posted on October 3, 2000 04:43:50 AM new
Hot off of my e-mail
***************
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 11:21:21 AM new
Paypal is out of here. Go PAYDIRECT EASY FUN AND SECURE and they don't change there rules all the time BAN PAYPAL boo for paypal. Hey this is fun. We could start our own ban paypal site.
posted on October 3, 2000 01:24:17 PM new
The only people I can see that this would upset is folks who are trying to run a business disguised as something other than what it is.
If you are in business admit it and realize PAYPAL's percentages are VERY low. I would imagine that the whiners are the same ones who don't declare their on line sales on their income taxes, have no State Retail Tax Number, and other wise try to skirt the law.
If you aren't making enough profit to afford 1.90%, then you need to get in another business.
Sorry if this offended, but still true.
75% of my customers on Yahoo use PayPal, and I'm not about to cut off my nose to spite my face. I love PAYPAL, and the money it has brought into my business. I just upgraded and am VERY pleased.
posted on October 3, 2000 01:55:06 PM new
This is NOT a question of OUR ethics or honesty jwpc. Please place your judgement where it belongs, in the lap of the dishonest one PayPal They operated it like a drug pusher. Give it away free until they got us hooked and then start charging.
posted on October 3, 2000 02:35:01 PM new
jwpc wrote: >>I would imagine that the whiners are the same ones who don't declare their on line sales on their income taxes, have no State Retail Tax Number, and other wise try to skirt the law.
If you aren't making enough profit to afford 1.90%, then you need to get in another business. <<
You're all wet, jw When I decided to sell on ebay, the first thing I did was get a tax number, well before I ever placed my first auction. Part of why I'm not (yet) making enough to *afford* the 1.9% is that I'm still learning the ropes (when, how, what to list and at what prices work best) and setting up my systems which include what I need for IRS. I'm not interested in skirting the law. Don't need to, don't want to, it's not in me. (Well, okay, except for speeding.)
So at this point I'm somewhere between a hobby and a business, I suppose, but headed (probably) toward a business. In the meantime, I don't need anyone forcing more fees and charges on me -- esp. when they said they wouldn't. I still have some start-up costs to try to cover with my CURRENT smallish profits, and I'm also not at all interested at this point in the so-called *benefits* of the two PayPal upgraded accounts.
I've read their email once, and I thought it sounded fair enough -- 500 CC transactions/6 mos. Since the majority of my buyers don't use PayPal anyway, I probably won't reach this threshhold for quite a while, and if/when I do, I too probably won't mind the 1.9%. So again, seems fair. But doesn't override or make up for their earlier PR fiasco, or the bad taste that will no doubt stay in my mouth forever, but ... well, they did seem to have learned a few things from it, eh?
I guess my main point to YOU would be NOT to judge all Sellers on the basis of your business or the way you do business. And I surely do object to your dissing ALL of us without knowing what you're talking about.
posted on October 3, 2000 02:37:01 PM new
Ditto heygrape and moonmen!
I don't have a problem with the CC transactions. I have a problem with the transfers from checking and between PP accounts. If they want to offset CC charges fine! No problem!
If they want to charge for everything (and not include that in the letter btw) NOT fine! If that makes me a whiner--so be it!
"I would imagine that the whiners are the same ones who don't declare their on line sales on their income taxes, have no State Retail Tax Number, and other wise try to skirt the law."
And the taxes are between me and my CPA--Yes, the CPA that I have on retainer to do ALL taxes that I owe--but I can tell you that I resent being categorized as a cheat when you have no knowlege whatsoever about me or anyone else here for that matter.
posted on October 3, 2000 03:32:11 PM newVM"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."
posted on October 3, 2000 03:50:45 PM new
Okay! That's what I thought. CleverGIrl's post said 500 transaction and so I thought I'd better check. Hey. They could have changed the rules this afternoon, you never know with them.
posted on October 3, 2000 05:07:15 PM new
Well for all who still think paypal lied oh well.
