Judge Says Paypal's Arbitration Rules Unfair

MooRogue points to this article in today's San Francisco Chronicle, which reports U.S. District Court Judge Jeremy Fogel's ruling that Paypal "attempts to isolate itself from challenges," noting "Judge Fogel also refused to dismiss the class-action lawsuit going against Paypal." I guess I've been lucky with PayPal so far, but I know a few people who haven't.

Comments

PalPal democratizes taking credit cards

[gentlewizard]

I used PayPal earlier this year to accept credit card payments for a seminar I co-produced. It all went very smoothly: following the instructions in their online manual, I was able to add the Paypal button to my website and also pre-populate the signup form for new PayPal users.

Best of all, the fees were only $0.30 plus 2.9% per transaction, with no monthly minimum, terminal fees, etc. like with a standard credit card processor. This page at PalPal shows the comparison.

To me, this means that accepting credit card payments is not just a privilege of those who can "qualify" at a bank, but available to anyone with just a painless web signup. And the fees are less too.

If PayPal can ever get its customer service act together, it will really give banks a challenge. The credit card processors don't care: they're getting huge traffic from PayPal.

Re:PalPal democratizes taking credit cards

[Bagheera]

To me, this means that accepting credit card payments is not just a privilege of those who can "qualify" at a bank, but available to anyone with just a painless web signup. And the fees are less too.

One of the issues that has been brought up is that PayPal is NOT more economical than a merchant account. You reference their site, and I honestly wish I could find a good merchant account link - but I know from friends in business that the transaction fees are less than 2.9%.

While the point of qualification may be valid (there is none for a paypal account) the "savings" are non-existant for most business users. And, to be quite honest, it's not that difficult to qualify for a merchant account. A friend of mine started her business on-line with a merchant account and no real credit after a bankruptcy.

The real issue is that PayPal is NOT a bank, does not have the oversite that a bank does, and makes it so they can screw their users if they feel like it. The Judge in this instance has stepped in and told them "No, sorry, you aren't going to keep screwing your users."

Good for the Judge.