posted on January 23, 2001 10:45:23 AM new
Just received this from PayPal. Seems they've changed the rules once again.
[i]"We are sending you a reminder that you are approaching your PayPal credit card receiving limit.
"In order to reduce the cost of processing credit card transactions associated with accounts that do not pay fees, PayPal has introduced a limit on Personal Accounts:
a $100 per month limit on receiving credit card payments.
"If you upgrade to a Premier Account, you will receive a range of premium features in addition to the ability to accept unlimited credit card payments. And the fees on
incoming payments are low – just 1.9%* + 30¢ to receive payments."[i]
Nice of 'em to let me know ahead of time. BTW, what does it take to qualify for a REAL merchants account for CC use?
posted on January 28, 2001 08:48:45 PM new
Actually it is called "the cost of doing business".
Most auction sellers wouldn't last a week in the "real world" selling. It seems everyone is looking for a "free" auction site, "free" posting software, "free" merchant accounts, "free" shipping supplies, free anything and everything and we are going to whine to no end if we have to pay one cent over from free. NOTHING is free. In the "real world" you have major expenses...i.e., building rent, electricity, equipment expenses, various taxes, zoning laws, advertising, etc...etc...etc. If some of these people tried to run a business the same way they try to sell on internet auctions sites...they would be laughed right out of business. The PayPal and BillPoint 1.9% fees (1.75% for BillPoint, I think) are very reasonable for a merchant account. When I first started selling on ebay, my wife and I looked at getting a regular merchant account so that we could accept VISA credit cards. The lowest charge we could find was 2.5% plus around 25 cents for each transaction. We found as high as 5% plus 35 cent per transaction. Some of them wanted up to $1000 for the software to take internet orders. And other services would not even let us take orders either over the phone or from the internet! Needless to say, we passed. When I found out about PayPal and BillPoint and their very competitive rates, I was just tickled pink.
lswanson...good luck on getting your "real" merchant account. I think once you shop around, you will find PayPal and BillPoint look pretty good for rates.
posted on January 28, 2001 08:57:21 PM new
Just let your buyers know that you will only accept payments from Paypal if they don't use their Credit Cards.
posted on January 28, 2001 09:16:56 PM new
firesteel: Amen! Amen! Amen!
lswanson: The PayPal policy is for PERSONAL accounts. It was their mistake not to diffentiate from the get go between personal use and business use. Using it to receive more than $100 of credit card payments per month is a business use and should be charged accordingly. Even the IRS will be calling someone a business if they have more that $400 in income/sales in a YEAR.
$100 a month is a reasonable amount for people to be paying to each other on a personal basis for lunch tabs, babysitting and spot loans.
posted on January 28, 2001 10:19:02 PM new
lswanson: re: to become a REAL CC merchant
It's fairly straightforward. All you have to do is: set up a business checking account ($15+/mo), set up a DBA for yourself (fee for name search), get set up on the front end (cc swipe machine ($200-$400) or software ($200-$500)), get someone set up to process payments for you (2-5% of sale plus monthly minimums plus application fee plus numerous other fees), set up a toll free number or a secure website to take people's CC#s securely, etc., etc., .....
Or you can just stick with paypal.
IN all seriousness, the cheapest payment system I have discovered had 25 cents plus 2.3% per transaction, $10.00 monthly fee, and $185 startup cost for the cheapest terminal (swipe machine). The user is responsible for capturing the CC#s in some secure manner, and dealing with all the other issues such as chargebacks, etc.
posted on January 28, 2001 10:26:45 PM new
Wbbell-
You are perfectly right in what you say. I owned a large store, and couldn't believe what it cost to set up a VISA/MC/Discover terminal/acct. There's one difference between those Merchant Accounts and PayPal, though, which you might think is negligible, but I don't- those Merchant accounts never promised to be FREE FOREVER, and PayPal did.
I sorta would like people AND organizations to keep their word like a contract, even though I've long since given up EXPECTING them to do so...
posted on January 28, 2001 10:31:10 PM new
wbbell,
I'd forgotten about all those other charges when we were looking for a merchant account! The per month charge and the swipe machine charge were additional charges that we don't have to deal with on BillPoint or PayPal. Although I think the cheapest software package we found was $495. Most of them were around $995.
