I’ve used paypal a few times, to buy stuff. Things went through just fine, without any problems. I really didn’t have any opinion about them. But reading a thread, I heard multiple people refer to it as evil and bad. Why?
I know in my case, my hostility is really directed at eBay, Paypal’s parent company. A few years ago eBay decided to “enhance the shopping experience” by removing the preset option to accept checks or money orders, then changed that to flat out saying “we’ll remove your listing if you even mention checks or money orders in the listing anywhere. But you can take Paypal, which we just so happen to own. And even though Paypal used to be free, now Paypal automatically changes 25c to process an eBay transaction, so we’re double dipping on the fees. Sure, you take accept one of Paypal’s competitors, if you can scroll through the zillions of screens to figure out how to do it. This way we can claim we don’t force people to use our subsidiary and won’t get hit with an antitrust lawsuit.”
Also, Paypal is free to use for bank account transfers. They charge a fee to handle credit card transactions, which is fair, since Visa/MasterCard/Amex is charging Paypal. However, if you accept credit cards via Paypal, ALL transactions, including the bank ones which don’t cost them a thing, get hit with a fee.
They used to have this super annoying default to your bank account (more profit for them), then 2 screens of “are you sure you want to use a credit card? We get a higher margin if you do the bank transfer” “No really, bank is better” Then they hit you with a double-negative question to try to trick into using your bank account anyway. They finally ditched that pain-in-the-ass, but it was enough to leave a bad taste in my mouth.
So, while I wouldn’t consider them evil, they do enough nickle-and-diming shit to be extremely annoying and worth bitching about.
My understanding is that it’s not usually buying, but selling where problems happen. And that the biggest problem is if you leave money in your account (which sellers have to do, at least for a short period.)
I haven’t had any problems with it either.
I’ve only bought things with PayPal and have had no problems, so I’ve been as mystified as the OP.
I fell for the “use a bank transfer and enjoy Paypal’s guarantee of security” or whatever it said (it’s been awhile) and the “seller” never sent me the $300 item. They had some excuses and then stopped responding entirely. I had to wait through the Paypal dispute process and hope I got my money back, but I didn’t as they’d cleaned out their account. According to Paypal, this meant “sorry, insufficient funds to pay the claims and you get nothing.” So, basically the security of using your bank account to send money straight to the seller means security for Paypal that you don’t have the option of a chargeback, they just take their fee for facilitating a scumbag. There wasn’t anything I could do, and it is the only time I’ve been scammed, but I learned a big lesson. And yes, a bit bitter about Paypal’s role in the whole mess, as the screens mentioned by the poster above make a big deal about how the only way you are guaranteed your money back if things go sideways is to use the bank transfer, and that is just a flat out lie. Paypal will do nothing beyond their automated dispute process and if there isn’t enough money in the paypal account, you will not get your money back and that’s it. No recourse. If I had used my credit card, Paypal would have just been the processor and the merchant would have appeared on my statement and I could have initiated a chargeback. My account would have been credited with the funds and they would have pursued the slimebag “seller”
I still occasionally use paypal, but only to pay flickr or wordpress or the like, i.e., established companies. I haven’t bought anything from a small business online since then that hasn’t been a digital download. It’s a bummer, but the experience made me feel very frustrated and helpless, for lack of a better word.
The fees themselves (both on eBay and its partner company PayPal) really start to rack up to a large percentage of a transaction for small amounts.
Let’s say I’ve got a widget I want to sell for $8 + $2 in shipping.
I put a Buy It Now (BIN) into the system and the setup fees are fifty cents.
I sell the item. eBay then takes 12% of my BIN price.
I mail the item. I hope I judged that $2 correctly between packaging and postage because I can’t go back to the buyer saying “oops, I need more money.” So mark it too low and you lose money just putting it in the mail. Mark it too high and no one buys it because your shipping price is outrageous.
Now PayPal comes in. 2.9% of the entire transaction + a 30 cents base cost just for giving you the time of day.
So $8 + $2 = $10 gross profit.
.50 BIN fees + .96 eBay fees + $2.00 shipping costs + (.30+.29 PayPal fees) = $4.05 in total fees
$5.95 net profit. All the fees in total = 21% of your total gross profits. That’s a significant chunk of change.
Now imagine you want to sell something for $2. Let’s say you want to sell lots and lots of things for $2. How much of a percentage is a 50 cent base cost and 30 cent PayPal fee going to run you? Should you even bother?
They keep freezing accounts: http://www.escapistmagazine.com/news/view/103385-PayPal-Freezes-750K-in-MineCraft-Devs-Account
They are not a bank, and you should not leave money in there. Otherwise it’s an ok way to get paid if you don’t mind the fees.