posted on October 3, 2000 04:56:03 AM new
When I signed up for PayPal, I was told that I would NEVER have a fee for using this service. Please read the below e-mail I just received from PayPal:
Dear PayPal Customer,
Three weeks ago, X.com posted a message on its website to remind PayPal users of our business use policy. Specifically, our terms of use require Personal Accounts who conduct e-commerce on a regular basis" to upgrade to a Premier or Business Account. We further defined "business use" of a PayPal account as collecting payments for goods or services sold on a corporate website, personal homepage, or other forum. This includes auction sellers, both individuals who make it a full-time job and those who sell on a
recurring, part-time basis.
Subsequently, a number of users asked us to clarify the policy further. In particular, a number of occasional sellers wanted a bright-line rule to know whether they fell into the "business use" category.
We promised users that we would work to develop a policy that met several criteria: (1) it was generally fair and reasonable; (2) it was announced with two weeks notice before it was implemented; (3) it did not force anyone to upgrade (though it could remove costly functionality, such as the ability to accept credit card payments from Personal Accounts); and (4) it met PayPal's need to align the costs of credit card processing (and other expenses, such as customer service and fraud protection) with high-volume users who generate the bulk of our costs.
This email is to announce that policy. While no rule will satisfy everyone, we have worked hard to choose one that we believe meets the criteria above.
Starting two weeks from now, on Monday, October 16, X.com will introduce a new limit on PayPal Personal Accounts: a $500 limit on receiving credit card payments every six months. Following the implementation of the policy two weeks from now, Personal Accounts exceeding the $500 limit will no longer be able to accept credit card payments unless they choose to upgrade to a Premier or Business Account. Credit card payments sent to a Personal Account in excess of the limit will be held as "pending" until the recipient chooses either to accept the payment by upgrading or to return it to the sender by refusing the payment. (The sender can then resend the payment from either a bank account or existing PayPal balance.)
We will provide users with a "Credit Card Funds Received" counter so they can monitor their status; we will also alter the transaction history so the funding source for a payment can be viewed. Payments funded from a sender's bank account or existing PayPal account balance will not count against the recipient's limit.
Personal Accounts that exceed the limit will still be able to receive payments funded from a bank account or existing PayPal account balance, as well as make use of all their other Personal Account features. No one who exceeds the limit will have their account locked, frozen, or automatically upgraded; they simply will not be able to receive additional credit card funds.
The goal of the limit is to reduce the cost of credit card processing associated with accounts that do not pay fees. In an effort to closely tie our fees to our costs, we felt it was fair to limit the amount of credit card payments a Personal Account can receive. Credit card processing is expensive; VISA(tm) and MasterCard(tm) charge us for every transaction we process. And as an online financial services firm, we also have other expenses, such as bank transfer fees and customer service costs.
We also absorb the cost of keeping both our buyers and sellers safe with the PayPal Fraud Protection Guarantee. And next month, we'll be sharing part of the float with our users when customers will be
able to earn money market rates of return on balances left in their PayPal account.
We intend to keep PayPal free for personal transactions, but in order to do this we cannot provide unlimited credit card processing for all users. That's why we are asking the users who benefit most from PayPal to upgrade to a Premier or Business Account.
If you upgrade to either a Premier Account (for individuals) or a Business Account (for companies), you'll also receive a range of premium features:
- Instant Purchase -- Accept payments directly on your auction.
- Web Accept -- Collect money directly on your website.
- Automatic Invoicing -- We'll save you time by pre-filling your auction invoices.
- Downloadable Transaction History -- Simplify record-keeping with Quicken, QuickBooks, or Excel.
- 24/7 Customer Service -- Around the clock live phone support.
Plus, YOU WILL CONTINUE TO RECEIVE $5 REFERRAL BONUSES FOR REFERRING
NEW USERS -- a program that will be available only to Premier and Business users starting on Monday, October 9.
And the fees are low - just $0.25 for credit card payments under $15, and $0.25 + 1.9% on payments over $15. Compare us to the competition: a $35 payment with PayPal costs just $0.92; Billpoint(tm) charges $1.40. (Billpoint charges most users $0.35 on credit card payments under $15, and $0.35 + 3.0% on larger
payments.)
With 4 million users and over 2 million auctions on eBay(tm), PayPal is the world's #1 online payments network. And we've made online commerce more secure by providing Verified buyers and sellers with
the strongest Fraud Protection Guarantee on the web. And, over the months to come, we'll be developing more features for your PayPal account. We'll be introducing a shopping cart, dividends on your account balance, a debit card linked directly to your PayPal account, bill payment, and even online shopping. And we've heard your requests and we're ready to deliver our most requested new feature -- INTERNATIONAL PAYPAL WILL BE AVAILABLE FOR 26 COUNTRIES AROUND THE WORLD BY HALLOWEEN.
We at PayPal are committed to giving you the payment tools you want and making them the safest and easiest to use on the web. We know you have a choice, and we thank you for using X.com's PayPal
service.
