posted on October 6, 2000 03:09:49 PM
Auction Watch's weekly update report for October 5 contains a link that explains what PayPal defines as a "business user". This link explains that a business user is one that receives more that $500 in credit card sales in a six month period.
posted on October 6, 2000 04:08:44 PM
Having had a merchant account myself in the past, the credit card companies do charge the merchant (in this case PayPal) a fee for processing. However, PayPal does get use of any balances in the account (they don't pay us interest) so they should be able to come out way ahead. In my opinion, they are setting the mark too low...I can make $500 in one good yard sale. They should have set it up around $2,000 to be fair to their personal account users.
My auctions will state in the future that payments made through PayPal with a credit card will be charged a percentage of the final auction price, per PayPal new rules.
posted on October 6, 2000 04:16:09 PM
OK, since we are at this thread again, I have a question...
Business Use has totally confused me. Can someone actually quote for me, or give me a link to the page that says I will be charged by PayPal if I accept payments for auctions on eBay?
I keep searching, and I can't find anything definitive.
For reference, my eBay sales are about $50 - $100 a month (sorry, I have 3 other jobs) and my last 4 transactions were all paid with PayPal, all before October 1.
posted on October 6, 2000 05:57:29 PM
"a business user is one that receives more that $500 in credit card sales in a six month period."
NOT QUITE ... ANY account that recieves more than $500 in CC payments in a siz month rolling period is a "business". So the kid who gets $50 from 11 relatives is a "business", or he has to reject the money!
A person collecting money for an anniversary dinner or a club banquet could end up being declared a "business".
posted on October 6, 2000 06:08:31 PM
One thing you might try is to file a complaint at The Internet Fraud Complaint Center https://www.ifccfbi.gov/ It is operated by the FBI and the National White Collar Crime Center. I've considered doing it regarding their new definiton of "business". If they got enough complaints, I expect they would change their program. They accepted me in the beginning as a "personal account" and now I may be in a position that puts me in another category. After all, they advertised "always free"....
That should be the keyword but how would PP know whether it was sales or gifts? They don't! When your account reaches a certain point you either upgrade or refuse the money.
We are PayPal. You will be upgraded. Resistance is futile.
posted on October 6, 2000 07:35:19 PMMSEAL1,I agree with your assessment. The credit card companies do charge PayPal something which should be passed on to their customers--us eBayers. But to do so in the guise of a "business" definition of sales totaling only $500 in a six month period is rather out of line. Your suggestion of $2000 would be more correct, $500 per month would be even better.
posted on October 6, 2000 08:00:49 PM
I get $501 of CC charges in a 6 month period, I am a business and pay the fees, my neighbor gets $500 in charges, not a business and no fees.
posted on October 6, 2000 08:27:17 PM
I guess I'm still having a problem understanding why PayPal has decided upon a "dollar" limit to define a business, instead of going with a "number of transactions." Don't the credit card companies charge per credit card transaction?
From the AW Weekly Update:
"In an email sent to its users explaining the reasons for the new policy, PayPal said the goal of the $500 limit was to control the cost of credit card processing, which is expensive for PayPal. Spokesperson Vince Solitto declined to say how much Visa, MasterCard, and other companies charge for each transaction."
So who costs PayPal the most in transaction fees? Those who are receiving $450 in small payments for lots of items, or those who receive one $450 payment for a high-priced item? I guess I'm missing something, but a lot of what they are doing lately hasn't made much sense to me.
You're right that $500 of, say, 200 transactions @$2.50 each costs PayPal MUCH, MUCH MORE in CC processing fees than 2 @$250 or 1 @$500 does. That's why I fully expected PayPal to use the number of CC payments as the "guideline" for determining who is and is not a "business". Instead they chose a dollar amount, which will allow sellers of very inexpensive items to rack up quite a few transactions before reaching their "limit".
abacaxi used the term "rolling period" in regard to the $500 CC limit per six-months, and that's something that hadn't even OCCURRED to me. For some reason, I just ASSUMED that the "six months" would run from October 16th to April 15th, at which time the "limits" period would start all over again. So if you reached the $500 limit on October 28th, you couldn't receive any more PayPal CC payments until April 15th, at which time you would have a new $500 limit.
A "rolling six-month period" for the $500 limit would change things considerably. Only if you reached your limit on the FIRST DAY, October 16th, would you get a new $500 limit on April 16th. Everyone else will see their unused daily limit increase only by the amount that rolls off exactly six months earlier.
For example---on Oct. 18th you receive CC payments of $100, then $200 on Oct. 31st, then $200 on Nov. 7th. You're out of "limit" until April 18th, at which time you'll only get $100 limit back. You'll get another $200 limit on May 1st, and another $200 on May 8th. This means that almost no one will ever have the full $500 limit again, unless they don't receive PayPal CC payments for six months or more.
I don't see how ANYONE selling very much online could stay within the $500/6 mo. limit regardless which way it's figured. I think those willing to pay fees (who still TRUST PayPal) will upgrade, and everyone else will use other payment means, whether checks/money orders only or other payment services like PayDirect, PayPlace, ExchangePath, E-count, Billpoint, or whatever.
posted on October 7, 2000 04:20:03 AM
fritzdick - I agree that a $500/month limit would perhaps be better.
Something else I just noticed...with a PayPal business account you pay a transaction fee when people send money from an account that has a cash balance as well as from a credit card. Looks to me like the best strategy is for small guys is to only accept PayPal from people with cash balances in their account. Once you get into the business account category, any kind of transfer into your PayPal account is gonna cost you money.
posted on October 7, 2000 05:04:07 AM
In the past I have used paypal in two ways. One way was using the "send money" option when I was paying a friend for something; I did not check the "pay for an auction" feature. The other time was to pay for an auction and I used the "pay for an auction" button and filled in all of the auction info.
My question is will the $500.00 limit apply to both buttons or just to the auction button? Otherwise, if I send $700 monthly to my son at college I will be charged for this?
posted on October 7, 2000 05:48:32 AM
"My question is will the $500.00 limit apply to both buttons or just to the auction button? Otherwise, if I send $700 monthly to my son at college I will be charged for this?"
If you send more than $500 within a 6-month period WITH A CREDIT CARD, your SON becomes the business and must upgrade and pay $.25 and 1.9% to PayPal in fees on ALL MONEY from any source. The only other option is to refuse the money and ask you to send it in cash from your bank account. (SUX when tuition is due!)
Even if you send some from your bank account or paypal balance, as soon as the kid hits $500 in incoming CC payments he has to refuse the payments or upgrade and pay fees forevermore on ALL incoming money
posted on October 7, 2000 05:53:17 AM
Granee - You nailed it. I was willing to go along with the $500 thing, but this "rolling balance" is SUCH #*!@ that I can no longer stomach it.
Unfortunately, lots of my buyers use PayPal.
I guess I'm in a pickle. I will be trying hard to push other services now.
London4: your question demonstrates that the $500 limit applies to everyone, not just "sellers". In the next few months people will have their eyes opened (like, around Christmas time if relatives give them money as gifts). Many of them probably never got the email from PayPal about the changes so they'll have no clue.
