Clealry it is Now
I can say this as I have never used them and see even less reason to start using them now.
PayPal's released a new batch of User Agreements that includes a new “non-discouragement clause for sellers” that prevents them from talking down the service, plus price hikes a-plenty. The new new clause reads as follows: “In representations to your customers or in public communications, you agree not to mischaracterize …
Oh, I still use them for some things, but I'm busy setting up a new service and you can bet your cotton socks that we won't touch them with a 10ft barge pole.
As a matter of fact, I expect some other changes to happen in the payment market towards the end of the year that may *really* put the cat amongst the pigeons. It'll be good news for users and merchants, less so for the likes of PayPal. This is but a minor ripple.
Oh, AMEX run an interesting "scam" (the quotes are for the lawyers)
They offer rather hardcore incentives to use the card, but you don't need to look hard for who pays for those nice shiny presents: the merchants. The reason merchants very much dislike AMEX is because their apparent largesse is paid out of their pocket by means of fees that are FAR higher than of other providers.
So yes, I can see why AMEX is not preferred.
Assuming the price is the same with Paypal as with other payment methods, it isn't your problem if merchants get charged twice as much for using Paypal as using credit cards. I use paypal where available because it eliminates the chance of the merchant being careless with my credit card number and me having to hassle with a getting fraudulent charges canceled and a new card issued (granted the only "hassle" that really exists with this process is that it takes a bit of time for me to memorize the new credit card number)
Of course the risk is that the higher fees will make merchants who currently offer the option for paypal less likely to do so, so you have to go back to using credit cards for those sites, but again that's not my problem, that's paypal's problem.
I mostly use PayPal to buy from small vendors whose security is unknown - i.e. buying Flight Simulator add-ons (and even PayPal has only access to a rechargeable debit card). But increasing fees could be exactly bad for small vendors.
But this is a warning flag about the risk of a few intermediaries controlling a large share of accesses to goods and services, and thereby the fees - be them an OS store, a payment method, or an intermediary app....
> I use paypal where available because it eliminates the chance of the merchant being careless with my credit card number
But have you factored in the risk of having to deal with Paypal?
At least proper banks have codes of conduct they must adhere to, and an ombudsman you can turn to if they don't.
No risk, I use a credit card for Paypal - I'd never give them access to my bank account! If I don't get satisfaction from them, I'll have my credit card provider reverse the charge to Paypal. Never had to do that though, I've had nothing but good dealings with Paypal.
Even when I've sold a few things on eBay over the years, no problems. Since they don't have my bank account info the money just gets held as a credit, which I then use for future purchases.
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"If I don't get satisfaction from them, I'll have my credit card provider reverse the charge to Paypal."
If you're from the UK this may not work - other countries may be similar or different. Generally credit cards have no protection if goods are purchased via an agency so you lose the protection if you buy via pay pal even if you pay with a credit card.
You are paying pay-pal and pay-pal are paying the supplier. If the supplier goes bust you can't chargeback against pay-pal as they haven't gone bust you have rely on pay-pal's protection, which isn't great and is not part of law it is only an pay-pal feature which they may try to wriggle out of.
I lost a lot of money when pay-pal decided they wouldn't allow me to use their protection for a dodgy e-bay purchase.
> I upped my price by 5%
Presumably you're not selling something which has a lot of competition, otherwise the large sellers, who can afford to absorb the hit, will come up cheaper than you when someone selects "Price Low-High".
This creates an inevitable "Race to the Bottom" on pricing which drives small sellers out of business :-(
Assuming the price is the same with Paypal as with other payment methods, it isn't your problem if merchants get charged twice as much for using Paypal as using credit cards.
It is if that cost is passed onto you as a customer. Paypal don't let sellers directly charge extra for using Paypal, so guess what happens? Prices rise across the board.
I've had to have discussions with customers in the past who wanted to pay via Paypal and explain that the cost will be higher to cover the fee's Paypal levy.
Ultimately, I don't value my time any less because of the payment method you want to use.
I haven't sold anything directly online since the EU VAT changes (just not worth the overhead & risk), but in the past, where Paypal's fees have risen, so have my prices.
