How EBay's PayPal profits from its float
PayPal's plans for a 21-day hold on some funds has merchants scrutinizing its contractual fine print. What's your view on PayPal?
From George K. Judy I feel for you; really I do. Ebay and Pay Pal are one of the biggest internet viruses on the web and the said part about it is there is not anything we can do about it at the moment. I have tried and or looked into other auction sites but no other site has the traffic that Ebay has; this is the truth and wish it wasn't. Pay Pal knows this truth as well and they exploit that because of it. Until Ebay gets rid of Pay Pal and has Merchants get paid by whatever means they wish nothing will change and we will continue to have to deal with it. The only thing we can do is open a merchant account but since people on Ebay are so brainwashed into thinking Pay Pal offers protection when it doesn't( read the REAL fine print) you will only get customers who don't mind buying through a merchant account.
God Bless and look into it when you can.
From etsygirl,chicago,ill notify the buyer if this happens and let them know that a hold has been placed on your paypal funds, for that trasaction . Ask the buyer to release the the hold via thier paypal account once it is released only then will you ship the item. Offer to insure the item at no cost to them. If you really want to make paypal take note… accept other forms of payment and inform buyers that paypal is accepted but all transactions made via paypal will be shipped after 21 days due to paypals policy.
From Terry Evans Marshfield MO I am an eBay seller as well as a business that utilizes Paypal on my website separate from eBay. I noticed yesterday that they will be holding 20% of my money for 60 Days, Not 21. I have had 1 bad feedback out of 2400 on eBay and never had a dispute. What gives? I can do without them though, and plan to.
From judy ladd I am so upset about paypal and ebay holding my money. I only just found out about the hold on monies when I opened a 2nd ebay ID. Paypal is holding my money and I have complained to paypal and to ebay and it has done no good at all. I have been selling on ebay since 2004 and my feedback is 474 with 100 percent feedback. so why do they think I'm not a trusted seller. I had to pay 16.00 dollars today to mail items that I will not be paid for for maybe 21 days. So much for earning gro.money and paying the electric bill. I am looking for another place to sell.I have worked so hard on ebay this year. I lost my job and my husband is on kidney dialysis. We need the money that I earned to buy gas to take him to the Dr. Mon. Thanks ebay, guess I have not earned you enough money for you. They would not even look into it for me, they don't care that some people are hungry right now. Ok I feel a little better now, Thanks Judy
From b…bentonville arkansas uhh, so up to 40 MILLION dollars per year is just a drop in the bucket? Give me a break. If I were a street vendor selling hotdogs, and I sold your mother a hotdog, and my cousin was the middle man making change for the transaction, and he required 2.9 % plus .30 for processing that would be ok. But, if he decided to hold the payment from me the seller for 21 days so that he could earn interest on it….well would that be ok? I mean really? And, say he's doing that to every street vendor in the world….so he can make that tiny drop in the bucket profit of $40 million per year…meanwhile I am making…well..beans for the weenie sales that I'm trying to survive upon. Paypal and I spoke on the phone for over an hour recently. I inquired specifically about this 21 day hold policy, and no such information regarding paypal's activities which are acknowledged in this article, were ever brought to my attention…despite my continuous questioning. They told me that the hold was to increase buyer confidence…so I called ebay. They told me the buyer's are NOT AWARE that the funds have been withheld from sellers in such holds….so, hmmm, the buyer increases confidence in ebay transactions because of a hold in funds that the buyer IS NOT even aware of? How does that work? It's no fun when you are an entrepreneur trying to make ends meet as a small business sole proprietor…and when times are horrific as they are currently, paypal comes along with a policy that holds up cash flow from struggling entrepreneurs…so they can make a drop in the bucket $40 million this year. So tell me, does paypal support entrepreneurs? I will leave the readers to answer this question. I'm not paypal, so I won't try and answer it for you like a politician. Oh, and by the way paypal….if you would like to see what a drop in the bucket really looks like….ask me how much I make annually as a fulltime ebay seller….that's when you will see what a drop in the bucket really is! I may as well start selling hotdogs down the street….
From Bob Matick, Vancouver, BC I am Bob Matick and I agree this seller was un -fairlyu treated by PayPal. I have stopped using Ebay because of this. it is unfair to both the seller and the buyer whos funds have been frozen.
From Columbus OH Does this remind any one of Master Card living on float in the 80's and that is why nobody accepts them
From Mick When I discovered that PayPal had put on hold received funds, including
shipping costs for 21 days, I decided to give a full refund immediately to the buyer.
E-bay expects a seller to ship goods whilst funds for shipping have not
been released. It is therefore impossible to finance the shipping of
such goods.
I signed up to Paypal terms and conditions before the implementation of this policy and I was not notifed in writing of this change to the terms
and conditions to which I previously signed up.
For those who want to get back at PayPal and e-bay for this policy, it is far better to refund the buyer as the fees are also refunded.
When this happens you can then claim a refund of the ebay final value fee for a transaction if PayPal holds the funds.
E-bay should not charge commisson for a transaction that they prevent from occuring through the holding of funds necessary to facilitate the completion of the transaction. You cannot finance the shipping of an item if funds are not forthcoming, so PayPal is not facilitating the completion of the transaction, and you have no obligation to post the goods.
If everyone offers a full refund when this happens, e-bay and PayPal will only lose. They will make interest for 10 days as they do not refund the buyer for 10 days in some cases, but they will lose all their fees if full refunds are offered. It is better to keep your stock than to ship it out whilst your funds are affectively siezed.
