PayPal make changes to the UK user agreement

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Personal payments now could be free

PayPal are changing the fee structure for UK users to make accounts more attractive for non-commercial users. They are making a new distinction between types of payment:

  • commercial payments, including all eBay item payments, and
  • personal payments, “a payment made for the purpose of either your personal, family and/or household affairs.”

And the fees have changed like this:

  • Personal payments funded by bank account (echeque) or PayPal balance will be fee-free, regardless of account type
  • Personal account holders will be able to receive credit- or debit-card funded commercial payments, at a fee of 3.4% + 20p per transaction for domestic and Euro payments from within the EU, or 3.9% + 20p for other cross-border transactions.
  • Senders of personal payments will have the option of paying the fees themselves.
  • Personal account holders will no longer be required to upgrade to a Premier or Business account once they have received £250 in payments.

From this, I can see PayPal’s use in the personal payments area expanding massively. Even the hiked 3.9% fee will compare favourably to international bank transfer fees for smaller amounts: wait til my brother in Canada hears about this 😆

PayPal must be offered by UK eBay sellers

In parallel with eBay’s new policy announced earlier this week, eBay sellers must accept PayPal from all funding sources “including but not limited to eCheque and credit cards”. In other words, don’t even think about trying to make all your eBay payments come through as personal, balance-funded payments!

If a seller lists postage to a country and PayPal permits transactions from that country, then the seller must accept cross-border payments from that country.

And a seller must “accept PayPal if the eBay listing includes PayPal as a payment method:” you may not list with PayPal because eBay say you have to, and then refuse to accept the PayPal payment.

Buyer Protection Program

This has been amended to exclude airline tickets, eBay classified advertisements and customised or made to order items. Can we assume that some people have been using PayPal chargebacks for fee-free plane ticket cancellations? 😯

14 Responses

  1. The exclusion of buyer protection on Airline tickets has been there for a while. I found it when I was researching digital downloads and commented on it on your ‘Spanair sell off flights on eBay’ post back in february

  2. No, it won’t make much difference in some sectors but it’s a briefly attractive piece of window dressing!

  3. Little discussed here is that PayPal no longer allows eBay sellers to block eCheques.

    They used to allow blocking unoficially (there was a tickbox in the payment receiving preferences that if checked, prevented echeques from going through on eBay transactions). This was changed on 4th June with nary a word said. The text by the checkbox has changed and makes it clear that eCheques cannot be blocked for eBay transactions.

    This move is really sneaky, and creates a bad experience for both buyers and sellers. There has been little publicity and effectively they have slipped this one in under the radar.

    Buyers dont realise they are paying with an echeque, most dont bother to read dialog boxes and just click through. Then they expect us to post their goods. We dont post goods until we have received CLEARED payment. eCheques can take 9 days to clear, so the buyer has to wait until this has happened, then wait for the Royal Mail to do its bit. Therefore an impulse buy on eBay can take over 2 weeks for the customer to get their stuff. Added to this, eCheques can only be cancelled by the seller, not the buyer, so they cannot change their mind after they have realised what has happened, and have to sit stewing and wait for their order. If they had known how long it takes, they probably wouldn’t have paid using this method in the first place.

    Sellers dont like it because we have to manage buyer expectations and educate them about eCheques. Then we get hit on DSR 3 due to customers thinking that we are slow to dispatch their goods! This is a complete MESS!

    Thanks eBay and PayPal for creating a poor buyer experience just to scrape up a few pennies of lost transaction fees due to this useful block being in place…

  4. “AMUKPS” – echeque blocking was never supposed to work for eBay; it was always supposed to only work for website payments. There used to be an extremely badly written clause that stated this. Then – unannounced – it did start working intermittently for eBay payments too. I’m reliably informed this was a glitch; certainly it often gave buyers an incorrect message that the seller had blocked their payment.

    I don’t think allowing eBay sellers to block echeques is the answer. Buyers don’t know or understand the difference between funding a payment with a bank account and with a credit card, and why should they: as far as they’re concerned, either way, they’ve paid. The answer is to make echeques work efficiently; currently, going through the direct debit system, they are very cheap for PayPal but frankly crap for sellers. A better way to transfer buyers’ cash needs to be found.

  5. I noticed that Paypal seem to be pushing the “see how easy it is to pay from your bank account” option lately – which may account for the increase in echeques that I have seen. And I had an echeque “fail” yesterday – I only knew that because the buyer sent me a new payment with the message sayng “sorry was a problem with my pay pal had to resend payment”. When I checked my Paypal account the payment was showing as “cancelled” and yet I got no email at all from Paypal apart from the email notifying me of the second payment. Safe payment method? As we know, it’s not safe fro sellers.

  6. Kate, I’ve had exactly that happen two or three times over the last couple of months. I have been told quite categorically by PayPal that there is no possible way that they haven’t notified me, and the problem must be that I don’t, won’t or can’t read their email. So, what do we know 🙄

  7. I’m still not getting half of my Paypal emails coming through. They all show up in SMP though, and I double check my Paypal account too. But it is all more admin that shouldn;t be necessary.

    Fortunately, no problems with my eCheques recently, so I don’t know if they would have told me or not… 🙁

  8. I want to sell a high ticket item and PayPal offers ZERO protection for the buyer. I want to use escrow but I’m now forced to let the buyer pay through PayPal, lose a huge chunk of the money AND lose all the safety offered by escrow. This decision stinks. I hope the Monopolies & Mergers people are looking closely…

  9. Sue, you are correct except I can state categorically that the eCheque block worked perfectly until early June. We had no echeque payments go through until that time, now all go through. There was a very badly worded error message though, stating to the effect that the seller had refused payment etc, which did create a lot of confusion.

    The fact is that eCheques as they stand are a rotten method of payment. Rotten for buyers due to the delay and rotten for sellers due to being blamed for slow shipping. We’d much rather not accept them.

    Buyers as a rule don’t know what an eCheque is nor do they understand the consequences of paying with them. We don’t see why we as sellers should have to do PayPal’s dirty work for them.

    What they have done is manifestly unfair. The fact that they changed the message by the tickbox is clear evidence that a change was made and they knew exactly what they were doing i.e. taking away the eBay eCheque block.

  10. Buyers as a rule don’t know what an eCheque is nor do they understand the consequences of paying with them. We don’t see why we as sellers should have to do PayPal’s dirty work for them.

    I COMPLETELY agree with you there! PayPal are currently in fact pushing buyers towards echeques: if you try and pay by a credit or debit card, you get a message asking if you’d prefer to pay by bank transfer. I forget how they pitch the advantage of this to buyers, though there is an obvious monetary advantage to PayPal themselves. If they can’t communicate the deal correctly to buyers, they should ditch echeques altogether.

  11. I’d gone about 9 months without seeing an e-cheque as they were “blocked” in my Payment Receiving Preferences, but since June 4th, I’ve had 6 of the damn things, including one which has not cleared from June 4th, and another that has been cancelled – but the buyer is no longer registered anyway, with 3 still waiting to clear.

    They’re great for cashflow, and must be a huge improvement to the buying experience. 🙄

  12. Steve you are correct, the change kicked in on 4th June.

    PayPal’s entire revenue model is based on steering payers towards paypal balance funded or bank funded transfers. They make NO money if you fund with a credit card. Scot Wingo wrote a great piece on this recently. Hence the way that buyers are influenced by the design of the site not to use cards to fund payments. Sneaky, really sneaky!

  13. The snappily entitled “No splitting” clause that requires all PayPal payments to be accepted for eBay transactions is still in the User Agreement.

    As for PayPal’s business model, there is a section in the eBay Annual Report about a change in the mix of funding sources for PayPal payments being a risk to eBay Inc’s profitability.

    The same section of the eBay Annual Report contains the statement (in the context of two class actions brought against PayPal, one by a group of US State Attorneys General) that changes in disclosure requirements about funding sources could also have an adverse effect on eBay Inc’s profitability – which is tantamount to a breathtaking admission that telling the truth would be bad for business!


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