What does suck, for all involved, is Paypal's (understandable) insistence that you can't pass directly pass the fees on. If I was allowed to add a ~5% line item, only for Paypal transactions, that'd at least lead to Paypal losing business (as you'd probably pay with a credit card instead)
After 9 years, for no reason PP have limited my account.
After speaking to their drones they said they wanted a credit card statement AND a copy of a bank statement AND a copy of my passport or driving license.
After politley explaining they weren't having them, they simply *refused* to do anything until i furnish them with the three most sought after pieces of ID there is.
I have decided to close my paypal account, Oh hang on, i cant do that either because my account is limited. Spoke to the financial ombudsman, they are useless, their mantra is "Paypals terms and conditions state blah blah.. hand over your documents to them blah blah....
When the inevitable data breach occurs, i will have some comfort in knowing that my details arent there to be stolen and potentially used.
They ask for all the documents a bank does but offer few of the same protections. Freezing user accounts on a whim? Isn't that for criminals! But the way they're trying to intimidate and coach users now is practically cult-ish..... The Bank of Scientology orders you...
Rallying on a single comment without actually knowing why that account was limited may be excessive. Are you sure it was frozen on a whim? Or because they spotted something that needed investigation? Paypal, like many money transfer services, could also be used for illegal activities. I'm not saying the OP did them, but the behaviour may have looked alike.
@johnfbw "Most of that is because they need to do it by law for anti-money laundering regulations. Three pieces is excessive, but nothing more than your average bank would request."
Sorry, I call bollocks on that. They're not a bank as they make clear time and again when they do what they want and users can't hold them to account like they can with a bank. You can only put money in via a Credit card or a bank account and those methods will have fully vetted your ID before opening your account. You can only get money out via a bank account.
Paypal are a payment processing service, acting as an intermediary and nothing more, and they're certainly not a bank account. It'd be like Apple or Google demanding your passport and birth certificate to use Apple Pay or Google/Android pay (which simply acts as an intermediary between card issuer and merchant account).
Full disclosure: I too have had my PayPal account frozen because they want details that I'm not going to give them.
"Sorry, I call bollocks on that. They're not a bank as they make clear time and again when they do what they want and users can't hold them to account like they can with a bank. You can only put money in via a Credit card or a bank account and those methods will have fully vetted your ID before opening your account. You can only get money out via a bank account."
I told them the exact same thing when they pulled this on me. I told them I didn't have to provide photographic evidence of who I was to open my bank account, and that the credit card itself is a form of identification. I got hit with the line "it's for money laundering regulations and we have to deal the same rules as banks", at which point I reminded him PayPal wasn't my bank, they're a proxy to facilitate online payments to vendors. "Yeah but we still have to abide by the rules".
I thought, sod this, so I had some fun. I asked them how do I send the documents to them. "Well you can email us scanned documents and we'll process them within 72 hours". I asked him to clarify the email bit, because it didn't sound safe. "It's totally safe" he said, expanding further that the email goes directly to PayPal. I said he was fucking high and full of bullshit if he thought thats how emails worked, and hung up.
So, about 4 months in to this stalemate, they don't have those three pieces of ID and they never will. The only thing I use PayPal for was eBay - which has since refused to work since this PayPal freeze. But what I found out was that if I created a new account, or used my girlfriends account which isn't linked to PayPal, I can use my debit/credit card through PayPal without an account. Obviously I get the odd email saying "It's so easy to open a PayPal account", which are promptly dispatched to the junk folder.
So yeah, fuck PayPal. I can last alot longer without them than they'd like to admit.
But what I found out was that if I created a new account, or used my girlfriends account which isn't linked to PayPal, I can use my debit/credit card through PayPal without an account. Obviously I get the odd email saying "It's so easy to open a PayPal account", which are promptly dispatched to the junk folder.
I thought you were limited to something like 10 transactions per year, before they *forced* you to create your own PayPal account?
