PayPal's 'Policy Update' Includes Price Hikes (paypal.com)

"Buying and selling items on the internet is about to get a bit more expensive if you use PayPal to transfer money," reports MLive, noting that some of PayPal's fees will be increasing on March 29. Slashdot reader turbotalon also complains PayPal is disguising news of the price hikes as a "policy update". Roughly one quarter of the "policy changes" are rate hikes, yet their emailed summary glosses over the rate hike, focussing instead on a few of the "policy changes" with one sentence at the end about "changing some of the fees we charge". Additionally, they have added a "non-discouragement clause" for sellers that provides:

"In representations to your customers or in public communications, you agree not to mischaracterize PayPal as a payment method. At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal; and, if you enable your customers to pay you with PayPal, you agree to treat PayPal's payment mark at least at par with other payment methods offered."

Comments

Not use it?

[sp4ni3l]

You could of course choose not to use it. This is a playing field with enough alternatives.

Re:Not use it?

[WD]

Do you have any suggestions for such alternatives?

Re: Not use it?

[mmell]

Uh, credit card? Debit card?

Re:Not use it?

[sp4ni3l]

http://tech.co/top-15-alternat... Just to name a few on top of normal creditcards?

Re: Not use it?

[Anonymous Coward]

Idiot.

He is mainly talking about sellers. Getting a CC authority is expensive and hard for many.

On the buyer side there are benefits to not splashing your CC details to people on the net who may or may not store it and then get hacked.

Re: Not use it?

[Traxton]

In Sweden, we have something called "Swish". All transactions are done on your smart phone using the sellers mobile phone number. Both buyer and seller has configured which bank account the money gets transferred to and from. Only thing that gets shared is your phone number. The service is 100% free for both buyer and seller. This has replaced paypal and cash in almost all transactions (Sweden is estimated to be 97% cash free).

Re: Not use it?

[corychristison]

If you have an online presence and sell products/services I highly recommend Stripe.

Re: Not use it?

[Anonymous Coward]

> Sweden is estimated to be 97% fully surveilled and controlled.

FTFY.

Re: Not use it?

[arth1]

Sweden, like most of Europe has a payer initiated system. USA doesn't. Here, all transfers are started by the receiving side (payee), and then the payer (or bank or credit institution on behalf of the sender) have to approve it.
So a giro system isn't possible, and bank account numbers becomes private information to be guarded.

Yes, it's pretty damn backwards. Hell, a large portion of Americans still pay by cheque. And credit and debit cards still have a magnetic strip. Even those that have a chip still have the magnetic strip. And raised letters. As late as last year, I paid in a store where they rolled carbon paper over the card to get an imprint. No, I'm not kidding.
The bank I use (one of America's largest) doesn't even have two-factor authentication for its online banking, something my European bank had back in '98.

It's by far the most antiquated banking system I have encountered anywhere in the world, yet Americans believe they're the most advanced nation on the planet...
To Americans, PayPal seems like a miracle of convenience...

Re: Not use it?

[ArchieBunker]

Can you show me to how only take credit card payments on eBay? I remember when you were allowed to send money orders! When Google came out with their payment system eBay started cancelling auctions who used it and then they bought PayPal.

Re:Not use it?

[jenningsthecat]

Unless you use ebay. That is the only reason I bother with PP.

The only reason I don't bother with eBay is that, except for the occasional seller set up to take debit or credit cards, the only way to pay is with PayPal. I simply refuse to do that. Ever. Because of PayPal, eBay is dead to me.

Re: Not use it?

[tlhIngan]

Be a Luddite and use US postal money orders.

Back before PayPal was merged with eBay and CC use became common, I used this method. Only drawback is that it's slower.

Buyer sends M.O., When it arrives, go to the P.O. to mail the item. Cash the M.O. and pay the postage. If the M.O. is bad or counterfeit, you know right then before your item leaves your hands.

What's in it for the buyer? Proof of payment. Besides, using the P.O. for fraud is a bad idea (for either party).

Yeah, and that really adds a lot of friction to the whole "e-commerce" thing.

