What's the deal with PayPal?

Factual Questions
1

Maybe I want to set up a PayPal account to let me pay for things on Ebay that say “PayPal only”. I see there are other possible uses including accepting payments but I’m not asking about that, just the basic and perhaps commonest ability, to pay people for Ebay purchases.

But, it sounds suspisciously like this will cost something, and I can’t find out how much.

According to the PayPal web site, it doesn’t cost anything to deposit money to my PayPal account or to send money to friends. Following links about How does PayPal make money, and What is the fee schedule, gives what sounds like vague information that skirts the issue of whether they charge me to use their services to make purchases online.

It’s not so much that I don’t want to pay for a useful service - that would be fine - but I don’t like how mysterious their charges seem to be, at least until one actually sets up the account.

Can anyone enlighten me?

2

You don’t pay anything to pay for something with PayPal; the seller pays a small fee for using the service.

3

I have used Pay Pal for several years and there is no charge to use them unless you sell something on e-bay. It used to be there were many many seller that didn’t want to accept pay-pal from buyers. I don’t see as many today.
I use their debit card and its a good way for me to control the plastic, and again no charge to me.

I do miss their bill pay, but I can use the debit card the same way today as long as who i pay accepts master card.

In fact with the debit card you must have a credit card account to enroll, But after I had it I wasn’t using my credit card and was paying fee’s on top of fees and I closed out the credit card and only use the pay pal card and no fee ever. Just keep a “+” balance in the pay pal account :wink:

4

>…with the debit card you must have a credit card account to enroll…

Really? I have to get a credit card first? Even if the way I use PayPal is to deposit money in advance and then gradually use it?

Any idea why?

I have debit cards but no credit cards or unsecured consumer debt. Would they want me to?

5

[QUOTE=Gbro]

In fact with the debit card you must have a credit card account to enroll…
[/quote]
No. A debit card is tied to a bank account.

I have no credit cards anymore (except for an oil company), but when I opened a checking account, they gave me a debit card without asking.

6

[QUOTE=Napier]
Can anyone enlighten me?
[/QUOTE]
I find Paypal is used many online places. It’s quicker and easier to complete a transaction and I don’t have to have my card number.

One way they make money is off of the interest they get from your non-interest bearing deposit. However, you don’t have to have anything on deposit with PayPal, as they will extract it from your bank account if the amount requested is greater than your deposit balance.

7

[QUOTE=Napier]
It’s not so much that I don’t want to pay for a useful service - that would be fine - but I don’t like how mysterious their charges seem to be, at least until one actually sets up the account.

Can anyone enlighten me?
[/QUOTE]

The deal is you get charged nothing. You need a debit card; that is, you need a card that looks like a credit card (Visa or Mastercard) but is actually tied to your checking account. The seller pays, not the buyer.

By the way, that’s how it is with all credit cards. You don’t see any extra charges for paying with a credit card (other than interest on your account). The seller pays a fee. The seller negotiates the fee structure with the credit card company. Most sellers that offer credit card transactions absorb that fee as a cost of doing business.

Some don’t. For example, there’s the outdoor equipment retailer REI. It started as a co-op so that climbers could pool their money and buy equipment in bulk. The left-over money they made from reduced prices was distributed as a dividend. Your portion of the dividend was proportional to the money you spent through REI.

REI still does this, but it subtracts out a percentage of the money you spend if you do it by credit or debit card. For example, if you buy $200 worth of equipment by cash or check, you get back roughly $20 every year, but if you use a credit card you get less. REI is simply covering its credit card charges.

8

I’ve got an additional question here: PayPal like you to set up your bank account as the premier source of funds, but you can use your credit card. It just seems to default to your bank account (because, I guess, it’s cheaper for PayPal).

If you use your credit card inside PayPal, do you get the same sort of protection from your credit card company that you get using your card outside of PayPal? Because I have this slight suspicion that PayPal can be…a little cavalier with your money if they want to.

9

[QUOTE=NineToTheSky]
If you use your credit card inside PayPal, do you get the same sort of protection from your credit card company that you get using your card outside of PayPal? Because I have this slight suspicion that PayPal can be…a little cavalier with your money if they want to.
[/QUOTE]

I would think so. The ultimate source of truth would be your credit card company.