Stick to your principles and e-bay / PP will only lose out from this policy.
From Miami, FL This is discrimination against small, and new, sellers. It holds only certain types of transactions. It is wrong, and as soon as Paypal has competition it will stop. I would like to see a class action discrimination law suite brought, and Paypal put back in the bottle, they have got too much power.
From Abilene, Texas WE are disgusted with Pay Pal holding our funds and are looking for another source or will go back to wiring funda and the mails.
From Van Huddleston, Dallas Texas This has been happening for years with Paypal but has certainly gotten worse since it was bought by Ebay. I joined Paypal early on and was actually paid $50 to sign up. It was great in the beginning until it was overcome with scammers from all over the world. Unfortunately the steps that had to be taken to protect the company from these scammers ended up mostly hurting the honest customer. They have frozen my account so many times I have lost count. Recently I was actually a victim of $thousands in a scam that was paid for with Paypal .. Do you think they were able to help recover my funds?? LOL>> "were sorry" was the best I could get from them. They have outgrown their usefullness and should be knocked down a notch or two. Most lawyers are afraid to take them on and they know it. They use teenage employees to lie to everyone that calls in about a problem. The newest ebay owned company Stubhub is following the same path. It is the biggest ripoff company around and the worst run. They sell your tickets and keep the money or debit your account to cover their mistakes.. and customer service only gets you lied to over and over.
From Anonymous wouldnt touch any of ebay companies with a ten foot stick.
From Tabitha, trinity NC I am very very displeased with both ebay and paypal! My fiance and myself have been in a bind for money and I decided to sell several things on ebay. I recieved payment for my auctions only to find out that the money is on hold! They say the money will be realeased once delivery can be confirmed….how do they expect me to pay to ship with no money? I intended to use the money from the auction to ship the items!!! I am furious! I call customer service and get no help at all!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
From Tom Monas, Sacramento, CA I am very dissapointed with my paypal service. I dont know what gives them the right to withold my recieved payments and expect me to ship the items! I generally will only ship items once payment has been recieved. I was never told prior to receiving payment that my payments were going to be held. If I would have known this I would have certainly used a more reliable form of payment other than Paypal. I Shipped the items anyway and even after they have been recieved my payments are still being held. I appreciate they are trying to protect buyers interests…. however as a seller I have given up my goods and not recieved payment! I am pretty sure ebay is breaking some form of rule or law and I intend to follow up with this and will be posting my experience on various boards. This is rediculous!
From ko, las vegas Paypal and Ebay should get sued under antitrust laws as being a monopoly. Google is a fool not to do so. They should be forced to allow google and other payments systems equal standing.
From Brian Littleton, CO I had my account hijacked by somone who then stole over 7000, from it. paypal never alerted me and when I did alert them they ran me through hoops had me fax over tons of documents requested credit reports etc to prove i was who I said I was. They then closed my account and said I was the fraudster and tried to take 12,000. from my account. Luckily my bank caught it and stopped paypal from doing so.
The very next day my ebay account was closed and they said it was because I was a fraud user. Over 1800 all positives and I proved I am who I am and they still say I am not who I am.
To top it all off ebay sends an email to the people who recently bought from me saying I was fraud seller. Guess what open door for buyers to claim never received items and file with paypal. While I am left defenseless. Ebay and paypal both have the tracking info. A lot of them were signed for by the person receiving the item they now claim that they did not get because ebay says to them I am a fraud.
Total bill now with paypal = 27,000.00
And now they put this on my credit report and are sending collection attorneys after me.
What a joke paypal is. This from a person who is not who he is.
From Scott E , Farmington, MO As a 6 year Ebay seller, unfortunately I have built a business, recognizing now, Ebay / Paypal are partners. Paypal is currently holding about 25% of my monthly gross revenue. I won't deal with this very long, I intend to leave Ebay. 2 million in sales over my tenure. Its a terrible mutual loss.
From Jon J, Austin, Texas Bean Counter wrote:-
Enough of this gnashing of teeth and moaning already. PP is – and always has been – simply a company that processes payments. Do they have some uncommon rules, yes. But they are not a bank, so they don’t play by bank rules. If you don’t like the PP rules, you DO have other options. (GOOG checkout already being noted.)
And anyone can sign up for the PP Money Market account, so you can earn interest on funds that are in a PP account.
An awful lot a griping is about the 21 day hold. Nothing new about institutions holding money, be it a bank, credit union or some other financial institution. You want to avoid trouble, stop trying to rob Peter to pay Paul. Doing so simply indicates that you don’t have enough capital to operate your business properly. Time to sit at the adult table and get a real business merchant account, proper operations funding, and, if need be, other service provider(s).
I’m happy with what PP does – and does not do. PP is just a payment process company; not a bank, not a lender, not a credit union, not a financial services company. Keep that idea in your head and you’ll do just fine.
Beancounter, you seem to forget that eBay (and this then applies equally to PayPal) was set up as a personal trading platform. Your comments are those of a significant merchant operator and this not appropriate for many eBay / PayPal members. If you are running a business you have some allowance for "issues" where you write off a few failures along they way as it's generally not worth the time and effort dealing with recovery. If you are "small time" or a private seller, you do not think that way, nor do you expect to have that forced upon you by a service that is being heavily sold as being protected, secure and safe. Perhaps you don't remember the time when eBay considered itself as being a "community" and PayPal as a service tool of that community?