I think this group went well over and above here for all and have come up with a fair standard to define free and pay service and business account they exsplianed why they have need of this and have out lined all the benifits to useing there pay services and benifits yet to come not to mention you will also now earn on funds left in your paypal account.
$500 limit is pretty generous to be honest for the average seller I have used paypal nearly a year and still havent had $125 in CC payments through paypal myself .
and I run auction on ebay and yahoo 24/7
and even if I did have to sign up for a business account 90% of my sales are usually $15 or under a quarter for buyer conveince wont hurt me at all.
WWW.dman-n-company.com
posted on October 3, 2000 10:05:27 PM new
If it's free, great! If not, get it at the best price you can!
I think it was ok for PayPal to change thier policy, if they so desire. I run a business, and when I find somethings not working out I change my policy too! I dont know anyone today who runs a business who does'nt react to market trends and events and act accordingly.
It's very simple: If your not satisfied with PayPal, quit whinning about it! Go over to one of the other services, or better yet, get a merchant account yourself. Then you will have a reason to complain about the costs. Otherwise just accept it for what it is, the cost of doing business.
posted on October 4, 2000 04:03:12 AM new
The only people I can see that this would upset is folks who are trying to run a business disguised as something other than what it is. >>
The first rule of business is to make money. Why would I pay paypal money for a service I can get for nothing. That would be stupid business as far as I can see it. I have been NOT using paypal for several weeks now and using Paydirect and have had no drop in sales. They have increased actually but that has more to do with Ebay and yahoo picking up.
Even if there was no other free pay system to go somewhere else besides paypal would be a good idea and a SOUND business practice. To stay with Paypal is not sound and they have proved over and over they simply are not stable and do not really no what they are doing. If THEY would have had a good business plan did a little more research then they did and had a good PR department. Most if not all of this stuff could have been avoided.
With most including myself that gave up Paypal for better and greener pay places. It has to do more with the practices and un-ethical moves of Paypal then the fees.
Many have switched to Paydirect which is free, but just as many have moved to other pay services.
They know in no unclear terms with as wish washy, unorganized and all the simply bad business practices paypal has they are not a good company to do business with.
If they would have run a business like this in any of my business courses they would have gotten an f for many things included the prediction of good long time success. 5 years from now is when we will be really able to tell if Paypal was able to pull its act together and really do right by their customers.
Until the I am still smiling all the way to the bank without paypal and there are a lot less hassles and worries. I never did trust paypal even when I was using it.
posted on October 4, 2000 07:07:40 AM new
I believe PayPal said it would be FREE forever for personal accounts, I don't believe they said anything about business accounts.
I would image that this change was created early by sellers failing to leave their funds in PayPal long enough for PayPal to be able to make any profit from the funds held. I have always left a balance in my PayPal account, and don't request funds from it but every couple of weeks.
^^^^^^^^^^^^^^^^
Having been on eBay over 5 years, and Yahoo for almost a year, from talking to zillions of sellers, it is my feeling that many, many part time sellers are certainly greatly exceeding the $500 every 6 months or so, which is the PayPal limit between personal & business. I feel that many are just mad when someone calls their hand on what they are actually doing; or perhaps some are simply deluding themselves.
^^^^^^^^^^^^^^^^
Someone said that their items sell for between $10 & $20 and that the PayPal fee would greatly impact them. Any standard business calculates the cost of "doing business" into their prices. Therefore, if you sell an item for $10, and it greatly impacts you to pay $.44 to use PayPal, you need to rethink and/or restructure how you determined your prices.
Whether you consider yourself a business or not, the fact is profit is made by running your venture as any standard, successful business would. Bottom line for most businesses is at least a keystone price; that is if you paid $5.00 for the item you would sell it at $10, anything less and after all expenses, you are losing money.
Whether one is a full time Power Seller on eBay, or a once in a while "part time" seller, approaching selling in a business like manor means all the difference in your ultimate profit.
If you were selling in a Flea Market, there are base costs involved there also, and if these are not calculated in to the "cost of doing business," you are deluding yourself into thinking you are making more than you actually are.