Sincerely,
The PayPal Team
PayPal, a service of X.com
www.paypal.x.com
posted on October 3, 2000 05:17:32 AM new
Yep, we're all getting the same e-mail. I am now in the process of planning my exit so that the door cannot possibly hit me in the a$$ on my way out. Someone stole the "R" from "FREE".
posted on October 3, 2000 05:24:47 AM new
Basically it is fair, depending on what they have to say about transfers to/from checking accounts and between PP accounts for Business and Premiere accounts.
posted on October 3, 2000 05:40:28 AM new
DAMON!
This SUCKS! NO NEW FEATURES AND YET THEY KEEP DIMINISHING THE USEFULNESS OF THE SERVICE! They could at least have the decency to get the long-promised international service and the shopping cart up and running before they send out the bad news. Did they learn NOTHING in business school about how to time bad news?
"Starting two weeks from now, on Monday, October 16, X.com will introduce a new limit on PayPal Personal Accounts: a $500 limit on receiving credit card payments every six months."
A parent sending emergency money (perhaps car repairs) to a child in college via a credit card and PP would have to have the kid register as a business account, and pay 1.9% ransom to PP for the privilege! Even a Granny selling a couple of pieces of old pottery could be blindsided by a bidding frenzy, have the pieces sell for more then $250 eakch and suddenly be a "business".
"And next month, we'll be sharing part of the float with our users when customers will be able to earn money market rates of return on balances left in their PayPal account."
If they did not "share the float", and just minimized the number of times a personal account could transfer funds OUT of the PP system (or inserted a delay for the transfer of X days), they wouldn't have to do the CC limit or could make it much higher.
If personal accounts were restricted to X number of EFT or check withdrawals per month (with X being quite small, like 1 or two), the float would naturally increase. Those persons who are asking for daily checks or, in extreme cases, for a check EVERY TIME they get a payment, are driving the costs up way out of proportion to their usefulness. However, if they had to leave their money in the system they would either change to a business account OR would help the float.
Have the bean counters run the numbers and see what would happen if there were a time delay on withdrawals, or a limit on # of withdrawals per month.
posted on October 3, 2000 07:52:15 AM new
Hi this is my first time posting to this board. I also received an email from Paypal this morning. First let me say I'm not a causual user, I have been receiving an average of $1,000.00 a month thru the use of this service since April. I signed up at the request of my customers to make it more convenient for them. In this light I'm having a hard time understanding why I'm the one being charged? My customer is the one requesting I use this service. My customer is the one saving money by not purchasing a Money Order, Check, Postage and Envelope and the time it takes to write a note or go get the Money order etc. and now my customer will get a kickback for using this service. I agree that this is a terrific time saving service for anyone buying on eBay or any other website. But as a sell I have received absolutely no additional benefits by accepting money through the use of this service. I still wait 3-5 days minimum for my money. Also, If I'm understanding their new policy I am now the one who has to go to the customer and tell them I will not accept credit card payment thru Paypal if I choose not to upgrade to a business account. What is wrong with this? Shouldn't paypal be the one doing the screening. They are the only one's getting paid. It's not fair that not only do they want to charge me for this service now they want me to do their screening. They need to do their own dirty work.
I still see lots of Paypal banners on ebay so I can only assume that most sellers have accepted Paypal's new policy and that I will be in the minority; but after the email this mornings I have decided that I no longer trust this company with my money or care to participate in this service.
posted on October 3, 2000 09:09:37 AM new
"I still see lots of Paypal banners on ebay so I can only assume that most sellers have accepted Paypal's new policy and that I will be in the minority"
I think a lot of the banners you now see are from sellers who do not yet know about the new policy (I have not yet received an e-mail) and on auctions that are already running. I think that as the current auctions end and the word gets around you will be seeing a whole lot fewer PayPal banners.
posted on October 3, 2000 09:51:14 AM new
"On Monday, October 9, PayPal will modify its Signup Bonus requirements to encourage new users to reduce credit card spending by pre-loading their PayPal account. New users will receive a $5 bonus when they Verify their PayPal account and transfer $50 from a bank account to their PayPal account. In November, PayPal plans to introduce money market rates of return on PayPal balances. The Signup Bonus promotion continues to be a limited-time offer."
Just noticed this on the PayPal site. I find in interesting that in the e-mail they only said "Plus, YOU WILL CONTINUE TO RECEIVE $5 REFERRAL BONUSES FOR REFERRING
NEW USERS -- a program that will be available only to Premier and Business users starting on Monday, October 9." They never said it was a $5 bribe for ACCESS to all new users bank accounts!
Maybe I oughta go back and check the site again and see what other changes they have hidden in the mess and didn't bother to mention in the e-mail.
posted on October 3, 2000 10:16:32 AM new
So everyone who already verified (and probably have $50 or more in their accounts most of the time) won't get the $5 bonus? Nice.
posted on October 3, 2000 11:16:51 AM new
Hey PPD! Thanks for showing up.
I thought the new structure sounded good and fair until I saw the WHOLE structure on PayPal website.
Sorry, when a company says they are just recouping their CC expenses, then they should be charging on those expenses. Again, you (not YOU PPD, but PP) have included ALL transactions and that is just not going to work for me in a business/premiere account.