I have a feeling this is by design as they get a lot of extra float from this and eventually profits, though not sure how they work around legalities of seizing your funds at the end. I had the same thing happen to me loooong time ago with them, way before this money laundering witch hunt began, we are talking like 2000 or something. They wanted my debit card number which I did not even have for 3 years or something as I switched banks, they still owe me $50. So yeah fuck them, thrice!
"The Money Laundering Regulations apply to a number of different business sectors, including financial and credit businesses"
"Money Service Businesses",,,"transmits money, or any representation of money"
I think that is pretty comprehensive (Paypal transmits money, also they act as bureau de change so are caught twice). They are covered by money laundering regulations. They might take money form a bank, but how do they whose bank account it really is?
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Anti-money laundering regulations is like the new excuse that was wheeled out about data protection, or health and safety ("Can't do that health 'n' safety innit?", "Sorry, due to data protection I can't tell you why we have overcharged you").
Anti-money laundering is usually the reason given if you try to withdraw or transfer more than £10,000 from many UK banks. However, you can withdraw more if you have one of their premium accounts or pay £25 for a chaps payment. The Faster Payment scheme can be used for transfers up to £150,000. The bank already have all your details as you have opened an account with them.
However you can move over £10k if you do it over several days, or you pay them £25 for the privilege as that proves you are not laundering cash. Yeah, right.
"After speaking to their drones they said they wanted a credit card statement AND a copy of a bank statement AND a copy of my passport or driving license."
I think there is more to this:
1. Companies demand simply because they want it and people provide it thinking they're obliged to or have no choice.
2. Companies are trying something dodgy and need proof of revenue residence (perhaps tax shenanigans?)
I've mentioned this before but I'll do so again as this Paypal thing and your comment reminded me of it. I used to have an Amazon seller account for selling old games/CDs and the like second hand; preferable to flea-bay as it was less of a bear pit (not much but enough). All of a sudden a few years ago they demanded a utility bill and my passport or driving licence otherwise they'd close my account. I wasn't prepared to provide those most important of ID documents considering the relatively small use my account got so let them close it. Now, I can understand a business seller needing to provide some evidence of their existence but not a private individual selling a few second hand items a year (perhaps £50 a year in sales?) especially as they'll have confirmed my address from the credit card linked to my account.
The reason for this? I don't know. Perhaps they want to prove the source of revenue for dodgy tax reasons but it seems a heavy handed way to go about it. It's an issue that will be beyond the mainstream media and their "Just click 'I Agree'" readers but it's also something El Reg hasn't picked up on, sadly. I'm sure most people would have handed over that info without question without really asking why a sodding mail order book seller wants a scan of their passport - one of the most important types of ID there is.
I think these "Don't bad mouth us" clauses are more common than people realise. I guess that they're there more to give the companies another excuse to sue you/fine you/cut you off for something they don't like.
I recall about 15 years ago signing NDAs which included a clause similar to PayPal's.
In the United States, non-disparagement clauses are now illegal. I seriously doubt PayPal's new terms are enforceable in the US.
That's an interesting question. The English Courts have decided that PayPal is a credit provider (I forget the correct term) and therefore subject to Consumer Credit Act claims.
PayPal would very much rather this is not the case, and that it's merely the seller of some dodgy Internet credit notes.
There was a court case a few years ago in the UK where PayPal tried to say they were a bank, but weren't subject to banking rules.
I believe the judge slapped them down and told them to either stop calling themselves a bank or abide by the banking rules.
@LDS - It might mean that but the subsequent sentence: "...you agree to treat PayPal’s payment mark at least at par with other payment methods offered." would seem to cover your point.
The problem is that this is a legal document intended for general consumption and thus whilst the exact meaning of any specific clause is only determined by a court, it should be possible for normal people to understand what is intended. I.e. it should pass the plain English test.
Given the information from other El Reg commentors, concerning the legal status of PayPal with respect to being a formal bank, or Payment Processor, I suspect it is an attempt to shift onus on to the seller to some how include PayPal at their checkout, without grouping it among the legally recognised Banks and/or Payment Processors...
We’ve updated the “Payment Method Used for My Transaction” section...