You will forgive me if I say your post appears as written from someone within the corporate sector and hence comes over a little biased.
From Jon J, Austin, Texas PayPal have removed the facility to access "member information" – the page that indicates how long the account has been held, the account type and the transaction count. Why? They are, of course, unable to explain. Help says you can access it, most of customer support think you can, but the links have gone. I can see my own "member information" but I cannot check up on a seller or buyer (i.e. a receiver or sender of PP funds). As PP won't offer guarantees, people have to take their own credit risk. Accessing the sender or recipient history is fundimental to assessing that risk. So why has this "tool", which PayPal state as being a security feature, disappeared?
From mad jack I am going to run up Hundreds of dollars on Ebay adds and never ship anything.Let Paypal have to pay it all back.Its time we crush this company.
From Larry, Las Vegas I just had to write about your story concerning paypal holds
Actually ebay holds
I'm a 7 year power seller on ebay , I have a 99.3 rating
And over 14,000 positive feedbacks and over 5000 distinct
Feedbacks , and yet they are holding every payment
From every buyer right now , I have a deficient shipping rating
Only out of all the criteria , due to the fact I deal with a hard
To find item that is not available in the US and we have
Many back orders due to demand , its not buyer dis satisfaction
Its buyers giving truthful statements that sometimes shipping
Is slow.
This needs to be fully investigated and the truth needs to come out,
Even their own system is bogus because they claim they will
Release funs on a confirmed delivery or positive feedback ,
We are having to call pay pal and spend hours on the phone to
Have funds released that have been confirmed delivered and
Positive feedback was left , one paypal agent even called me crooked , A buyer here in town picked up their item and left
Me feedback the same day , they said it was a fraudulent feedback because it was left the same day and refused to release the payment
Thanks for the story
From George – Mishawaka, IN eBay sales have plummeted since all the BAD press & policies: new Best Search algorhythm hiding little people's Auctions (80% of eBay Sellers) underneath the PowerSellers, 21-day PayPal HOLD, and 100% Negative feedback starting in May. Soon a Ton of tiny Sellers are going to CANCEL their PayPal accounts, "Absolutely NO PayPal accepted – period!" Money Orders & Cashier's Checks ONLY! This will only draw attention from eBay that will get all their accounts Suspended in a hurry. FACT is, with gasoline nearing $4.00/gallon, and the cost of living continually going up, up, up, fewer and fewer people have ANY disposable income to waste, the online selling Bubble is going to burst (if it hasn't already).
From robin, greenville, sc What you have to understand is that Paypal is NOT a bank, they are a money market fund. They are completely unregulated and can do whatever they want with your $. You agree to this in their TOS. You also agree to free PayPal from any liability even if they break their own TOS and the law.
Go to http://www.nopaypal.com and spend some time reading.
When I started my company we used PayPal. At one point we were a Tier1 client @ $1M/yr. They still treated us like crap and pulled all kinds of scams on us. Read the whistleblower threads on nopaypal.com. I can personally attest to 2/3s of them.
We are not some fly by night outfit either. We manufacture a physical product – RC cars.
The last time they pulled thier nonsense I called my lawyer. He called PayPal's lawyer and suddenly they reversed course and gave my money back.
After which I closed my paypal account and got a real merchant account. Less expensive, regulated, rules are followed and in 6 years I've never had a problem where I was constantly having issues with PayPal.
PayPal is the scourge of the internet financial community. They should either be forced to comply with FDIC rules or disbanded.
From Raia, Mt Hood, OR PayPal is owned by eBay and eBay is all about greed. Sadly, this is just another addition to their agenda. eBay is failing, so they're making the push for PayPal to make up the difference.
Gluttonous, greedy monsters.
Thank goodness for the other options now available!
http://gurlz.ecrater.com
http://threads.ecrater.com
http://gurlzgoneglam.blogspot.com
From Di, Brisbane Australia Ebay Australia have just implemented a PayaPal ONLY policy. ALL payments are paypal only. Prior to this coming in we could easily do internet transfers for no cost from one bank to another now we have to pay for paypal fees – but what worries me the most is I hear so much about paypal holding funds and you have no recourse.
I KNOW how frustrating it can be to have no one in a company to talk to to try and sort out problems as Ebay is so typical of this. Paypal is even worse.
Something needs to be done about paypal. I will never use that service again. Ive cancelled my account with them.
From Jabbar To everyone upset at Paypal, don't worry because help is on it's way. I have an online payment processing service launching a little later in the year that will do everything Paypal does, but with more features.
I cannot divulge the name of the site yet, but if you want more information, email me at: Jabbar@cjwnetwork.com and I can keep you posted as to when the launch date will be.
Thank you!
Jabbar
From Mana, Indianapolis, IN Pay Pal and Ebay ganged up on me together and now I am off Ebay and Pay Pal has 1400.00 of my hard earned monies in their possesion. Evertime I call pay pal, they tell me to contact Experian who just wants me to buy a credit report. I aksed them if I need 5 star credit to use their service and they said they do not look at credit reports. So what is going on then??? Since they Froze my money for no reason and will not give me any details Ebay mysteriously closed my account with no explanation other than I have been "Abusing" ebay. I am an honest person just rrying to make a living and both these companies have took everything away from me. Now i have to wait 180 befroe pay pal will release my funds. CNN can you investigate this new Mafia that is getting away with everything anymore?
