and they had a page on their site called "How PayPal works" (it's long gone). The idea was to charge your credit card and then hold the money for a couple of days before passing it along to the merchant, making money on the "float". It was a good idea that worked for a while.

      Unfortunately, PayPal fell victim

  • Close all paypal accounts, and use mostly kijiji for my ads, and use ebay less then likely unless item is really something i need...then I use credit card on paypal..

  • unlicensed (Score:5, Insightful)

    by lophophore (4087) on Wednesday August 19, 2009 @04:58PM (#29125119) Homepage

    Paypal is operating as an unlicensed bank. I am amazed that the Feds have not already come down on them. And don't get me started on Ebay...

  • by Peet42 (904274) <Peet42@Netscape.BOYSENnet minus berry> on Wednesday August 19, 2009 @05:22PM (#29125455)

    I made an eBay sale recently. The charges, when I placed the auction, amounted to 50p, but by the time Paypal took them from my bank account they had quadrupled to £2. On an item that only sold for £15 this amounts to a 10% surcharge. But who is getting the extra £1.50?

    eBay say that the discrepancy is down to Paypal, Paypal say they're just passing on eBay's charges. Yet, as far as I can gather, they are the same company?!?

    I get the feeling they are "bouncing" small amounts like this back and forth between the two divisions in the hope that nobody will notice, or at least that we can't be bothered chasing it up.

    I wish more sites accepted Google Checkout.

  • by hellfire (86129) <deviladv@@@gmail...com> on Wednesday August 19, 2009 @05:31PM (#29125587) Homepage

    PayPal works with money like a bank or credit card, but they are treated like an internet Western Union on steroids, and yet most of the public is trusting them like a bank, which is a mistake.

    PayPal needs controls like bank. The majority of their transactions may be okay, but that's like 95 to 99%... of billions. That's way too many bad transactions. They need to be made more secure, particularly for consumers.

    I avoid PayPal like the plague because I don't want to become a statistic.

  • by GumphMaster (772693) on Wednesday August 19, 2009 @06:27PM (#29126327)

    My high 5-figure online business recently ditched PayPal because despite the various fees and commissions a bricks and mortar bank merchant facility was marginally cheaper and, here's the big one, they never reject a valid credit card. They also don't require nineteen types of personal information to process a simple, small payment. In the name of security PayPal occasionally would reject perfectly valid cards from customers with a good trading history (in one case several of the customer's cards were rejected). PayPal would not talk to the merchant about the customer's card, and the customer's time is better spent buying elsewhere rather than fighting to pay through the PayPal "Customer Service*" call centre in downtown Calcutta (that's what it sounds like).

    * Just who is PayPal's customer anyway? Is it the merchant or the buyer, or is it whoever gives PP the easiest option/biggest profit?

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