PayPal
- Thread starter Androo
- Start date
Last week, my buddy wanted to pay me 100 bucks I had loaned him. Since I hadn't stopped by his house in a long time, he thought I should get my money some other way. He looked into PayPal. He thought it really was free. He sent the money to my Email account, and I got a message from paypal saying someone had sent me money, that all I had to do was sign up, and then I'd be able to transfer my money to my checking account. I signed up. My buddy gave Paypal 100 bucks... PayPal was going to give me between $95 and $97.50. Simply because they had deceived my buddy, I did not accept the money transfer, and I instead closed my account. Rats.
I do understand that they need to earn money. I'm used to seeing the placement of ads creating revenue for online companies.
As to them charging 5 bucks in a 100 bucks transaction, I think it's a biggie. With five bucks I can make a student of mine smile five times for getting him a cookie and a milk each morning, for a whole week of school.
It's also a biggie if we take into consideration the following:
1. I don't have the need for 100 bucks ASAP.
2. If I wait a couple of weeks until my friend and I meet, I'll have the whole 100 bucks, not 97.50.
3. In a savings account, you place 100 bucks and at the end of the year you have 101 bucks. A one dollar gain. It'd have taken two years in a savings account to earn those two bucks difference.
Am I a cheapskate? Not really, but I just might be in denial.
When I go to my favorite Mexican restaurant, I leave a 20% tip although it's not a custom to leave tips in restaurants like that one (fast food place, cheap). I pay 2 bucks for 2-liter of soda when I know I can go to Ralphs and get the same bottle for less than $1.25. Third and last example, I'm hopeful to get a good amount of money back from the IRS this year so I can give 33.3% of it to my mother (good for a plane tix to Mexico), and 66.6% to my father (help pay his truck, which he bought for work).Hmm, I do have underwear with holes in them. Pictures later...
That's right. But somebody asked if it was free, and I responded. Someone else (you, Trip) said 5 bucks weren't a biggie, and I begged to differ. Now you say...
Hehe, online you do... me. Well, someone who tried it, anyway.
But really, I wasn't trying to tell Androo to forget PayPal. I was just saying that it's not as free as he had hoped, and as it's advertised. And don't say "nothing in life is free." Some things are arguably free. Depends on whether you value the expensed (other than money) more than you value the gained.
I heard something like...
In the region where I was born, during political campaigns, citizens were given "free" food by XXXXX political party if they vowed to vote for the party when elections came. People went for it. Had one of them been asked if it had indeed been free, they'd have answered "yes, all I had to do was lie to the stupid/corrupted SOBs..."
binaryDigit
Registered
Well just like many things what you're paying for is the convenience. If your buddy mailed you a check, and you had to drive to the bank to deposit it and wait a few days for the money to become available, is it worth $2.50 - $5.00 to avoid all this. If the answer is no, then the choice is obvious, send the check. If the answer is yes, either because the bank/nearest atm is far away (i.e. it would cost more than that in case to do the deposit), or you want access to the money immediately (vs 3-5 days for mail + time to deposit + funds availability), then you would say yes, that amount is worth your time. Of course the biggest benefit of PayPal for most is that it allows someone to effectively "accept" credit card payments.
I can see how you might be confused by the fact that they advertise as being "free", but it is for buyers so it's not totally untrue. And I believe that they are very upfront about telling you that if you accept payments, that they take their cut.
I can see how you might be confused by the fact that they advertise as being "free", but it is for buyers so it's not totally untrue. And I believe that they are very upfront about telling you that if you accept payments, that they take their cut.
If somewhere on their original E-mail (where they alerted me that someone had made a deposit for me to collect) they had mentioned that I wouldn't be receiving 100% of the deposit made, I wouldn't have signed up for PayPal.
Yeah, I'm aware of the above points. Not much of a convenience for me, though, to receive payment online at an expense over having to drop by my buddy's house and save the bucks. He lives 5 minutes off my way -- going to, or coming from, the university.
More than anything, I dislike that they weren't upfront (from what I remember reading) about the costs that would be incurred. My cancelling my account within minutes of creating it was sort of a protest... whether it went known or unknown to them.
CheesePuff
Registered
If you have a personal account (transfers less than $1,000) then you get all of it.
If you have a business account (like most people) they take about 3% or so from each transfer.
If you have a business account (like most people) they take about 3% or so from each transfer.
TommyWillB
Registered
It isn't necessary to send the check from one person to another... The first person can send the check directly to the bank to be deposited into the account of the first person. You don't even need an official deposit slip or account number as long as you know the persons name.
That would require no driving or effort ont he part of the first person, but yes they'd need to wait for mail and the bank to clear the check... Plust the postage $ which person #2 would pay in this case.
Trust me... it is EASY to deposit $ into anyone's account... It's taking it out that's hard.
I don't know what PayPal's exact percentage is (you'd think I'd know that now) but anyhow, I don't.
But, whenever you buy something with a Credit Card, the merchant pays a discount rate. This is usally, so many cents per transaction, plus a percentage of the sale.
Different merchants have different deals, depending upon if they are "face-to-face" sales or online sales. With online sales being the "higher risk" they have a higher percentage.
PayPal taking $3.00 out of a $100 transaction is not much more than a credit card transaction fee that anyone else would pay, Best Buy, CompUSA, or even Apple. I wouldn't be surprised if Apple pays a $64/fee when someone buys a $3299 17" Laptop.
So, by accepting money through PayPal, you become the "merchant" and you must accept the discount that any merchant would pay for accepting credit cards.
Of course, that being said... PayPal does have their personal free acounts, but are very limited.
But, whenever you buy something with a Credit Card, the merchant pays a discount rate. This is usally, so many cents per transaction, plus a percentage of the sale.
Different merchants have different deals, depending upon if they are "face-to-face" sales or online sales. With online sales being the "higher risk" they have a higher percentage.
PayPal taking $3.00 out of a $100 transaction is not much more than a credit card transaction fee that anyone else would pay, Best Buy, CompUSA, or even Apple. I wouldn't be surprised if Apple pays a $64/fee when someone buys a $3299 17" Laptop.
So, by accepting money through PayPal, you become the "merchant" and you must accept the discount that any merchant would pay for accepting credit cards.
Of course, that being said... PayPal does have their personal free acounts, but are very limited.
binaryDigit
Registered
This is no different than a bank. When you deposit your money you don't really think that the bank just has it sitting there do you?
This is one of the ways that PayPal makes money. They play the "float". There is a delay from the time person A sends a payment, and person B transfers that payment to their own account. During that iterim period, they have the opportunity to "invest" that money in whichever way they see fit. There model doesn't quite work as well as a bank, since banks have savings accounts, and I doubt that many merchants allow PayPal to "hold" their money, preferring instead to have it automatically transferred into their bank accounts (note that this still takes a few days to occur).
mfidiothead
Registered
Paypal doesn't get much from the 2.5% they charge - VISA or Mastercard get most of it. Note that they are both now under competition authority investigations for charges of price fixing and running an illegal cartel.
TommyWillB
Registered
And pay very close attention tot he fact that PayPal is not FDIC insured and does not have to follow all of the banking regulations... That means all of the money in your PayPal account can go up in smoke if/when PayPal goes out of business.
I'm not saying that will happen. I'm just saying you don't have the Federal Deposit Insurance protecting your $ if it does happen.
Sure you can sue, but that's not the same thing as having insurance...
binaryDigit
Registered
Never said it was. I just said that what they do with the money while they hold it is no different than what a bank does with your money. Nor do I believe that "it acts like one". It appears that you have some problem with their business model ("keeps all profits off your money"). I don't know what this beef is, since it's the nature of the service they provide. Another poster mentions that they are not FDIC insured, that's true. There are certainly risks you take by using their service (both as buyer and seller), but overall they've provided a mechanism that is very useful for the facilitation of transactions. Similar to credit card companies in this regard. Then again I guess a lot of people don't like credit card companies either, so there you go.
binaryDigit
Registered
Yes, that's generally the way you do it. I didn't think anyone "pre-funded" their paypal acccounts for purchases. In general only sellers have the issue of PayPal holding their money for a period that you can't do anything about. Buyers just have the funds taken from their cc's or from a bank account, there is absolutely no reason to have them hold your money for you. So we agree