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PayPal vs Google (Buy)
pc-facile.com writes "While Google Chief Executive Eric Schmidt confirmed in press accounts that the company was building a payment service, Mr. Schmidt also denied it would directly compete with PayPal. Mr. Schmidt said Google didn't intend to offer a "person-to-person, stored-value payments system," which many people consider a description of PayPal's service. Mr. Jordan (PayPal chief) says he and his team immediately "dissected the wording" of Google's statements. He says he doesn't believe Mr. Schmidt..." There's also a more in depth WSJ article about the service.
Since it's IPO on April 30th 2004, Google seems to be testing the waters of a lot of different markets.
Granted, they all center on information technology, this company is ever expanding along different product lines. We've seen Google blogs, Picasa, Analytics, Video, Desktop, Talk, Earth, Toolbar, Gmail, Translate, Mobile, etc. And (thank god), they've all been presented to us rather benignly but are they all considered successes?
And now we observe GBuy, a service to compete with Paypal. Paypal's history has been rocky but they do have a solid foothold as they are almost married with eBay. Will eBay welcome the new GBuy and favor it equally with Paypal?
Google profits around $17 billion a year--do they really need to become a money transfer service? Ebay reports $4.5 billion a year, will they be sharing some of that with Google? Will a cut of that even matter to Google?
What's interesting is to see if they actually take a cut (a la Paypal) or if they just continue Google ads through the pages on the service to pay for all of the legal work that comes with claims and fraud. They have the resources to do it and this would probably kill sites like Paypal that take a 3% or more charge on each transaction.
My work here is dung.
It might be foolish because of their relationship with eBay, but it's not evil. Of all the the things that Google's done lately that some might consider questionable, this isn't one of them.
At least you seem lucky enough to be able to get PayPal in your country. Last year my country (Malta) was enabled for PayPal, but ONLY for sending money, and not receiving. If you take a look at their country list, it's a small percentage of the total countries of the world, though obviously it DOES hit most of the online community. Yet, not all...
:)
A good number of people who, like me, have long been hoping for a popular alternative to PayPal, must be wathering in the mouth in anticipation. Google, please save us, PayPal doesn't like our country!
Yeah if you look at it so one sided where "the seller lost a sale to you" you don't see the big picture. I sell on eBay all the time and I've been screwed from people paying with other methods. PayPal is by far the safest form of payment on eBay and I'm sure the seller didn't miss your sell as there was a buyer right behind you.
Its a similar problem. I don't order ANYTHING from eBay anymore because the quality of the last few items I have bought were extremely poor. The standard is to sell your known-to-be-broken crap on eBay "as-is" and then say you believe it works, but can't guarantee it.
I have a merchant account and while the fees are lower than PP they are still a total rip off. Perhaps it's cheaper on the US side of the pond but over here in the home country (sorry) if you are shifting less than £5000 worth of stock a month you probably would be better off with PP. Having said that, I think a real merchant account makes a business more professional looking so there are some pay backs.
I'm going to go back to dreaming about selling £5k worth of stock in a month.
I used to have a better sig but it broke.
The times they are a changin'
_ plus_5cents_new_account_pricing
- fees-outside ). For example: if your Premier/Business Account rate for receiving funds is 2.9% + $0.30, using PayPal's 5% + $0.05 micropayments rate would reduce the total transaction fee charged to payments received below the value of $12 (per payment). However, if you accept payments that are greater than $12, you would pay a lower processing charge by accepting the payment into the account set with the 2.9% + $0.30 rate.
That old MP argument is not going to hold up forever:
PayPal Announces Micropayment pricing:
http://www.paypal.com/activate_micropayments_5pct
On August 31st, 2005, PayPal announced new Micropayments rate of 5% + $0.05 per transaction.
The rate is available now, to U.S. merchants who sell digital content to U.S. customers, when PayPal is the sole payment solution offered to customers for micropayments transactions.
Merchants who wish to use PayPal's micropayments pricing will need to open a new PayPal account through the account registration link at the bottom of this note.
Each PayPal account is associated with only one merchant processing rate. That rate determines the fee that's applied to funds received into that account (additional information on PayPal's Standard Fees is available at: http://www.paypal.com/cgi-bin/webscr?cmd=_display
If you wish to leverage PayPal's micropayments pricing, please open a new browser window and paste the link below into the URL field to open your new PayPal account with micropayments pricing of 5% + $0.05.