I have never had problems with PayPal, ever. The problems I’ve heard about come from identity theft, not PayPal itself. I know a woman who refuses to use PayPal because of this. She claims that she was ripped off by PayPal. This is a woman who is the most profligate and unthinking spender I have ever met! :smack: Thieves have surely had ample opportunity to rip her off, and no wonder PayPal was one way.

She’s also extremely stubborn and defensive, so trying to tell her how to protect herself is like trying to take to a frozen hog.

Just a thought, but if PayPal was a thoroughly unsafe, you’d hear about it, especially when every loss of personal data on stolen laptops hits the news.

10

[QUOTE=633squadron]
Just a thought, but if PayPal was a thoroughly unsafe, you’d hear about it, especially when every loss of personal data on stolen laptops hits the news.
[/QUOTE]

Agreed, but I’ve had one bad experience. I have a 100% rating on ebay, and have had no problems or queries about my financial probity. I always keep a zero balance. I got an email from PayPal saying that they were freezing and investigating my account, and would if necessary withdraw a specified amount (of hundreds of £s). They said they had the right to do this. They gave no reason.

I sent off many emails trying to find out what was happening. All I got were standard emails, not relating to my situation and offering no further information. Eventually, after several months, they said they had sorted out the issue, and unlocked my account. No apology, no explanation.

I find that scary and totalitarian.

11

[QUOTE=NineToTheSky]
Agreed, but I’ve had one bad experience. I have a 100% rating on ebay, and have had no problems or queries about my financial probity. I always keep a zero balance. I got an email from PayPal saying that they were freezing and investigating my account, and would if necessary withdraw a specified amount (of hundreds of £s). They said they had the right to do this. They gave no reason.

I sent off many emails trying to find out what was happening. All I got were standard emails, not relating to my situation and offering no further information. Eventually, after several months, they said they had sorted out the issue, and unlocked my account. No apology, no explanation.

I find that scary and totalitarian.
[/QUOTE]

I sold a oscilloscope current probe on eBay last year for $600. It was sold untested and AS IS, in big 20 point letters in the ad. I discussed this with the Australian buyer specifically before he paid and I shipped it.

Lo and behold, it didn’t work. The seller sent me an email with pictures proving that it didn’t work. I told him where he could get it fixed close to him, and how much it would cost ($100 or so).

A few days later, he opened a complaint saying that he never received the probe!! PayPal froze my account, and took $600 out of my bank account! After what seemed like a thousand emails and phone calls with the case manager, including the pictures the buyer sent me proving that he had the damn thing, PayPal went with his side because I didn’t use a tracking service (USPS didn’t offer it to international shipments).

I tried after that to cancel my PayPal account, but I couldn’t. I couldn’t even take off my credit card and bank account…

eBay now forces me to accept PayPal on my auction listings, but I make it clear in the listings that I will not accept it and will refund any buyer that uses it to pay me. PayPal will never get another dime out of me.

12

[QUOTE=Musicat]
No. A debit card is tied to a bank account.

I have no credit cards anymore (except for an oil company), but when I opened a checking account, they gave me a debit card without asking.
[/QUOTE]

The way paypal explained it to me was; without a credit card my account isn’t backed up. They want to protect themselves from loss by putting any over drafts on your credit card.
I too had a couple of mishaps with pay pal when I bid and won items and didn’t have funds in my on line account to cover them. I added funds and paypal pulled the nessesary funds out of my account before my added funds were processed. resulting in 2 withdrawals from my bank account.
But my bank gave me a call. I let it go through as I was paying bill through pay pay anyway.
Now the debit card(paypal) just doesn’t seem to work that way. The funds must be in the on line account or a credit card must be able to back it up or the transaction is denied. At least that is the way i understand it.
Another thing, when I replaced the debit card that was scratched my account was closed and it was a 2 weeks before I was reissued because I had canceled the credit card.
And I couldn’t get a second debit card for that account again because they view it as unsecured.

13

[QUOTE=Gbro]
The way paypal explained it to me was; without a credit card my account isn’t backed up. They want to protect themselves from loss by putting any over drafts on your credit card.
[/quote]
Gbro, I’m sorry about your bad experience. So far, I haven’t had any with PP.

I don’t think PP cares where they get their backup, just that you have one: credit card, debit card, bank account, gold deposits, cheese mines, as long as they have easy access.

