posted on October 7, 2000 06:34:32 AM
I hear everyone frantically seeking a replacement for PayPal, because of PayPal's new limit on "personal" accounts.
THINK - any service that is "free" today, probably won't be tomorrow, as Visa, Master, etc., do charge to use their service, and it cost services like PayPal and PayDirect and the like money to run your charges.
IF, sellers use the service, and quickly move their money out, then the service can't make money on the balances held in the accounts, therefore it starts hurting the financial base of the "free service" and they start charging.
If you have any grasp of business you have to realize none of these services can stay "free" long unless customers leave reasonable balances in their accounts - and based on human nature and it tendency to be untrusting and greedy, the money won't be left, and the service will be forced to charge.
Then while you are thinking about this, realize your customers aren't going to run all over the place, joining first this group and then that, just because it is free for the seller - the buyer doesn't care what it is costing you - that is your "cost of doing business," and not their problem. Some buyers may sign up for 2 services, but I don't see them running from service to service just because a few sellers want something for nothing.
posted on October 7, 2000 08:55:25 AM
You have to ask yourself why does paypal charge for non charge card transactions. It's because they intentionally deceived us from the begining. They figured we can LIE about it being free forever and USE everybody to get us a huge customer base. Once we are #1 everybody will have to "go with the flow". Well I don't think so. I think they are loosing customers left and right and justly so. This is a tremendous opportunity for paypal's competitors! And a tremendous opportunity to make some more refferal bonus's. All the folks that aren't signed up for payplace means that I'm rolling in refferal bonus's again!
posted on October 7, 2000 09:31:56 AM...realize your customers aren't going to run all over the place, joining first this group and then that, just because it is free for the seller...
Probably not, but if it gets to the point where many (or most) sellers begin to pass these fees on to the buyer, I'd bet that would change in a hurry.
posted on October 7, 2000 09:47:07 AM
Let's get out the old crystal ball and gaze into the future......
Six months from now we have a new slew of outraged posters complaining about all of these new auction payment services that were once free and now charge. Let's face reality, there is NO business model that can support providing free services when those services cost money to provide. Everyone of these services will eventually charge you fees. They are just waiting to have enough registered users to insure their survival after the "I won't pay for that" crowd bails out.
Personally I think that those that think they can pass on PayPal's fees will lose sales as a result. They will more than likely be viewed by the average bidder in the same category as those that impose excessive shipping/handling fees.
When PayPal ceases to be the dominant payment service of choice I will drop them. Until my customer base insists on these alternate services I see no point in using them. The seller is the tail of the dog. Trying to wag your customers into using a payment service because it is free to you will probably be a losing cause.
posted on October 7, 2000 09:58:28 AM
I think you're missing the point ... completely. The issue is not about fees. Everyone agrees Paypal fees are fair. (Although there ARE free services, several of them.)
The issue is that Paypal came to this forum and lied to us, lied to our faces. The line "we've always said free for personal accounts" is so much HOKUM. If you feel comfortable doing business with a company like that (and accepting LIES as part of the cost of doing business), that's fine. I do NOT.
posted on October 7, 2000 09:58:59 AM
One of the biggest anti PAYPAL posters on this board, states that it was going to cost him over $200 per month in PP fees, @ 1.9% thats over $10,000.00 a month in credit card sales alone, or $120,000.00 per year. This not Grandma selling her hummel collection. This is a full blown business, and should pay the fees! Its sellers like this that caused Paypal to change their TOS. And they will cause the other sites to do the same. Paypal asked us to be honest over 2 months ago, and many of the high end sellers did not change. So now the forced conversion. Ed
edhdsn
[ edited by edhdsn on Oct 7, 2000 10:04 AM ]
posted on October 7, 2000 10:11:38 AM
Edhdsn, that was me that made that comment. A full-blown business out to rip off Paypal? Because I didn't upgrade, they're forcing everyone. Yeah, right.
Take 400 sales per month, multiply by a quarter, then add the 1.9%. And yes, it's significant because most of my sales are around $10 bucks.
A while back I trimmed the fat from my eBay auctions. I was paying them too much. I cut out the bold, featured, dutch ... everything. I'm saving $500 per month, and through more aggressive listing, have increased profits by 50%.
I'm not going to waste that money on Paypal. No way, Jose
posted on October 7, 2000 10:13:28 AMTwinsoft, I understand completely the current outrage over the lying issue. I guess it doesn't inpact me that way because I never believed that the business model could work. When I signed up with PayPal I did so with the knowledge that the free lunch was only a temporary phase. I guess my attitude is more of "they finally woke up" than it is "they lied to me."
I think that the biggest error on PayPal's part was the belief in their own business model. That caused them to make patently stupid statements that used the word "never". When they were merged/bought-out with/by X.com we saw a reality check on a flawed premise. The policies were revised because they had to be, either that or shut the doors.
My reasons for using their services haven't changed.
Dr. Beetle
[ edited by DoctorBeetle on Oct 7, 2000 10:18 AM ]
posted on October 7, 2000 11:00:25 AM
twinsoft: Yes you and about 200,000 other users that failed to play by the rules, 400 sales per month, is not a personal user, and has never been according to the PP TOS. You and your freinds caused this to happen, and will have the same actions happen in other venues Ed
edhdsn
posted on October 7, 2000 11:05:09 AM
No edhdsn, a stupid and unsustainable business model caused the PayPal situation. It doesn't take a genius to see that there is no financial incentive to keep funds in a non-interest bearing account. I never kept any funds in my PayPal account. Why should I? I immediately transfered all payments to my bank account where they earned money market rates.
If anything it was users such as Twinsoft that theoretically should have made PayPal profitable if their business model was valid. High volume sellers would cause larger sums to flow through PayPal therefore increasing the money earned on the float.
Dr. Beetle
[ edited by DoctorBeetle on Oct 7, 2000 11:07 AM ]
posted on October 7, 2000 12:19:45 PM
Once again, with emphasis: Fees have nothing to do with it!
If you can feel comfortable dealing with a non-FDIC-insured "financial institution" that has changed its TOU, what, about half-a-dozen times now, summarily breaking/making promises in the process AND that has full access to your checking account ... then you're a more trusting (or naive) person than I.
To achieve that same comfort level, I'd have to:
1. Open a new checking account at a bank other than the one I currently use.
2. Sweep my paypal balance daily into the new account.
3. Retrieve the funds from the new account as soon as they're posted.
4. Deposit them into my original business account at the other bank.
posted on October 7, 2000 05:04:50 PM
Edhdsn, you need to get deprogrammed. I NEVER claimed to be a personal user and I did "play by the rules." Paypal one day saying "we will never" and the next day saying "we must" is not playing by the rules.
Excuse me, I "caused" Paypal to raise its fees? Gee, I referred a hundred customers to them. You'd think they'd want to thank me. Oh, well...
DrBeetle, what you seem to be saying is that it's okay for a business to lie, as long as there's a tiny disclaimer hidden somewhere within the many pages of their terms of use. That's what happened here. Let's face it: It's not as though Paypal suddenly woke up one morning and realized they couldn't afford to do business. Can anyone believe Paypal thought, "Hey, let's give everyone $10 bucks to join and we'll HOPE they keep the money in their account?"
Paypal's plan all along was to introduce a new service, and quickly gain the lion's share of the business. Then, when everyone's "hooked," replace the bonuses with fees. Is it a coincidence they are "forcing the upgrade" just before Christmas?