Like I said...BillPoint and PayPal is a steal for what they charge.
posted on January 29, 2001 05:38:46 AM new
tentwentytwo - re: free forever
You are correct on that point. I do very well recall Paypal saying it would be free forever. They always tell us in their fee increase announcements that they are still cheaper than every other solution - which is true. But they can't expect millions of users to just forget that little promise made.
I am all for paying the fee for the service rendered. But PP were free for nearly a year and seemed to be making money just fine. Just seems like greed to me.
I remember many years ago, McDonald's did a marketing campaign where they promised cheeseburgers would be 99 cents forever. I have been waiting for the moment that they increase the price. (I'm not quite sure what I'll do about it, though... )
posted on January 29, 2001 06:01:10 AM new
You can find better deals than mentioned above on internet merchant accounts and checking accounts.
My business checking account costs $2 a month (with a major bank).
My merchant account charges 2.39% + 25 cents per transaction. NO swipe machine or software fees required. $149 application fee.
There are better deals out there, too. Some folks on this board have found them.
posted on January 29, 2001 06:53:44 AM new
Thanks for the feedback, all.
Let me make one thing clear, I wasn't griping about the cost of doing business. I run the technical services for a large medical facility and my little circus clears 9 figures a year with only 6 technicians. We've even managed to maintain productivity levels at a constant level over the past 5 years despite a 50% reduction in personnel and the onslaught of HMOs, Medicare, and reduced reimbursments. I've been drafting and implementing business plans for the past 7 years and I damn well know the cost of doing business and certainly don't object to it.
As stated in a post above, what I object to is the fact that PayPal keeps changing the rules without notifying its users up front. I do eBay as a hobby only, and so far have only used it to clear items out my house. The concept that a personal user can't use ayPal for more than $100 in any given month is absurd. What they are effectively doing is forcing personal users to become Premier account users. How many eBayers only sell one or two high-ticket items a year?
Too, the idea that PayPal would go out of business without charging fees is misleading. I've been with PayPal almost since their inception. I even bothered to contact them and asked them about their business plan, particularly how they were going to make an income. They were open and polite in replying. The original business plan was to generate income on "the float", i.e., interest would be generated on the funds that users left in their accounts before transferring them out. In addition, revenue from advertising would be generated. If you consider the amount of money that PayPal has on account at any given moment, it's safe to assume that PayPal's original business model would have made them plenty of money. Either they found that it didn't, or they found that with a captive audience, even more money could be made. I think the latter is more likely.
Again, my beef is not that they charge, but that they only change the rules and inform the user mid-stream. Currently, 70% of my buyers use PayPal. I won't be switching until something actually breaks. However, as long as I'm paying for services, I will now definitely shop around for the company that provides me with the best service. When it was free, I didn't have the right to complain. Now I do. Although they may be cheaper, I will definitely look into the likes of Billpoint and others to find a service that verifies the credit card holder and user as being one and the same. Too, I'll look for a company that doesn't freeze sellers accounts because of undocumented complaints of a dissatisfied buyer (mind you, I've not had one yet).
posted on January 29, 2001 07:04:33 AM new
vargas
Yes that is a better deal than what I ever found when I was looking around. However, it still does not beat PayPal or BillPoint. And the great thing about BillPoint is that it will integrate right into my ebay auction ads.
PayPal integrates somewhat, but none of the other services I looked at would let me do what I can do with BillPoint or Paypal.
posted on January 29, 2001 08:28:25 AM new
I think the $100 / month limit is way to low. I mean think about. You make one auction sale in your life, if it's over $100, sorry, you're a merchant now. I can understand the limits but I think something like $600/6 mo or something similar would be much more appropriate.
posted on January 29, 2001 07:32:47 PM new
>>The PayPal policy is for PERSONAL accounts. It was their mistake not to diffentiate from the get go between personal use and business use. <<
They did, but it was buried somewhere in the TOS or FAQ. I remember checking it back when I first signed up for PayPal, ages ago, and it said something like "PayPal is for personal use only. We're working on a business plan but at the current time we can't accommodate merchant users."
Since then they've put business plans into place, of course. Their mistake was not to make it loud and clear that the original PayPal was personal use only. They made the mistake of assuming that people will read every word of the FAQs and TOS, which I'm sure everyone here knows is a dangerous assumption.
--- edited to fix a sentence that implied something different than what I meant
[ edited by litlnemo on Jan 29, 2001 07:34 PM ]
)