I think the term “credit card” may be a loose one, and is sometimes used for any card and/or number that can be used to transfer funds. I have a debit card. It looks just like a credit card. I can use it wherever a credit card can be used. It’s possible a knowledgeable recipient can tell if it is credit or debit – I don’t know. Certainly it’s not obvious to the uninitiated from the number or card appearance.

My PayPal account is tied to one of my bank accounts (not to a credit card). Although I usually keep a few hundred dollars balance in the PayPal account and refill it “manually”, once I made a purchase for more $ than the PP a/c had, and the difference (exact amount) was instantly deducted from my referenced bank account. (Which makes a mockery of PP’s claim that it takes 3-5 days for any transaction to complete. If they want it badly enough, they can do it faster than a speeding bitmap.)

14

Hmm. Sounds like starting a PayPal account tied to a small-balance checking account and, if they want, a debit card on that account is a reasonably safe way to go for making ebay purchases.

I wonder why PayPal is advertised as “the safer, easier way to pay and get paid”. In what way is it either?

For example, Musicat said “It’s quicker and easier to complete a transaction and I don’t have to have my card number.” Don’t you have to have some kind of PayPal identification number and/or password instead? Many sites that I buy from with a debit card just charge the card by default, like Amazon. How can PayPal be easier than that?

15

[QUOTE=Napier]
For example, Musicat said “It’s quicker and easier to complete a transaction and I don’t have to have my card number.” Don’t you have to have some kind of PayPal identification number and/or password instead? Many sites that I buy from with a debit card just charge the card by default, like Amazon. How can PayPal be easier than that?
[/QUOTE]
The easiest of all is the Amazon One-Click. I love it.

But if you are accessing a new site that doesn’t have your info, all you need to pay is your PayPal password (I think your computer’s cookies supply the PP name, but of course in a public computer, you’d need that, too). And you can choose your PayPal name so you can remember it. You can’t choose your card number.

One entry for a purchase.

In contrast, for credit/debit card, I need to enter: full name, address, (long) card number, special digits on back of card, kind of card (MC, VISA, other), expiration month and expiration date. If any of these are entered wrong, it probably won’t go thru, and many sites prevent you from backing up (“session expired”) or if they do, you typically have to re-enter ALL of the info from scratch (bad programming, I know, but that’s the way it is).

And PayPal sends you an email of the transaction. My card company doesn’t (altho the merchant usually does).

16

I’ve just set up a PayPal account for an industry group I’m treasurer of. As said, the seller pays the fee. If you are interested, go their web site and look up merchant accounts, where the fees are spelled out.

The good thing about it is that setting up the account is free, the charges are quite reasonable, and they supply you with the code to put the “pay now” button on your web site. I don’t want to be responsible for securing people’s credit card information, and with PayPal I don’t. The links worked first time. You can encode it so the amount can’t be hacked, but since we are only selling memberships, I haven’t - and it was nice to make the membership amount $1 when testing the site.

My only problem - crappy customer service. We’re a nonprofit, and they didn’t believe us. It took multiple go-rounds to convince them, and it just got resolved today. You can’t send them email or Word files - the only thing they take are faxes or cgi files of a document - which is a real pain.

17

>You can’t send them email or Word files - the only thing they take are faxes or cgi files…

This is a bizarre twist, groups that are in the forefront of some kind of technology yet won’t process electronic information in a mainstream way. Just the other day I got asked to give a reference for somebody seeking the PE (professional engineer) title, and suggesting I reply electronically. The organization sent me an email with a link to a form to fill out, but the form just displays text and lines, appearing to be a read-only web page. I couldn’t find any way to type onto the lines. Eventually I found I could cut-and-paste the content of the form into Microsoft Word and type my answers into the spaces with that. So, I replied by email with the Word document as an attachment, saying what I’d done and asking if they could use it.

The reply was that they could, but most people print the web page on paper, handwrite their answers, scan the page, and reply to the email with the graphic file as an attachment.

Handwriting on paper and taking a digital picture of it is “replying electronically”?

18

Please, No need. that was a very temporary glitch and it was my fault for closing a credit card account that I had (required) used to start my Pay Pal Debit card.
I think it is important to note that a pay pal account like I and gazilion’s of others use to buy on e-bay and other places is not a debit card account. They do use the same sign in and the same on line balance but the enrollment is separate.
With the debit card(master card) I have found ATM’s that I wasn’t able to make a transaction at and another down the street went right through.
I am a real NewB with atm machines so It is very possible I made a mistake.(the atm new me by name and turned me down :smack: