PayPal have been rolling out Faster Payments to their users and it appears that they’re available to most users now, as promised. However I’ve had two people email me over the weekend with muted delight at the Faster Payments. Far from accessing your cash within minutes PayPal appear to have implemented security checks for a large number of people meaning it’s still a day before they get their funds in their bank account.
The message users receive is “For security reasons, we’ve had to delay your withdrawal request while we review it. Your withdrawal request will be under review for up to 21 hours. After our review is complete, PayPal will release your funds. It can take an additional 2 hours for those funds to be deposited into your bank account“.
We’ve seen this before, however as David Brackin of Stuff U Sell (a long established eBay seller with a turnover of a million pounds a year) said “we’ve moved to 24hr transfers with this “security” review, which is a step in the right direction but isn’t the 2hrs expected”.
Faster Payments is intended in most cases to be instant, it’s accepted that at times it may take up to two hours, but with PayPal tacking on a 21 hour review, it’s hardly the “instant” that PayPal customers were expecting.
Another user Jan tells me “I searched this on Google and found that many other Paypal users are also,for the first time ever experiencing these so called “security” checks and all say the same that it has only started to happen since Paypal supposedly implemented the faster withdrawal system and dropped the £5 charge”.
David calculated the amount of cash PayPal are losing out of their “float” caused by reducing the transfer time from three days to one day. “Paypal processes over $80bn a year — which is £200m a working day. The UK is only a portion of that, but three days worth is a lot of cash to find if everyone withdraws their balance daily. By implementing a “security step” taking just less than 24hrs they save themselves £200m“.
Whilst we have no reason to believe PayPal is short of the odd £200m needed to pay out instantly rather than 24 hours it’s reasonable for users to ponder why they’re holding onto their cash for longer. Don’t forget these aren’t one off large transactions, these are long established businesses with regular cash flowing through their PayPal accounts.
No holds for spending money, only withdrawing
Faster Payments should be, well faster! They shouldn’t be subject to 21 hour holds in the name of security or what was the point of implementing them in the first place? It’s worth pointing out that the same 21 hour security holds do not apply if you try to spend your money by paying another merchant with your PayPal balance, it’s only if you want it in your bank account it gets held.
Come on PayPal, play the game. Give us our money when we want it, not anything up to 23 hours after we ask for it.