First off, the buyer now has to go to a post office and get the money order, line up, and then send off the letter. It then has to arrive at the seller's mailbox. That can easily be two weeks for domestic (assuming the buyer has to make a special trip to the post office, so they'll do it on a convenient day which may be a week later). And if it gets lost, it can easily be more weeks.

Second, having to go out to do the transaction, versus just keying in your credit card number and paying while sitting at the computer. That itself can mean if you're a seller that buyers will move on to someone more convenient, or for eBay transactions, buyers will factor in their inconvenience into the bids, making lower bids.

There's a reason Paypal is the way they are - they know they remove a lot of friction between two parties paying each other on the Internet.

eBay owning Paypal made a lot of sense, since eBay has a lot of random two parties transacting. Money orders can easily take a month or more - sellers often demand payment within 3 days of auction ending because of high volumes. If they had to deal with money orders, that easily means a buyer can delay payment for weeks (even if a letter is lost, the post office may demand 3 or more weeks to elapse before declaring it lost and suggesting you resend).

Yeah, a seller won't be willing to wait for months for payment, and yet, a buyer can easily take that long if unlucky.

Is it a payment method or isn't it?

[dgatwood]

... you agree not to mischaracterize PayPal as a payment method. ... you agree to treat PayPal's payment mark at least at par with other payment methods offered.

So it is a mischaracterization for us to call it a payment method, but PayPal calls it a payment method. More to the point, if it isn't a payment method—a means of transferring money to someone in exchange for goods or services—then what the heck is it and why would anybody want to use it?

Somehow, this contract seems invalid to me, or at least guaranteed to reduce PayPal use significantly by preventing it from being characterized in any meaningful way.

Re:Is it a payment method or isn't it?

[Anonymous Coward]

I could be wrong but I got the impression that this sentence is meant to say something like "you agree not to mischaracterize Paypal's quality as a payment method" and it's just poorly worded.

Re:Is it a payment method or isn't it?

[Blue Stone]

They mean, don't mischaracterise Paypal, not that calling it a payment method is a mischaracterisation.

I think they just don't want you to say Paypal is shit and doesn't do this or that, or gives the seller some disadvantage. I guess even if those things are true, they're claiming it as 'mischaracterisation'.

Bitcoin? Ether?

[WoodburyMan]

Sounds like all the more reason to switch over to payment in either Bitcoin or Either. Bitcoin first, however Either is generalized as more business friendly, with contracts and such being allowed. Dell, NewEgg, Overstock, and several other online vendors use it as a zero-cost alternative already for digital transactions. No PayPal fees, no credit card processing fees. Digital cash. Also works great for sending people money.

PayPal is not as good as other payment methods

[pubwvj]

I actively discourage customers from using PayPal because PayPal costs me money. I will continue to do so for this reason - it's truth. I pay no fee for receiving cash or checks, PayPal sometimes withholds funds, delays payments, makes life generally difficult and is insecure for me as the seller. When PayPal is on par with cash or a check, costing me nothing more and being just as secure for me the seller then I'll treat PayPal the same.

Re:PayPal is not as good as other payment methods

[Overzeetop]

All forms of payment cost money. Ever tried to deposit $50k at a national bank account? Fee. Have more than X number of checks per month. Fee.

CC fees are more, no doubt. BUT, for the consumer, having an intermediary like a CC is an enormous level should anything go wrong with the transaction. It's almost a mini-escow transaction, but where the buyer has an unfair advantage in the initial mediation - aka a chargeback. If it's a transaction worth more than $100 or so, there is almost no way I'll be paying with cash, except where it's a service or good covered by some other means of protection. You may be a great vendor, just as I think I'm also a great vendor (and I grudgingly take CC, too), but there are way too many shysters out there these days.

Re:PayPal is not as good as other payment methods

[Mandrel]

With these new conditions, if you still dissuade your customers from using PayPal, you risk having PayPal cut you off.