Gas, phone bills, printer paper, printer ink, computers, wrapping paper, etc., tape for wrapping, add up fast, and are considerable deductions when income tax rolls around. For instance, if you don't consider vehicle gas, then realize the costs you are over looking in whatever type of "enterprise" you are perusing. It takes gas to run the car to go to the post office, it takes a phone to run most computers, it takes paper, it takes an ISP (cable of such) ink, etc., etc., if you are absorbing all of these costs, then you need to review your true profit, because you costs are certainly more than eBay fees or PayPal fees.
If you run around to Flea Markets to find items, or auctions, etc., all that should be included in your "cost of doing business." That is gas and time spent. You may say you are having fun, but the fact is it cost to run all over creation locating items in this manor, and failure to include this as costs, doesn't make it disappear, you are merely deceiving yourself as to profit & loss.
Most small businesses fail because they fail to include the true cost of doing businesses. You can't grow or even profit unless you operate your venture as any reasonable business would....
^^^^^^^^^^^^
I think in the future we will see fees with PayDirect, so then everyone will whine and run to the next "free" service. I don't believe your customer's are going to run around endlessly joining service after service just to accommodate the latest whim of a seller.
The key to repeat business is satisfying your customer and accommodating their needs...
posted on October 4, 2000 08:27:07 AM newjwpc Since I was one of the first to jump on the PayPal bandwagon, I can say unequivocably that PayPal did NOT, NO NEVER EVER say that they were free for personal accounts only!
When I signed up, they were targeting the auction sellers and buyers.
They targeted the sellers saying that it was a free service and touting the fact that you could now take credit cards for FREE for your auctions. They provided nifty links as well.
They TARGETED the sellers who were uncluttering their houses and the ones who didn't have the funds or need for a merchant account.
They then signed on with AW as a partner with flashing banners and were all over the boards shouting FREE FREE FREE.
When asked--they said they made money on the float just like your bank does (and yep! Banks DO make money on the float!--lots of it!)...
Using the Viral Method as a college thesis, they created a GREAT customer base! You knew they had arrived when Ebud made an update just to add PayPal as a payment option! (not going down the Ebud lane at this time! )
Enter x.com...Soon after PayPal was catching on like the flu in winter, X.com offered people TWICE as much to sign on--$20.00. They offered services such as checking, credit, debit cards and credit lines.
Auction people just wanted to take credit cards. They didn't care to have the extras and have to give things like social security or tax numbers to someone that they had never met and that was brand new to the game.
X.com was floundering. Their service was not as popular as PayPal and their customer base showed it. They were determined to survive, but they needed customers...
So, x.com looked at PayPal with customers, run by people who had NO IDEA that this thing would get so big so fast and the light flashed!
X.com sidled up to the PayPal guys and said "Boy have I got a proposition for you! This is a deal that you CAN'T refuse!" And apparently, they couldn't...
X.com "merged" with PayPal. X.com got the customer base that they craved but were unable to entice even with twice the cash.
PayPal owners got out of a business that was not started with the thought that it would grow so big so fast (and I am sure some decent CASH as well. ) Some of us saw the future at this point. But we decided to ride it out--we could be wrong...
At this point, we were no longer dealing with PayPal, but x.com who wanted our checking account business so that our money would be in their system even longer so that they could make MORE MONEY on the float as well as interest from the free lines of credit and the credit cards and debit cards (the debit cards, though they do not cost the customer in interest, they do cost the merchant who accepts them). And, people can't leave when they owe more money than they can pay back on their "free" credit lines. Basic strategy there...
Even though x.com got the customer base, they still were not getting the customers. People were happy with PP--always free. Didn't need a bank--we had banks. We still weren't comfortable giving our SS# or tax numbers to a bunch of people that were unknown--we had banks that we knew! And x.com had made some mistakes in the beginning before they even aquired PP which lessened any trust that people may have had or developed.
So, as the merger continued, little changes began to nibble and creep in. The line between PP and xcom began to blur. The banners touted both services.