From Robert I’m emailing in regards an article I read on Pay Pal holding funds for 21 days. I’m currently having a similar problem with them but it’s not for holding funds for 21 days it’s for holding funds for 180 days. Pay Pal is about to destroy my company and thousands or possibly hundreds of thousands of other customers.
They decided to freeze my account and request me to provide them my personal social security number and suppliers. After making a routine transfer to my bank account ; I’m a small business I can’t take any delays at all I must pay outstanding loans and keep credit in good standing. With Pay Pal holding funds there’s no way I can do this.
I’m sick of Ebay/Paypal getting away with murder there are so many outstanding lawsuits against them it’s just ridiculous.
I’m emailing you guys because I’m hopeing someone in your department will follow up with that original story and make it public maybe even big enough to push Britney spears out the headlines.
P.S. To let you know Pay Pal is holding over 6,000.00 that seems to be exactly what they are holding on everyone else’s account below the exception of a few larger ones.
http://money.cnn.com/2008/02/08/smbusiness/paypal_funds_freeze.fsb/
http://www.paypalsucks.com/forums/showthread.php?fid=3&tid=28739
I hope this is a good story for you guys.
From Bob Matick, Canada I made a small purchase on Ebay and paid with PayPal. PayPal is holding funds from the seller. My account has been debited. At one point my PayPal account shoed the funds cleared. When I complained baout this seller not receiving funds, PayPal removed the confirmation notice from my account. However I do have other written confirmation From PayPal that the funds have cleared.
In my veiw PayPal is operating in a fraudulaent manner. And buyers and sellers should be concerned. They have access to to your CC's and bank accounts. If they cannot be trusted with with a simple trasaction I had how can PayPal be trusted with any of your information.
From Ans / Royal Oak/ MI I'll do my best to inform and report to internet comunity my paypal experience.( I mail and call to many times paypal, but I feel like they don't even look at my account or help me to resolve it. They want to avoid to resolve and keep account limitations.)
I'm not give up!!!
From Richard Rahall, Tierra Verde, Fl For anyone who lives in the state of Florida, the first stop with any complaint against paypal is the Office of Finicial Regulation. Go to State of Florida website. A copy of Paypals license is online. Fl. Statues 560, Money Transmitters code.
From A. Mathews, Tucson, AZ PayPal is legally breaking the law. They do what a bank does. They transact funds like a bank does. They have debit cards like a bank does. They take debit cards as Credit Cards like a bank does. They earn money on our money when they hold it for 21 days as a bank would. But they are not required to pass the interest to the owner of the funds like a bank is. (That is what an escrow account if for in a bank) They don't have to follow the law or rules like a bank does…etc.
What is WRONG with this picture… Dear banking commissioner and FDIC – hello "Governors" of 50 states – Are you just going to let PayPal get away with pretending they are not a bank? Change the law! Bring them "in". Make them accountable! Protect our money!
They have no right to force me to send an item to anyone when I have not received payment for same! They have no right to mark me as a "poor risk" because buyers don't like to pay for "priority mail with insurance and confirmation with a signature" and I can't send items any other way since ebay no longer allows for negative feedback to a buyer, which then allows for con artists and theives to flurish in "the land of no negative feedback".
Gee – this looks like a pretty vicious circle ebay has created!!!
I am very unhappy and though I really need an extra income I am looking everywhere for alternatives.
Ebay + PayPal = "The New Mafia"
From Kim Rahall, Tierra Verde, FL I agree paypal is a scam enabler. I think everyone of us sellers who has been scamed by payapl need to ban together for a class action lawsuit. The buyer stole my merchandise and money and paypal drove the get-a-way car. I posted on this site about ebay however ebay/paypal are one in the same since one owns the other. I say who cares about the 21 day hold you should boycott them forever. I sold a gold necklace and delivered the merchandise on December 14, 2007. The buyer originally tried to offer me less than the buy price and I said no, he paid the buy now price, paid for the item and I sent it priority insured mail so I could have the SELLER PROTECTION. Upon receiving the merchandise the buyer stated he wanted a discount of $160.00. I said no, I stated no refunds but to be fair told the buyer to return the necklace priority insured as I had sent to him and I would give a refund minus the shipping costs. I was told no, it was for a Christmas gift just give him the discount, when I insisted no return the merchandise he said I could arrange for pickup at my expense AFTER THE HOLIDAYS which was 3 weeks later. I contacted ebay and discussed my delemma with them. Ebay assured me I had SELLER PROTECTION as a premier account status and that I had followed the rules for shipping and would be proctected. I questioned them on giving in to the $160.00 and was advised not to do that. I specially questioned them about taking the money from my paypal account and spending it because I did not want to be caught once I spent the money. I was assured again to take the money as I had SELLER PROTECTION. I did just that and paid my bills which was the reason for having to sell the necklace in the first place. The buyer filed a complaint with paypal for a refund and paypal tells the buyer they cannot refund the money and then paypal asks me to rate them on their decision following the complaint for which I say YEAH FOR PAYAL. Come January 4, 2008, paypal contacts me and says that the buyer has filed a chargeback with his credit card company and they have debited my paypal account for the amount. On January 17, 2008, PAYPAL DEDUCTS THE MONEY FROM MY PERSONAL CHECKING ACCOUNT WITHOUT MY KNOWLEDGE. I contact paypal and they say sorry for the wrong information SELLERS NEVER HAVE PROTECTION FROM CREDIT CARD CHARGEBACKS. We will fight for you please provide us with any and all information you have. I send paypal all the information including the initial offer to buy the necklace for less money. Paypal