August 19th, 2009
Why PayPal lost this customer over credit card fees policy
I have this event coming up and will be be the funds-collector from people scattered across different locations. Initially, I thought of PayPal as the easy way to go.
Boy, was I wrong.
Today, thanks to a very poor experience with the company’s Web site and a couple of clueless telephone customer service reps, I’ve decided against PayPal - all because I think the company’s policies involving credit/debit card fees are misplaced and unfair. Instead, I’ll probably just make everyone send me a paper check via snail mail. .
One of the biggest problems is that PayPal naturally assumes that everyone collecting money is a “seller” of some sort of product or service. What’s wrong with just being a recipient, a collector or funds, if you will? What about people who collect for family reunions or special events, such as what I’m doing? Hey, I’m just being a nice guy by agreeing to collect the funds for the group. Why should I have to eat a few bucks from every transaction just so the sender can use a credit/debit card to pay? That’s a convenience - and the sender should cough up for it.
Actually, under PayPal’s policies, the sender has the option of eating the fees - roughly 3 percent of the transaction plus 30 cents - or passing them along to the recipient. I don’t object to credit card fees. I just don’t think that - in this particular situation - I shouldn’t have to be the one who takes the loss. I should be given the option of refusing such transactions - but I don’t. Here’s how it should go:
The sender launches a credit card payment and is informed of the fees. The sender decides to pass along the fees to the recipient but, instead of getting a payment confirmation, the sender gets an error message informing him that this recipient does not accept credit/debit card payments unless the seller pays the associated fees. At that point, the seller has a choice - eat the fees or cancel the transaction. Simple as that.
But that’s not how it works. And that’s why I won’t be allowing anyone to pay their share of this event via PayPal.
Here’s the sad reality: PayPal - and the execs at parent company eBay - could probably give a rat’s behind what I think of their credit card policies. I’m not a frequent buyer or seller on eBay and don’t regularly use the service. And I’m just one guy. Seeing how I don’t like how PayPal works, I can just haul my behind to the bank with a stack of checks and do things the old-fashioned way.
PayPal is one of eBay’s sweet spots. In its last quarterly earnings report, the company said that the payments business unit, which consists of PayPal and Bill Me Later, saw year-over-year revenue growth of 11 percent for the quarter and a 20 percent jump in active registered accounts, now up to 75.4 million. It aspires to double in size by 2011 - largely by continuing its growth on the eBay site as well as by increasing the service’s use among merchants that aren’t part of eBay. In addition, PayPal is looking toward handling more mobile transactions and payments for businesses such as banks, non-profits and online social networks.
So guys like me really aren’t on the radar. At least now I know where I stand with PayPal.
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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| 08/19/09