They decided that we needed to "verify" our accounts even though with many (but not all) of us, they had our checking accounts because we were depositing electronically into our checking accounts from the beginning. Do you think we would not have been screaming if the money was not coming into our accounts properly?
But, some people had the audacity to request manual checks sent to their homes rather than give their checking account numbers to this company. They were careful and not trusting but x.com wanted their info. It costs money to write and mail those manual checks!
And, if people didn't want the money going into their main account, they could sign up for x.com! What a great solution! Wow!
Some didn't want to verify. Drats!
So, they began to turn the screws just a bit more. The unverified got nasty little messages sent to their users. They were second class.
Then, another brilliant bulb went off --We are going to offer business accounts! Offer promises of more services (for a price) like sweeping the money into your checking each night and international sales (which we have yet to see, though we do have the "promise" of Halloween now.) These were small charges...Nothing big.
It was not as popular as they had hoped...
But people remembered that it was "always free" when they signed up with PP.
Xcom in their infinite wisdom began to prevaricate and say, nope. We said person-to-person transactions were free. We didn't say that business was free! Well, I guess they didn't say that business was free because there WAS NO BUSINESS when we signed up! No possible talk of business. Just one type of "always free" account.
I didn't even scream when they made a "mistake" and took money OUT of my checking account--and this was BEFORE they offered the verification and the ability to fund from your checking in any way except sending them a paper check. I got my money back, but I can tell you from personal experience--watch those checking statements folks!
The screws began to turn more. People screamed and xcom "listened". They came out with a more palitable edict. Some people are leaving now thinking that the light at the end of the tunnel is indeed a train coming at them (to borrow a phrase from another AW'er). They are leaving while the getting is good.
In the meantime, the screws are turning more with unverified accounts having their assets held for "investigation" and then being told that had they verified, this would not have been a problem. Bah!
X.com stated that they needed to cover the CC charges but there would NEVER be a flat fee! Fine. I will pay for the CC transactions. But NO! They want me to pay for EVERY transaction! Every ONE! PLUS FLAT FEES! Why is that? Hmmmm...
Mark my words, the newer kinder/gentler guidelines will get nibbled back to where they were when they were first announced. The changes will insidiously slither in.
I give them 6 months to have PP phased out completely and everyone to be x.com. The unverified will be the first to go. Then, they will begin to work on the person-to-person "free" accounts that won't be so free. Right now they let you get the money from checking or other PP accounts, but that too will change. They will say "we didn't say it would be free forever!"
They will eventually weed out all of the "FREEloaders" and be back to their x.com model free and clear with a larger customer base than they had in the beginning.
Their aim is to get rid of the rifraf and get a banking company that will stay afloat.
They want the customers who will take the abuse and stay through it all. The ones who contentedly allow xcom to do whatever they like with their money.
It was never PayPals business model to charge. It was ALWAYS X.com's business model to charge. And charge they will!
They did underestimate a little item, though. And it isn't their fault--they don't buy and sell on auctions. You can charge the sellers, but most sellers are buyers too and sellers make up a BIG percentage of the buying as well.
I don't say that anyone who stays should be called names. It is fine if you wish to stay. That is why this is a free country. You can make your own decisions. If you don't mind the changes and the rules, no problem.
I do invite you to make sure that you have all of the new charges before making up your mind and being surprised in a month or two...PLEASE know what you are signing on for. It was NOT all included in the e-mail!
As for me and my money--we are outta here! We signed on with PayPal Always Free and we are leaving x.com never free.
Yahoo PayDirect, ExchangePath and EnergyFlow here we come! I hope if/when they decide to charge, they will take a lesson from this fiasco and have a well thought out plan.
~It's gonna be a B-u-M-p-Y ride!~
Spelling...
[ edited by labbie1 on Oct 4, 2000 08:30 AM ]
posted on October 5, 2000 09:33:56 AM new
I think the "protestors" against PayPal are actually missing the point....
PROTEST ALL YOU WANT, and it will accomplish about as much as those who get upset with eBay.
Actually, as someone else said, PAYPAL saves me time and money - of my customers who charge 96% use PayPal, 3% call us with their charges as we have our own merchant account, and 1% use PayDirect.