assures me I should win because if they did not feel they had a case they would NOT fight the credit card company. I ask where is the money you took from my checking account. They say they did not take it. (Like I would voluntarily give the money to them without the merchandise.) I am told the money goes into a holding account. They state for the PROTECTION OF THE SELLER, the money is deposited in their holding account until the matter is resolved to help assure the seller the buyer does not get the merchandise and the money. I fume but what choice do I have they have already TAKEN THE MONEY FROM MY CHECKING ACCOUNT. I am told the process will take 75 days. I keep checking with paypal for a status and they keep telling me they are investigating and understand my concerns. By February I really need the money to cover the bills. Paypal tells me the credit card company has sided with the buyer but no one can prove that the buyer has returned the merchandise so they will file a followup with the credit card company. I asked them to please contact the buyer and settle for the $160 refund as I really need the money back or the merchandise to resell. I am told they cannot do that it has to be the credit card companies decision. I AM BALD FROM PULLING OUT MY HAIR NOW but paypal assures me it will be ok they have the money the buyer will not get both. I asked them to please respond to the credit card around the 17th of February when I found out about this. Paypal says NO we have until the 28th of February to respond and we will not respond until the 28th. I ask how is this protecting me as the seller? I am sorry for the wrong informaiton is all I can get out of them. Today, the 5th of March (only 6 days after the 28th of waiting for them to respond) I get an email stating they have resolution. It says the credit card company agrees the buyer, please contact the buyer to resolve your issue and get your merchandise back. I called paypal in disbelief. I said what? Where is the money, I was told paypal gave the money to the credit card company who filed the chargeback back in January. DO YOU THINK I HAVE ANY HAIR LEFT AT ALL TO PULL OUT???? I said what? That money is to be in a 3rd party account and I was told it would not be released until I had the merchanise back. I got the same response…I am sorry for the wrong information credit cards do not work that way. I was finally esculated to Connie in the legal department who told me to call the buyer and make arrangements to get the merchandise back. I state the The buyer is in Colorado and I am in Florida. I said you think after 90 days of him having the merchandise and you giving back the money 60 days ago and lying to me about where the money has been that the buyer is going to say, oh yes let me overnight the merchandise back to you at my expense no problem. Connie said it did not matter what she thought, it was between me and the buyer. I said he could send me an empty box and if I signed for it you would say I got it back right, and she said YES. This is BUYER THEFT WITH PAYPAL DRIVING THE GETAWAY CAR AND LAGHING IN OUR FACE. THEY NEED TO BE STOPPED. I plan on telling my story to everyone, my local media news people, my congressman, the FTC, and maybe even the FBI. If I stole $1500.00 I would be in jail. CNN SHOULD help investigate this for the sellers. This is just the surface of what is probaly going on. Paypal is a multbillion dollar corporation who is STEALING from average people who they know do not have the resources to fight. SOMEONE PLEASE HELP
Kim Rahall, Tierra Verde, Florida
From An,MI Paypal is a scam!!!! i've ever seen.
They holding my money for more than 2months, and they don't even care.
From Michael, Provo UT PayPal is just a a scam enabler. The buyer is always right, the seller is always guilty. Buy anything off eBay, file a PayPal dispute for 'not as described,' and ship a stripped item or brick back to the seller. You get the product and your money back. There is absolutely nothing the seller can do, and PayPal doesn't care. I've had them call me a liar and lost thousands from buyers using this scam. Now with the recent changes, things are getting even worse. I'm done- walking away from my rating, my Power Seller status, and my useless PayPal account. Selling ANYWHERE else is a better option now, and I'd be treated with more respect/dignity if I took a job at McDonald's.
From David Bolding You reference an estimate on the interest revenue (income) generated on
the 21 day float. The relationship of this revenue to overall revenue is
not as significant as that compared to overall income. Because it has no
related cost, it (the interest revenue) is all income. And, $40MM a year is
much more relative to Ebay's overall income than to it's revenue.
From technobee, ny, ny If people are having huge issues with PayPal not being FDIC insured and not a bank, then you should contact your representative and Senator asking them to look into forcing them to be a bank. It's US laws that let them operate that way. They're a bank in Europe. And it would mean that they'd be regulated like one and wouldn't get away with some of the stuff that they do.
From Kay, DFW area Texas Paypal recently (January 2008) allowed my PP account to be hacked for over $1500 by an UNCONFIRMED Paypal user in CHINA! And it took 3 weeks of constant follow-up on my part to finally get the $$$ back in my checking account. I felt SO much confidence in Paypal (NOT!) since their reps they told me the debits were obviously bogus 3rd party log-ins from CHINA & Paypal SHOULD have caught/stopped them, but didn't….. They need to clean up THEIR own house instead of continuing to take more from us. Paypal should be held accountable. There have been many other recent hacks to Paypal accounts & I would love to hear HOW these are happening & if there WAS a Paypal security breach in mid-December 2007. If so, why were we NOT told so we could protect ourselves??????
From Tim Vandermark Paypal is the biggest rippoff company I have ever seen. It hasn't changed since ebay bought them either. They make up a reason to hold your money all the time. Sometimes for 6 months or longer. They are not a bank and there is nothing you can do about it, I stopped using them a long time ago.
From gc middletown,ohio boycott ebay and paypal til they crash and burn
From George Welk Ebay is not mindful that it is the so-called small sellers who are still the backbone of their revenue.
Every change thay are making is targetting them.