[PayPal Ploicy Updates Effective March 29, 2017]
Can't find a section with this title in the User Agreement...
But then looking through the updates, as the updates don't clearly define the exact contractual amendments being made, I suspect they could be voided under UK law...
As explained in the article at this ink:
You lose protection that could be important if you use PayPal as an intermediary when paying. If you wish to avail yourself of Section 75 of the Consumer Credit Act, which establishes joint liability between the supplier of goods or services and the credit card company, then you need to pay the supplier directly by credit card (not debit card).
Note that I think the same is true if you buy something via the Amazon Marketplace: Amazon act as an intermediary, and you lose Section 75 protection.
"Your link is wrong. Go dig out the House of Lords judgement on credit intermediaries."
Norman Nescio has provided one of many links that say that Section 75 does not cover you for goods bought via PayPal.
You have stated he is wrong and it is very important to not repeat this but cannot provide a link to where it states that thi sis not the case. A vague reference to something to search for "House of Lords judgement on credit intermediaries", which only reveals information about a car hire issue, something else about credit and then this same forum post is not very revealing. Sure there may be something in the 4 million+ results bu tif you would point to the exact place where it is stated that PayPal is, in fact, subject to section 75 then that would be useful to all of us.
Paypal seems to be taking off eventually - if a little slower than you'd expect from a "wow look at me this is the best thing ever" service.
My local bar takes Paypal (dangerous when you're in there, and confusing when you wake up since it takes a couple of days to come out of my current account - "Oh hey, I didn't spend any money last night!") and I recently had my car serviced by a mobile mechanic who doesn't have a card machine, but will let you Paypal him the money when you pick the car up.
Except he asked me (politely) if I could do it as a friends and family payment to avoid the 4% or whatever. I agreed since he'd done some sterling work for me, and I would say hello to him if I saw him in the street, that we were indeed friends.
Surely the majority of people abuse this system in such a way. Why even bother?
My experience with using PayPal via "friends and family" instead of as a commercial transaction is that the sender of funds pays the fee for "friends and family" while the receiver pays the fee for a commercial transaction. So, if asked to send funds as "friends and family", be sure to determine the fee and negotiate for reducing payment to account for it.
...By not offering other choices on your website.... You never get any business from me! Why? Even where Paypal promises that its a one-time transaction, it never is. Paypal hoards all cardholder details indefinitely in most areas. Fuck that.. Thankfully the real world still exists and there's plenty of real-world shops that still accept cards and cash...
"And what do all the other companies to whom you give card details do?"
Delete it. It's a condition of the PCI certification unless you go to the higher levels.
PayPal, on the other hand, will give your PayPal details to the merchant. Look at all the spam and phishing that comes to your PayPal e-mail address.
At this point, Paypal is a De Facto payment processor, on par with Visa and Mastercard, but without a lot of the regulation, due process, and oversight those two are subject to.
That allows them to treat customers and sellers unfairly, like freezing accounts almost on a whim, and making up policy on the fly, like the Smashed up violin case.
At this size and scale, they have a lot of power, and I think that regulations should catch up with them, and at bare minimum, treat them the same as Visa and Mastercard. Probably not too good for Paypal, as it will eat into compliance and profits, but good for just about everyone else.
I've boycotted them for so many years I can't even remember what it was that ticked me off in the first place. I remember reporting them to BBB and then I remember them buying off BBB to give false reports on their reviews. That's all I remember....
I am in the very early throes of setting up my own web site, which will need payment processing abilities.
All of the goods will be bespoke, hence I will avoid PissPal lest some customer 'decide' that five months later, they don't like it and would like a refund.
I am still figuring out what would take precedence from a UK based website selling perspective - I understand that current law for 'bespoke goods' means UK consumers can't change their minds after the order has been placed, whereas PissPal may give the customer the ability to do so...
Hence I will be avoiding PissPal like a dose of the clap, but am not sure which doors to knock on next.
I am inclined to use shopify.com for doing the fiddly ecommerce bits, but haven't decided on a payment processor yet.
Would any commentards be able to make helpful suggestions?