We stopped using BillPoint as none of our customers used it, and it was a pain in the derrière to send invoices, and such stupid extra steps which it required.
Realize, just like in an eBay Protest, the BUYERS are the issue in sales, and the BUYERS don't give a hoot what your problem is with PAYPAL - if they like it and want to use it, and you don't offer it, they'll just buy from someone who does.
posted on October 5, 2000 09:49:48 AM new
Fact: WE built Paypal and we can build PayDirect or any of the other numerous services out there.
The folks that upgraded are the ones getting the shaft. Upgrade and you lose your "Free Fees" on $1,000 of your credit card transactions through them per year.
Sounds good to me. Feed and support paypal and get screwed. And then get on these boards and say how wonderful paypal is. LOL!!
posted on October 5, 2000 01:10:10 PM new
YAHOO HAS FROZEN OUR BIDDERS......HITS ARE DOWN BY 90%!!! READ WHY BELOW:
PayPal PayShmal- PayDirect Payerect- it DOESN'T matter. If you read the fine print on ANY freebie it claims the right of CHANGE at ANY time. That's the way the cookie crumbles. We came to Yahoo cuz it was free. Now, we built them an auction buz and here comes YahooPayDirect (which WILL CHARGE IN THE NEAR FUTURE) No matter how you cut it, these are the big guys and they play the "mo money game" just like any big players....
Remember when we all started? We couldn't afford to buy into a CC service cuz it would cut our profit line. Many small MOM/POP stores these days STILL don't take CC. Well, not many of us are above the MOM/POP status here- but when it comes to the money we all generate "en masse" they as someone else said here "hook us, and took us"
What never ceases to amaze me, is that without US they CANNOT make any mo money!! Any CPA can tell you that they were LIVING OFF THE FLOAT of all our CC pmts. Guess what? PayDirect comes in on a NEW FLOAT BOAT and puts a hole in PAYPAL'S FLOAT BOAT. VOILA`!! Here comes the Shore Patrol with "customs charges" -- Can't get on this boat til you "pay up, folks" Well, if they want say ---- 1.5% they will simply SELL the paper for 3% which I believe is the normal charge if you had a CC service as a MOM/POP store...
YAHOO PayDirect - just has a different colored boat right now- They are training their "customs guards" as we speak. There is no escape now, because they 'FROZE THE BIDDERS' BY DEMANDING THEY REGISTER WITH A CC!!!!! I am sure there are tons of bidders who walked off in a huff over that one.....VIEWS ARE PITIFUL RIGHT NOW AND SALES ARE WORSE!! Maybe it's time to move on????????
posted on October 5, 2000 05:05:45 PM new
Hilda does have a point- I have tinkered with my TOS 3 different times now. I finally feel that I have it "right" but there may be those who would say I don't know what the he** I'm doing & need to get my act together because it took me awhile to get to that point. Kinda like PAyPal.
Well, I never used PayPal, and probably never will, so my opinion doesn't matter much in this debate...quite simply, PayPal never met MY needs. PayDirect meets my needs marvelously. (The difference is that PayDirect lets me credit my credit card when a customer pays me. Since I don't have a bank account, this is crucial.) I feel comfortable dealing with PayDirect because they are integrated into Yahoo, they are upfront about the fact that they will eventually charge fees, and they provide a valuable, usable service to me. I would happily pay (reasonable) fees for their service. I have never used PayPal even when it was free, and that is simply because it didn't meet my needs.
When I decided to sell on ebay, the first thing I did was get a tax number, well before I ever placed my first auction. Part of why I'm not (yet) making enough to *afford* the 1.9% is that I'm still learning the ropes (when, how, what to list and at what prices work best) and setting up my systems which include what I need for IRS. I'm not interested in skirting the law. Don't need to, don't want to, it's not in me. (Well, okay, except for speeding.)
)
But we decided to ride it out--we could be wrong...
[ edited by labbie1 on Oct 4, 2000 08:30 AM ]