You can find case after case where "powersellers have hundreds of negitive "feedbacks " which they make no attempt to resolve as their volume keeps their heads above water (In addition to lining ebays pockets)
A small seller is at the mercy where just a few irresponsible buyers can ruin their small business.
Will ebay look at case by case transactions, no way. !
Playing "Big brother"is not the way to go
They have truly over-stepped their authority and created an unbalanced playing field.
From keith cnn should investigate the evil ebay/paypal empire a little deeper….ebay regularly suspends listings,suspends sellers in what ebay claims is vero reports directed at sellers.ebay never investigates vero reports submitted.inquires fall on deaf ears at ebay even with documintation that no vero report infractions ever happened.after a seller suspension, paypal freezes your account activity(paypal freezes your money for 6 months) sellers are left with merchandise and they're money tied up.after this experience, I will never buy or sell on ebay nor use paypal again.
From Isa from LOS ANGELES CALIFORNIA Paypal is run by a bunch of crooks who don't care about anyone but themselves! When eBay took over the company it was supposed to give Paypal some credibility but I think it just made eBay look worse. If eBay would let Google payments be accepted, they would take over in NO TIME! They know that and they're never going to do it – what really annoys me about that is that they lie and say it's "not secure." That is a bunch of bull! They just don't want to tell the truth that it's a better payment system and would put Paypal out of business post haste! The best solution I see and what I hope happens is Google coming out with an eBay competitor. They would have so many eBay defectors right off the bat! I wish they would do that!!! PLEASE GOOGLE S.O.S!!!!
From james williams dallas tx as a new paypal pissed off customer…as soon as i try to withdraw MY MONEY from a sale paypal "restricted" my account. this meant every time i logged ont ebay i got a windows security warning about "unsecure and secure items on page",followed by a message from paypal "account restricted for suspicious activity" followed by an "invitation" to paypals "resolution center" to verify my bank account.i thought that was pretty suspicious activity on their part. this supposedly safe, secure company suddenly didn't seem very secure. numerous calls to their 'customer disservice line have yet to yield an explanation. in fact they deny any knowledge of following a windows security warning with request for bank info.
From JP, Los Angeles CA Not being FDIC insured is going to catch up with them at some point.
More on the FDIC here: http://www.peerpapers.com/essays/Pros+And+Cons+Of+Federal+Deposit+Insurance+Corporation/119965.essay
From sean I used Pay Pal for years thinking it was a great way to be protected when buying and selling on Ebay. WRONG. I purchased a sweatshirt from a dirt bag seller with a lot of positive feedback.
He took my money and never shipped the product. Item purchase price $31 refund after escalation for non shipment to paypal $5.98 yea thanks for nothing.
From gauctions eBay and Paypal are run by the same group of customer support if you ever know anything about the audex system they use you will find that you can go through eBays customer service unit and actually by nae get transferred to people in paypal (yep you actually can )
I have known people in paypal that told me the scoop on them really i would never trust paypal again
At the moment i use Google Checkout and i find the cost 100% cheaper than paypal No wonder ebay didnt want people using google Check out
If i was Google i would start my own auction site and reject all ebays adverts and then eBay will know what its like to do things the way they do
ANyways the Point of this is to advise people of alternatives and the costs
Google Checkout is 100% cheaper than Paypal and you can use google check out on http://www.ebid.net
eBay is run by the directors and they are not even sellers on the site so i would say to anyone that doesnt need to sell on ebay to Go switch to google check out and move their buying to http://www.ebid.net also for many of you that dont know remember you need to be careful if your not an auction professional
http://www.ebid.net Auction site with 1 off payment for free listing for life
http://gauctions.wordpress.com/
see some of ebays TEST AUCTIONS
From thomas vista ca I am missing something?? $10 mil per quarter = $40 mil per year of pure profit. 1.7 Bil in revenue, say they net 25 points on that. thats $425 mil net… $40 mil is damn near 10% of NET PROFIT. that's not just a drop in the bucket imho!!
From Haywood Los alamos alaska Sellers-check out http://www.sellmyinventory.com for great deals on liquidation merchandise to sell in your auctions.
From MP Yonkers, NY Paypal caused me to be subjected to identify theft. Now, when I sell on eBay, I can only accept money orders or checks. Therefore, many potential customers do not respond to my listing, as they feel that Paypal offers them "protection."
From topseller Albuquerque NM To: Bean Counter
Either you work Paypal or Ebay or they should hire you.
I have lived with Paypal for many years and fortunately have not been burned BADLY. I especially like when ebay touts the winning bid is a CCONTRACT between buyer and seller and up to this point, Paypal only sees it as a contract that the SELLER has to honor not the buyer. [With the new rules Ebay has joined the "bury the seller" fray by allowing buyers to to anything they want NOT to honor the contract].
If the 21 day rule was done with FAIRNESS and not by some trumped up DSRs that mean one thing to the buyer and another to the seller and a third to Ebay then I would agree. Unfortunately it's a purposely flawed rating system to suck money out of sellers..a thinly desguised way of dropping $40 mil to the bottom line.
Paypal will release money when the buyer gives positive feedback? What if they DON'T give the VOLUNTARY positive feedback…what if they are happy but don't leave feedback at all?
Do you know that if you happen to get under 95 percent happy buyers in 30 days you automatically get your funds held? All it takes for an HONEST SELLER is 1 buyer on a rampage in 19 transactions for you to lose it ALL for a year.
Even banks don't hold ALL your deposits for 3 WEEKS IN CASE the money you deposited is counterfeit!