The last straw for me was a little ($50) transaction where the buyer was using fraudulent bank data. Two months later, I got an email from paypal telling me this had happened, which was news to me. So I had the $50 removed from my account. A nuisance, and perhaps unreasonable as they had failed to verify the data; I wasn't given their banking records to check, but it was my fault when they were wrong. But the great thing was the extra interest charge for the two months I had held their money. Their two month delay, not mine. And a $10 penalty, just because. Of course, I do not buy or sell through PayPal any more.
You don't need to have a PayPal account to send a credit card payment, you're correct.
What finially got to me was that in order to receive a credit card payment, they force you to upgrade your account to their "Premier" level, which then skims a percentage off of all your incoming transactions (I think it's 3%), regardless of whether or not they're credit-card based.
For someone who only does a small percentage of credit-card business, this is a real scam. I know that the credit card companies charge fees. I'm not faulting PayPal for charging for credit card service. What I do find obnoxious is that they want to charge you that percentage on EVERYTHING, rather than just on the incoming credit card transactions.
The other thing that I strongly dislike is that there's no way to advertise that you use PayPal, without having the credit card icons pop up. I'm more than willing to accept PayPal, but I'm not going to upgrade to a Premier account for one sale -- especially since PayPal will only let you downgrade back to the regular level of account ONCE. If you accept a second credit card transaction by mistake, you're stuck giving them 3%, permanently.
It's just one of the many reasons I have all but given up on eBay. The decline in the quality of the average merchandise, and the increased difficulty in actually contacting buyers and sellers directly (as opposed to through the eBay communication/payment system) is also a turnoff for me. I got a couple of bad pieces of gear, and I couldn't reach the seller until I left them bad feedback. And from what I've heard, this isn't uncommon -- it never used to be this much of a problem.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
I remember when paypal was "we'll make our money off the float, totally free for you!". That lasted what, 8 months?
And they make plenty of money off the float. However, they end up returning it to you -- in exchange for your social security number and other personal details -- if you elect to "invest" in the PayPal money market. They pay something like 4.28% which is the highest paying money market fund available right now. Until now, they charged nothing to you for administrating the account but soon they're going to lop 0.25% off for administration which is still cheap.
Paypal has obvious costs for credit card transactions but I'd like to see a business account where cash (paypal funds) or check transactions were discounted or free. The limit the personal accounts to the point where they're nearly useless.
The sad thing is paypal is worse for the seller than the buyer... I remember selling a computer on ebay a while back... Paypal garnered 70 in fees for the transaction... That coupled with ebay's 4% final value fee (or whatever it is), is making ebay less and less of a viable medium to sell things...
Yeah, and when Paypal refused to give the money directly to the Red Cross? That was awesome.
If paypal had really believed it was a scam they should have reported it to the police. What they did was they automatically profiled their account as fradulent, froze the account, and intentionally made it difficult to contact support.
As long as PayPal continues to REQUIRE your bank clearing numbers they will be EVIL.
Check the TOS. PayPal limits the amount you can buy on a regular account. Regardless of how you fund your account, i.e. bank card, credit card, checking account, etc., once the limit is hit your account is finished. That is unless you upgrade your account and give them your bank clearing numbers, a.k.a. unfettered access to your checking account any time the want.
This is the true horror story. PayPal is a SELLERS service. The say so themself. They try to insure that a buyer cannot bail on a sale. If they have your clearing numbers thay can enforce the transaction without recourse. It's like a wire transfer, one way and unreversable. So you cannot cry to the bank because they cannot get the money back. You have to get PayPal to send it back.
There is no reason why PayPal should need my clearing numbers for any reason other than they want access to my money in the event of a dispute with a seller. As long as I use my credit card for purchases I am covered for fradulent sales. The seller is never covered except by PayPal, if the have your clearing numbers.
These are the facts. It's all on PayPal's website it's just buried in the TOS. If you have not ran afoul of PayPal then you are one of the lucky ones but remember this. If they have your clearing numbers and for any reason they are stolen then you are royally screwed because with the clearing numbers someone can drain your checking account and you bank WILL NOT be able to reverse the transaction. Additionally, since it is a wire transfer the bank is not obligated to reimburse you for the loss.
Think about. Would you give the keys to your house to someone you didn't know? If not, why would you give the keys to your checking account to someone at all?
As long as Google lets me use my credit card as a funding mechanism for my account then I am all over it. Ask for the keys to my checking account and I will shop elsewhere.