In Australia, it's illegal for companies to ban reasonable surcharges, so PayPal can't stop vendors adding a surcharge to recoup the PayPal fees, to prevent PayPal cross-subsidising other payment methods. But elsewhere they can impose this sort of parity clause that Amazon is so famous for, using their muscle to gain immunity from fee hikes, and as a way to make all sellers pay for buyer protection.

Re:PayPal is not as good as other payment methods

[JustAnotherOldGuy]

All forms of payment cost money. Ever tried to deposit $50k at a national bank account? Fee.

Bank Of America is a scumbag organization run by scumbags, but no, they won't charge me a fee for depositing $50k.

Call them yourself and ask them, "Is there a fee for depositing $50,000", and they'll confirm that they do not bill you for depositing money.

Foreign currency or wire transfers, maybe, but a US check for $50k or $50k in US cash will be accepted without a fee. It'll get you put on a watchlist, of course, but there's no fee for that either.

Re:PayPal is not as good as other payment methods

[mysidia]

OK..... Assume I want to not use Paypal..... How can I transact on eBay as a seller without getting a Credit card merchant account?

Re:Well, I'm covered then

[JustAnotherOldGuy]

"In representations to your customers or in public communications, you agree not to mischaracterize PayPal as a payment method. At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal; and, if you enable your customers to pay you with PayPal, you agree to treat PayPal's payment mark at least at par with other payment methods offered."

For something that's not a "payment method", they sure seem to bill themselves as a "payment method". They say it themselves: "if you enable your customers to pay you with PayPal..."

I mean, if I can pay for things using PayPal, is it not by definition a "payment method"? In what twisted-logic universe are they not a "payment method"?

Here's how you can tell if something is a "payment method"- you try and buy something with it and if you can, it's a "payment method".

:-P

[Anonymous Coward]

yeah well fuck potheads. drug dealing is still a federal crime. state govs are fucking stupid. when I read about pot sellers getting robbed, I cheer.

You sound like a wound-up, aggressive sort of guy. If only there were a substance that could help you chill out, man...

Ever heard of the "concurrence" ?

[Thanatiel]

Why would anyone pay more if there are several other, safe, ways to pay a shop?
Whenever I use a debit or a credit card, the transaction has to be authenticated with the bank using a small device.
PayPal will lose market share in Europe if it becomes more expensive.

Re:europe

[Proudrooster]

Maybe you are correct, but Ebay is a hot shopping mess. Descriptions, categories, titles are a mess. Make a typo on Ebay and you won't find your stuff. Make a typo on Amazon and you still gfindet your stuff. Ebay is sloooow and requires critical thought to sort through inconsistent listings. Amazon has a faster website which takes you right to the lowest price and has Amazon Prime. Order on Ebay, get it in a week. Order on Amazon, get it in 2-days.

Amazon is neatly organized and the ease at which you can buy stuff is far superior to Ebay. Amazon reduces the friction to buy with one-click ordering and now their Alexa product. Need to do a return? Amazon gives your money back as soon as the item is scanned for return while returns can be painful.

Amazon lets people harvest local deals, stuff it in a 50lb. box, then send it to an Amazon fulfilment center where they handle inventory and shipping. If you are a good harvester, you barely have to touch the product. Using Ebay you have to harvest the products, store them, inventory them, and ship them.

Amazon is clearly continuing to innovate while Ebay lumbers along playing constant games with fees.

For full disclosure, I am an Ebay seller and investigating moving to Amazon.

Paypal dying?

[roman_mir]

Just a couple of days ago I bought something on eBay and had to pay 520USD. To my surprise the system demanded that I had to contact PayPal customer support. Amazingly enough I was able to get through the maze of call answering menus and eventually had a human on the phone. She asked me to confirm the visa number (interestingly enough it seems they have the access to the unencrypted visa numbers) and eventually said I had to log out, log back in and try again. This time the transaction went through. I asked her what this was all about, she replied that they have to confirm large transactions ?????????? (520usd is a 'large transaction'???????) to avoid fraud. Immediately I thought that PayPal is in trouble. If they have to confirm transactions of that type and amount by hand, it seems to me their transaction costs have to grow significantly and they will become uncompetitive compared to visa and such. Seems to me PayPal is dying.