Oh Yah…Paypal is not a bank.
That's what this country has been built on….GUILTY UNTIL PROVEN INNOCENT.
Why don't you tell your company that you want to delay your paycheck for 3 weeks more than it is. Since you have so much CASH FLOW your company should be very pleased with your contribution.
From Bean Counter, Westchester CA Enough of this gnashing of teeth and moaning already. PP is – and always has been – simply a company that processes payments. Do they have some uncommon rules, yes. But they are not a bank, so they don't play by bank rules. If you don't like the PP rules, you DO have other options. (GOOG checkout already being noted.)
And anyone can sign up for the PP Money Market account, so you can earn interest on funds that are in a PP account.
An awful lot a griping is about the 21 day hold. Nothing new about institutions holding money, be it a bank, credit union or some other financial institution. You want to avoid trouble, stop trying to rob Peter to pay Paul. Doing so simply indicates that you don't have enough capital to operate your business properly. Time to sit at the adult table and get a real business merchant account, proper operations funding, and, if need be, other service provider(s).
I'm happy with what PP does – and does not do. PP is just a payment process company; not a bank, not a lender, not a credit union, not a financial services company. Keep that idea in your head and you'll do just fine.
From Rusty, Prattville, Alabama I don't appreciate PayPal holding the seller's money for 21 days. The seller coulds earn his own interest off his money.
From David Goldsboro, NC Paypal is a horrible "company". Check out many horror stories at https://www.paypalsucks.com. We'll see if all of the playpal kool aid drinkers are as high on them after their feedback percentage is attacked in May. Google Checkout is much better/cheaper and her is the link https://www.google.com/accounts/ServiceLogin?service=sierra&continue=https%3A%2F%
From Former Powerseller Forcing sellers to leave money in a non-FDIC-insured account for 21 days is unconscionable, especially now that eBay is forcing sellers to use PayPal (new sellers, sellers in "high-risk" categories). We have had bank failures in the past 12 months. FDIC insurance is highly relevant in this economic atmosphere.
PayPal plays all kinds of games to put sellers on the hook for PayPal's failure to prevent fraud. I had a customer pay me with a confirmed address; they wanted to add to their order so I refunded the payment and they paid the new combined invoice. Suddenly their address wasn't confirmed anymore. It was the SAME address, and the customer said they only had one card registered with PayPal. I've had other payments show up as having confirmed address, then show Seller Protection ineligible a few days later. PayPal customer service is NEVER able to explain, let alone resolve, these problems.
The worst thing PayPal does is freeze money for no reason, and there are plenty of people reporting that happening, even today. The worst thing they do on a very wide basis is their follow-the-money reversals. If Buyer A pays seller B, Seller B pays seller C with the same funds, … seller X pays seller Y with the same funds – and then PayPal decides something was wrong in the transaction with Buyer A, every seller in the chain can get hit with a reversal because the "source" of the funds was fraudulent. What buyers don't realize is that if PayPal reverses their payment, the buyer still legally owes the seller the money. So much for fraud protection.
From M, Kaneohe, HI However, company executives and industry analysts say the money PayPal makes off such payments has a negligible impact on its bottom line.
Minimum $40 million dollars a year pure profit, is "negligible"? Do any of these analysts think eBay/PayPal would do a 21 day hold if it cost them $40 million dollars? Would any analyst??
And for small businesses this money derives from, just when is THEIR $40 million dollars negligible to THEIR bottom line?
Maybe analysts and reporters would be less cavalier about $40 million dollars, when it comes out of their pockets.
From CEP Kenosha Wi The real fun part of the paypal user agreement is the fact that the money goes into the corporations account. They tell you if someting happens to that corp, then your SOL.
From Jason Salses Farmington Michigan Paypal is garbage. Their user agreement states that that can freeze your funds up to 180 days for any reason they deem necessary. Sellers are much better off with a traditional merchant account.
From Tim Bonelli Elkhart, IN The article states in part, "…EBay does not break out PayPal's earnings in its financial statements, meaning analysts must rely on their own estimates of the division's profits. …" They call it a "division." A couple of years ago, I tried to find out from eBay if PayPal was a Division or a Subsidiary. They called it "an eBay Company." They ignored numerous requests as to PayPals legal status in relation to eBay and finally told me they were a "Subsidiary." As such, PayPal is supposed to be operated "at arms length" to it's parent company. It is obvious this is not the case when you read all of eBay's ruiles regarding PayPal. In other words, they are "piercing the corporate veil" which should be illegal. Corporations set up Subsidiaries vs. Divisions to gain some advantages.
Which are they…?
Tim
From James Denver Co There is a difference between "revenue" and "profit". Compared to revenue the interest earned is made to look small. I doubt that it is so small.
We as users know that PayPal, for whatever reason at whatever time, will freeze funds. They indicate this is not for any earning reasons. Many users do not believe this is so but since we sign away any rights we have in the User Agreement it is purported to be legal.
PayPal does not want to be considered a a bank so they do not have to follow the laws and regulations that banks do. Sellers are falling through all the PayPal loopholes which seems to be more of a minefield that sellers have to be aware of before deciding to accept payment.
It is now getting to the point with the new eBay policies that the government should step in and look into some of the highly questionable practices that PayPal undertakes in the name of "safe payments".
From LV Dallas TX Paypal is one of the heaviest handed companies I have ever dealt with.
