Slightly OT - Paypal Migrating to Retail Stores

gemint

Sorry for another eBay/Paypal thread. I saw a news story yesterday where PP is beta testing checkout payment capability at Home Depot stores. That got me to thinking more about their fee structure. As an example, I recently sold $275 worth of cards through a direct solicitation (not through eBay). Paypal charged me over $11 for the transaction fee. If your bank charged you $11 to withdrawal $275 from an ATM, we'd have riots in the street. How does PP get away with such outrageous fees for executing a simple cash transfer transaction? I didn't hear in the story if they will charge similar fees at retail stores. If they do, I see the idea falling flat on its face. Why would someone pay a 4% transaction fee when you can get cash back by paying with a credit card or pay no fee by using your atm card?

mlbfan2

The store would have to pay the fee, no?

jwgators

The purchaser does not pay the fee, the seller does. So Home Depot will explicitly be paying Paypal the fees, not the consumer. (Although the fee will get passed to the consumer regardless through the pricing.)

Whoever bought the cards off of you for $275 did not pay a transaction fee, only you as the seller pay the transaction fees. You need to consider those transaction fees in your pricing if you are using Paypal. You are paying for the ability to accept credit cards and electronic transfers, as well as the instant payment. If you don't want to pay for that convenience, wait for the buyer of your cards to send a check or money order.

vladguerrero

Has Paypal not skirted bank legislation for years and lived by their own rules? How can they defend that now?

yankeeno7

I have never understood why PP wants to play bank but when they hold on to your money, you dont get the interest because you know Paypal is making interest on it.

SidePocket

I'm not sure why anyone would want to use Paypal at any store rather than a debit or credit card.

Coucher73

You do realize that merchants pay fees to transaction processors, don't you? When you swipe your credit card for a transaction for $100, the merchant isn't getting $100. They are paying a percent of the sale to processor and to the issuer of the card.

Paypal is the same concept. They can move to retail stores if they can get the processing equipment into place and have a pricing structure that makes sense to merchants.

gemint

That's a good point several have made. I guess I wasn't awake this morning and was viewing it from the customer having to pay the fees. It's true that the merchant would be paying that fee.

Dboneesq

<< <i>As an example, I recently sold $275 worth of cards through a direct solicitation (not through eBay). Paypal charged me over $11 for the transaction fee. >>


Wondering why they charged you so much? If you were paid over the Net, the fee to you should have been 2.9% + .30, which would be $8.28. I am assuming this was one transaction. If it were several payments, then the 30 cents gets added to each transaction.

All credit card companies charge the merchant when they accept a credit card. I think the rate can go from ~1.5% up to about ~6%.

Dpeck100

Using credit cards such as American Express and Discover generally charge the merchant in the 3% plus range and why some stores only accept Visa and Mastercard. Also keep in mind they pay a fee to First Data or another company that provides them the software to process the payments.

In the world we live in today of electronic payments fees exist and always will.