There was an incident in Canada last week in which a News Media company, which uses Paypal for receiving and making payments, had submitted an article from their newspaper to a Canadian Media Awards company, along with the requisite payment via Paypal. The story had to do with how well a Syrian refugee family was settling in Canada. Paypal, being an American company, then froze the account of the News Media company as it had flagged the word Syrian in the transaction. Their explanation was that the News Media company could have been trying to funnel money to Syria, which is a no no in the current American regime.
Of course, with this being a News Media company, they of course published a story stating what Paypal had done. Hence, the badmouthing part.
This story also raises some VERY red flags. The companies involved are in Canada, not the United States, so why is Paypal applying American law on transactions taking place in a different country? Does this mean they could do the same thing if someone in the UK was trying to buy something from someone in Damascus and was paying by Paypal?
"This story also raises some VERY red flags. The companies involved are in Canada, not the United States, so why is Paypal applying American law on transactions taking place in a different country?"
Because PayPal is headquartered in the US (in San Jose, California). Technically, everything goes through there which means they go through the US and get subject to American laws. Therefore, their activities are subject to American law: particularly those involving the financial sector.
YES THEY CAN! (Does this mean they could do the same thing if someone in the UK was trying to buy something from someone in Damascus and was paying by Paypal?)
PayPal is a bank under US law and as such subject to the petty prejudices of the current US administration.
PayPal often applies it's own restrictions as to what it's services can be used for. Some of these account restrictions can last months with the vendor getting no money.
"At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal;"
This is a worrying clause, as it can be read to mean that a seller with a physical shop - trading as the same business entity, will need to allow PayPal payments at it's physical checkouts...
What really annoys me is that their system is transaction based. Every transaction costs the same for Paypal to process no matter what the transaction value is.
So how do they get away with charging a percentage rather than a fixed fee per transaction?
Next thing you know, motorway toll systems will be stopping your car and counting the number of people in it so they can charge per-person instead of per-car.
PayPal is, in reality, an extension of the US Government particularly since it involves transmitting funds internationally and for 'small dealers' which might well fit the description of social drug dealers and out-of-country prescription drug dealers.
PayPal not only generously make their transactional data available to agencies such as the Department of Revenue, DEA, FBI, and the rest of the alphabet agencies but they also sell their data to credit reporting agencies and tracing agencies (unpaid child support, other debts) including bounty hunters.
Furthermore, PayPal has a habit of freezing accounts for various innocuous reasons which can leave vendors hanging in the wind as their cash flow ceases.
PayPal - a company that should be avoided by a 'country mile'.
P.S. A "country mile" in the USA is equivalent to "all the way over thar" or " a fur piece" or " way over yonder" or just means basically a good amount of distance.
A country mile is also described as the distance between roads when you get out in the farm lands or country in the USA. it was said that the land was originally divided into ten square miles give or take, and then subdivided into 640 ten acre lots.
New PayPal T&Cs prevents sellers trash-talking PayPal
For those of you who complain about verifying your identity you must consider that it benefits you to be open an transparent and Money Laundering rules apply to PayPal.
If PayPal charges the seller a little more than other payment methods it has to be related to the care they take to guarantee an honest and above board transaction.
I see that some sellers want to charge higher prices for the use of PayPal. I am so confident in paying with PayPal that I would pass up any seller who does not want to accept PayPal. In my opinion it is like having an Insurance Policy guaranteeing your transaction.[SIMILAR TO GOOGLE'S SELLER ENDORSEMENT]
Just try getting Google Wallet without Personal Information.
Try getting Pay after delivery from your Bank.
Try making a purchase with a zero balance and never get a decline.
Try contacting any financial institution that offers a unique number identifies you when you call so they can provide you with better service.
Example I called my bank and was on hold for 31 minutes today. On the other hand I have never been on hold at PayPal for more than a couple of minutes.
I COULD GO ON BUT I WON'T BECAUSE IT IS FAR EASIER FOR YOU TO SIMPLY OPEN AN ACCOUNT AND FIND OUT FOR YOURSELF.
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