I once sold an item on Ebay to a person who had a Paypal email address. He ended up being an exec of Paypal. He was very satisfied with my product and service and told me to email him if I ever had a problem.
A few months later I had a problem. [Preface: both Paypal and Ebay "encourage" buyers and sellers to work out their problems between themselves]
A buyer of one of my Ebay items lost his credit card MONTHS after his transaction with me was complete and he had left pos feedback for me. Paypal immediately froze the funds on that transaction telling me that "I possibly got paid with fraudulent funds".
I contacted the buyer, he apologized for the aggravation and he sent me a money order for the amount of the original transaction. We worked it out between us. All's well, right? WRONG.
Paypal charged me a $10.00 "resolution fee" on the $25 transaction.
I couldn't figure out why I was being charged when 1) WE worked it out between ourselves and 2) I had done nothing wrong to begin with.
I called Paypal and got the usual "we can do anything we want to you because you agreed to the user agreement" speech.
I emailed the Paypal exec, told him about it and immediately the fee was reversed in my favor.
A few months later the same scenario with a DIFFERENT buyer…same result, same email to the exec.
I received a call from an underling at Paypal stating that "if I insisted on contacting Paypal execs, my account would be restricted or terminated."
The exec had TOLD ME I could contact him.
That should outline the mentality of this company.
From Chris Augustine Cary, NC PayPal is about as transparent in its processes as a pond of mud. What they actually do with money has always been a matter of conjecture. PayPal has written their every changing User Agreement to give them plenty of loopholes to do just what they want. God forbid if you ever have a problem with PayPal because they could care less. PayPal can and will pull funds from any user and just write it off to fraud. This and they won't tell you anything. It is my opinion that PayPal claims fraud on good transactions to cover other fraud occurring elsewhere. It is a longstanding common belief that PayPal will keep all monies in a chain of transactions even if the only one fraudulent was the first. PayPal needs more accountability. EBay will one day be held accountable for PayPals sins.
From Pat Fowler, Columbus, MS PayPal is a part of eBay monopoly. The problem with the 21 day hold is that the shipping fees that the buyer pays the seller after winning the item is included in that PayPal payment. Hence, the seller must dig into their own pocket to ship and won't be reimursed. This can be devastating for any business, not just a small Mom and Pop one. eBay/PayPal wouldn't need to take such extreme holds if PayPal actually verified ALL users (to include a buyer) prior to allowing them to use PayPal. There is a more hidden reason for this new move. It is the same reason that eBay won't separate eBay and PayPal revenues for public and/or stockholders to see. That is PayPal is the most risky online payment system to use. PayPal does NOT verify a payment, or a user, prior to using their service. They are overripe for fraud and it happens daily with eBay/PayPal. Unlike Google Checkout with highs a higher safety use by verify ALL users before the first payment is processed. eBay/PayPal could do the same thing, but why would they? They will get the money regardless because if a payment turns out to be "fraudulent", then they hit the seller up for the money and in some cases, that has happened a year or more later.
With eBay/PayPal, chargebacks are much easier to do than any other online payment service. Why? Because eBay/PayPal does not have to insure a user is verified – if a "chargeback" is done simply because the buyer has buyer remorse, the PayPal User Agreement may side with the seller and initially deny the reversal, but allows a Credit Card Company to do a "chargeback". Then, PayPal has "no control", so the seller is really in a LOSE/LOSE situation.
There are no dummies at PayPal – some of their attorneys that design the User Agreements are actually Federal Attorneys that were enticed to work for eBay/PayPal. The only dummies are those that wait until they are hit with a "winning situation" with PayPal only to have the Credit Card Company do a chargeback and PayPal can say "we tried". Yeah – right! I am proud to say I no longer use, nor will I ever again use, PayPal.
From Ken, Chelsea, Ma. I would tell ebay/paypal that you won't ship the customers merchandise until the funds are safe and secure in your account. The buyers will stop buying if they have to wait an addional 21 days to receive their merchandise. Hmmmm…..what percentage of transactions will be considered "high risk"? With the interst that they make….I say 100%.
Also, high risk for who? ebay doesn't lose money. The seller is the one that would be out of luck.
From Trudy Self Lake Arrowhead, CA S10 million a quarter is $40 million a year and that is pure bottom line revenue that drops straight to EPS. It would therefore have a much greater effect on quarterly results than is apparent at first glance.
From DJ Bryant, Winston-Salem, NC This is really an attempt to boot the smaller seller (whom the CEO relates to trailer trash flea market people) from FeeBay. As a small seller just starting on FeeBay, I'm looking at other options.
From Paul U., San Francisco, CA This is why it is so refreshing to see Revolution Money Exchange come on to the scene. Finally there can be some serious competition to Paypal.
The nice part is that these guys are not scared to operate under the auspices of the FDIC. I actually find it a bit comforting to have my monies insured as opposed to being in the greasy hands of Paypal.
From doug spencer overland park kansas I trusted PayPal once with my account info, but apparently someone within or outside of paypal used my banking info and attempted to withdraw $3000 from my checking account. I had to change my bank account number. Thanks, PayPal!
After listing two sets of football tickets onn StubHub, I received a notice to print mailing labels and to ship the teckets to those addresses. Four to five days after the shipments, I saw that two payments had been made to PayPal. When I checked my PaPal account, neither of these payments had been credited over the three days since. In this electronic age, the transfers should have been instantaneous.Instead, Paypal is using my money to gain interest that should be credited to my account, not to its account. Isn't this a violation of federal or interstate commerce regulations?