I helped build you and I will be gone when I hit my $500 (which is probably what you wanted) and I have already quit listing you as an option in my ads.
posted on October 3, 2000 11:37:23 AM new
If personal accounts were restricted to X number of EFT or check withdrawals per month (with X being quite small, like 1 or two), the float would naturally increase. Those persons who are asking for daily checks or, in extreme cases, for a check EVERY TIME they get a payment, are driving the costs up way out of proportion to their usefulness. However, if they had to leave their money in the system they would either change to a business account OR would help the float.
abacaxi....great idea. I would be willing to leave my Paypal money sit if it worked like a personal money market or index account and paid a decent interest. Limit the account to 2 or 3 draws a month and make it necessary to keep a pre-determined balance in at all times. Those who didn't like that type of account would have the option to sign up for a business account or sign up with another on line payment company. There sure are a lot of them out there that if enough people got behind them they will be just as successful as Paypal... it wasn't that long ago that these and eBay message boards made Paypal what it is today. Lots of us were afraid to try Paypal until enough people shared their expereinces. Up until all this hit the fan I would leave my money in until it reached $500.00 or more. Now I take it out immediately fearing the worst. I don't begrudge Paypal a fair profit and if we would share in that profit it would be even better.
posted on October 3, 2000 01:28:06 PM new
Two questions:
1) Why have some received this email & not others? I haven't heard diddly from PayPal...
2) As a small (very) seller, the $500 limit per six months is OK with me, but how can we be assured that PayPal will only apply it to
payments made by CC (as they stated above)? What if someone pays using funds from their own PP account? And how will we know if a payment was made using one method or the other? Not that I don't trust PP, or anything like that....
posted on October 3, 2000 02:28:53 PM newbunnicula And since you are going down that road, Bunnicula, how about the transactions where you have 25.00 in your account and buy something for 28.00...
...so 25.00 comes from your PP account, but only 3.00 comes from the credit card.
posted on October 3, 2000 08:18:17 PM new
Hello Bunniculla,
The answer to your question... They will supply a counter and a tell you where each transaction orginated from.
Excerpt from the Paypal E-Mail:
We will provide users with a "Credit Card Funds Received" counter so they can monitor their status; we will also alter the transaction history so the funding source for a payment can be viewed. Payments funded from a sender's bank account or existing PayPal account balance will not count against the recipient's limit.
Hope this helps.
I do like the post about what happens when only a part of the payment is credit card.! Interesting! I too would like to know how that will be handled!
posted on October 3, 2000 08:49:27 PM new
The sad thing is that after this past summer, I don't know that we can *trust* PP to tell us the truth about "where each transaction orginated from."
posted on October 3, 2000 08:57:12 PM new
Perhaps you can set-up a standard e-mail which asks the buyers which method they will be using. State that it is for your record keeping of the fees involved in the Paypal transaction.
They should understand and not have any problem with it, since depending upon the method there may be a different fee structure.
I know that all of my customers are very friendly and would never have a problem disclosing such information. Perhaps if the e-mail expained the fee structures. I would not indicate that it was due to your mistrust of Paypal. That only makes you look bad. You are the one paying the fees, the customer is getting the service for free. No money order charges. They should be willing to give you that much information!
Make it a standard e-mail, that you can copy and paste, rather than writing it freehand each time.
This is only my suggestion... My opinions are only that...opinions. I do hope that it will help you in gaining trust in your transactions.
posted on October 4, 2000 04:20:35 AM new
Damon -
As I read the terms for a business account ... despite the lesser cost to PayPal for payments by EFT and transfers from existing PayPal balances, you are charging for ALL transfers as if they were CC payments until the >$500 range. And if I am going to get $>500 from someone's bank, they will be doing the transfer and paying the fees with a bank-to-bank wire!
The only break the recipient gets is the lack of the $.25 fee on the bank account and intra-PP account transfers. Whoopti-do!
The comparison you make with Billpoint is misleading: They offer an electronic check service for a flat $.35 with no percentage, something I will be looking into REAL SOON NOW, and their CC% is not 3.5%. They dropped it sharply to take advantage of the PP fiasco.
I offer PayPal on eBay auctions for THE CONVENIENCE OF THE BUYER - I was doing just fine with checks and money orders before PP's "viral marketing" convinced the buyers that they had to have it and I started getting requests. Maybe PP should charge THEM a fee to transfer the money OUT of their PP account ... say $.25 +1.9% or so.
posted on October 4, 2000 07:59:54 AM new
I'm considering upgrading, but adding a "PayPal surcharge" to the final closing price--if a customer opts to use PayPal, then the customer pays for the privilege. No reason I can see why I should have to eat the cost of a convenience to a customer. In most cases the surcharge would still be cheaper than buying a money order plus a 33-cent stamp. If customers balk, then I'll just go back to accepting checks and MOs only.
posted on October 5, 2000 04:31:19 AM new
I haven't gotten any of these PayPal emails either! I feel like a mushroom - kept in the dark and fed you know what!
Why are some people getting kept informed and others are getting no emails.
Here's another question - can we specify on our auctions that we only accept PayPal payments through bank transfers and transfers of money already in PayPal accounts - No Credit Cards!!??