All of this I could forgive. But not being lied to by Paypal. Do you recall just a week before the "new rules" announcement I asked Paypaldamon POINT BLANK if there were any plans to LIMIT BENEFITS OF THE PERSONAL ACCOUNT? Paypaldamon was spouting the company line of nobody being forced, yada yada yada. I posted that I just wanted to give Paypal one last chance to come clean and tell the truth. They did not do so. Paypal knew full well at that time exactly what their plan was, and they were playing the old "we may do this and we may do that, but we will never ...." I have had it up to here with their lies.
posted on October 7, 2000 05:21:59 PM
No Twinsoft I don't think it is okay for a company to lie. A lie is false information presented with an intent to mislead or deceive. If PayPal intended from day one to charge fees after garnering a large customer base then they are indeed liars. If PayPal truly did beleive that they could make a go of the business based on earnings on fund float, found out later that they couldn't, and then adjusted their business model then they didn't lie (i.e. lack of intent to deceive).
I can't say which case is true. I have seen the company do some incredibly stupid things as evidenced by how they handled the introduction of fees. Announcing a new policy before it has been thought out is just plain stupid. People that do things that dumb may very well have beleived that they could float the company on float.
As far as Damon's statements go I don't automatically assume that he wasn't given the information peicemeal just as we saw it develop. I have seen many a customer service representative screwed by policy changes and incomplete information given to them by their own employer.
But be all of that as it may, each will make their decision according to their own beliefs, and rightly so.
posted on October 7, 2000 08:46:12 PM
I was a paypal cheerleader and still accept it but with great nervousness. I never expected that they would stay free. But what I see is a company that doesnt seem to know what the ### they're doing. As long as they allow folks to make $1 transactions and ask for a check every time there's a buck in the account, they can't possibly be making money, even with the 1.9%. So what happens next month? It goes up to 3% then 4 then 5? Fees on every withdrawal?
They made a promise to never access seller's bank accounts and we have already seen a few posts about this happening. Sure, some of them were probably not accurate, but ALL of them?
They made promises about fraud protection. So far I have seen a number of posts and know personally about buyers who were cheated by paypal sellers and PP says there's nothing they can do. I'm talking where the seller sent NOTHING, not where there was a dispute. And the seller's account is still OPEN! I also heard of buyers paying sellers with stolen credit cards and the SELLER'S account gets frozen! The seller has no way to know! Paypal did the verification. The seller has no way to refuse a payment (a feature we asked for months ago).
When I accepted credit cards, I had to verify my buyers and it was MY decision if I should continue with the transaction. When there was a charge back attempt, I was contacted and given a chance to offer a rebuttal. This does not happen when you use Paypal. Instead you find your account frozen, sometimes money is taken from your bank account (Paypal's weasel words: we didnt access your account, we just reversed a payment that we made three months ago) and sometimes your paypal history is erased so your proof is gone. All this with no email or phone call explaining why. And when you call them you get stonewalled for weeks. Is Damon the only employee working at Paypal?
This is very poor for a company that we are supposed to trust with our bank accounts. I am encouraging my customers to use other services and telling them that I can not accept PP for large amounts and only if the buyer is verified, which many arent. http://www.ygoodman.com [email protected]
posted on October 7, 2000 09:25:21 PM
Napster offers free music exchange and they are fighting tooth and nail to keep it free. So yes there are free lunches. Also, Yahoo is one of the few successful sights that runs mainly on advertising revenue. However, Paypal's business model for personal accounts sucks plain and simple. Transaction costs of earning interest are too high which outweighs the float revenue.
The cap of $500 is ridiculous. If Uncle Fred liquidates his lifetime baseball card collection worth $50,000 over a couple months, now paypal considers him a business and needs to upgrade despite that he never intends to do anymore selling?
I feel paypal has sucked me with the free transactions and is now strong arming me to upgrade. They are informing paypal users that if a seller is unverified, the seller may present a risk. Yea, that is good business sense. Tell the buyers that some of their members may not not honest. Way to support the very members who have been with them from the start (and providing 100% honest transactions)! They're also saying personal accounts can't earn referral bonuses. Thinking about adding in my EOA emails, I will say "I don't recommend paypal because they are deceiving and coniving, but I do accept it for your convienance."
