Mac Musings

Feedback on PayPal

Daniel Knight - 2001.03.14 - Tip Jar

As with most things in life, the Mac included, PayPal isn't perfect. After last week's article, I received some helpful feedback from PayPal users.

Let me preface the negative comments by noting that feedback was overwhelmingly positive, but for U.S. and international users. Buyers and sellers alike really appreciate the speed with which payments are processed, allowing them to ship sold items more quickly.

International Fees

PayPal works exclusively in U.S. dollars, which has got to really simplify bookkeeping. In the U.S., they can process both credit card payments and transfer money directly from your checking account.

One of the biggest complaints among international users is that PayPal requires most of them to pay for their purchases with credit cards. (Users in Canada, France, Germany, and the United Kingdom can pay from a checking account.) In addition, "A small fee applies to payments charged to non-U.S. credit or debit cards." This fee is 30¢ plus 2.6% of the amount processed.

Some users get around all of this by setting up U.S. bank accounts or using credit cards issued in the U.S.

It's Not Always Free

The biggest complaint from Americans is that PayPal is no longer free, which isn't precisely true. PayPal has promised that free service will always be available. During the years PayPal has been available, they have put limits on their free services, but they have not eliminated them.

Credit Card Buying Limit?

I've heard from some PayPal users that they can only purchase up to $250 per month using a credit card if they're signed up for PayPal's free service. I've checked PayPal's terms of use, and don't see it.

There is a $250 spending limit for unverified users; you must verify your email address and checking account to become a verified user. "There are no limits on how much Verified users can spend."

Loss of Credit Card Benefits

A few PayPal users noted that they might lose some benefits they would otherwise have with credit card purchases, such as doubling the warranty. At the same time, we have to remember that many people using PayPal to accept credit cards would not accept credit cards at all without PayPal.

Danger of Fraud

Fraud is a double-sided danger: You may be defrauded by the person selling you an item, particularly when dealing with individuals on auction sites. You may not get what you expected. And if you're selling, the buyer may fail to pay you.

Worse yet, one reader tells of a friend who closed a $425 sale on eBay. The buyer paid with Billpoint, eBay's competitor to PayPal. Upon confirmation of payment, the seller shipped the goods. About 20 hours later, Billpoint reversed the payment due to fraud (apparently a stolen or borrowed credit card), which is allowed by the user agreement.

This is far from the norm, but it is always a possibility. Should anything like this ever happen to you, contact the carrier (UPS, Post Office, FedEx, etc.) to see if you can stop the shipment. If not, contact the police in the locale where the item is being shipped, letting them know the name and address the item is being shipped to, as well as the carrier.

Shipping Address

One user writes, "The only problem I have with PayPal is their (relatively new) insistence that you must have items paid for via PayPal sent to a credit card billing address. If you can't pick up packages reliably at that address (you're gone during the day, for instance) you're stuck. This can lead to ugly misunderstandings with sellers who think that the fact that PayPal lets them 'reject your payment' means that it's OK for them to do this and not ship - even though PayPal explicitly states that you have paid them."

Conclusion

Like most users, I remain satisfied with PayPal. I haven't run into any problem yet - and the comments above should better prepare you for some of the situations you may run into with their service.

Links

• Sign up for PayPal