Full FeedPaypal adds new fees with no notice
Last month Paypal quietly began charging new fees to its customers who have personal accounts without actually notifying them of the change. The new fees apply to payments marked as “Goods” or “Services.” Such payments were previously free but will now be charged a fee of about 2.9% plus 30 cents. When confronted, Paypal claimed the new fees had been announced in email, news articles, and Paypal’s own blog. However that turned out to be untrue. The only thing mentioned in those announcements was Paypal’s decision to allow its customers with premium accounts to make personal transfers for free.
“We didn’t want to make a huge formal communication out of this pricing change, because we weren’t really adding any fees, and we were hoping it would be a more useful experience for people,” Charlotte Hill, PayPal’s PR manager said.
That is beyond inexcusable. When Paypal, or any company, makes a decision that is going to cost its customers money, the first thing they need to do is communicate this to those customers. I’m not sure how Paypal thinks taking more money from its customers equates to a more useful experience either. I get payments via Paypal from my clients every month and Paypal always takes a chunk for themselves. I think they need to be charging people who send money via Paypal, not those who receive it. Paypal gets a good $50 or so a month in fees from me each month, fees that come from money I’ve earned.
Read [PCWorld]
Keep up with the latest gadget goodness! - 
Subscribe to our feed
Macworld 2010
"Apple may not be at Macworld 2010, but Appletell is, bringing you news, photos and videos directly from the show floor and special events. Join us February 10-14 to see what new products 2010 has in store for Macintosh, iPhone, iPod and iPad (yes, iPad) owners."
Palm Pre Information & Updates
Palm just introduced their next-gen smartphone, the Palm Pre, and next-gen operating system, Palm webOS. Gadgetell's got the latest Pre and webOS information and news for you right here.
That’s ridiculous. I shouldn’t be charged to make a payment. Where I live, the sales tax is already 10%; now add 2.9% more, plus a .30 fee and the price of something is an additional 15%.
I’m sure Google Checkout is happy they’re doing this, which is the only payment service I’ll be using now. I have to disagree with you’re remark that the payor should be charged a fee, and not the receiver of the funds. As the merchant, you should eat the cost of having a 3rd party handle the receipt of your funds; as someone paying the funds, well, that shouldn’t be a charge I incur.
on August 8, 2009 at 11:26 AM - LINKI didn’t receive any notice of any change of terms from PayPal; not happy.
on August 8, 2009 at 01:13 PM - LINK@Benji
>That’s ridiculous. I shouldn’t be charged to make a payment.
I’m pretty sure Paypal doesn’t charge anything for the person making the payment. It charges a fee from the person who RECEIVES the payment. This is a normal practice in credit cards which paypal is almost like a Internet version. I see this practice as being fair but they should be more forthcoming before the change was made.
on August 8, 2009 at 01:50 PM - LINKThis is crazy..I will cancel my small account and not use them anymore..
on August 8, 2009 at 08:35 PM - LINKI use Google Pay anyway…NO Fees
It sounds like what you’re mad about is teh fact that it’s you,and not your customers,that’s getting charged here.
I hope I never do business with you.
on August 9, 2009 at 01:39 AM - LINKFred, your rudeness is not appreciated nor necessary. I have no customers, I have no idea where you got that from. I am a freelance writer. The people I write for pay me via Paypal. I am not a merchant or a retailer.
on August 9, 2009 at 02:42 AM - LINKOh and by the way, I’m not mad at anything. I was reporting a story. However I do indeed think it is wrong for a company to start charging its customers for something that was formerly free and not tell them ahead of time. That is poor customer service.
on August 9, 2009 at 02:45 AM - LINKSue, when ever you buy gas, groceries, books, paper, etc, they are already priced as if a user is going to pay with a credit card. Big merchants like wal-mart negotiate with Visa/MC/Amex to minimize their exposure. So, if I buy groceries with cash, the merchants make a bit more money from me. If I use my AMEX, they break even and I get a few percent in rebate for using the card. So, rather than directly charging the paypal fees to the customer, price your product in such a way that the fee is built into the price. Assume that everyone is going to use a credit card.
on August 9, 2009 at 07:55 AM - LINKScary, once agian the general public gets SHAFTED. Enough is enough.
RT
on August 9, 2009 at 07:59 AM - LINKhttp://www.anon-web-tools.net.tc
Ebay gets a cut, then paypal.
Basically they get to double dip.
I think this deserves the attention of the government.
on August 9, 2009 at 08:24 AM - LINKgood to see Paypal hasn’t changed its work ethic.
on August 9, 2009 at 08:28 AM - LINKI don’t think Fred was being rude. He said exactly what I was thinking. Besides, if customers were charged for using Pay Pal, they would either never use it or the vendor would have to have some sort of complicated pricing system ($x for paypal, $x for google checkout, etc…).
I personally think it was rude to flame him for not knowing the intimate details of what you do. Most people use Pay Pal in a customer/vendor relationship, not for payment for employment. So his reaction was quite normal.
on August 9, 2009 at 08:35 AM - LINKYeah, I just sold something expensive on eBay and got the fee charged (the MAXIMUM fee of 2.9%) and now I can’t afford to ship it. I sent the support line an email telling them that this is unacceptable and demanding they give the fees back.
on August 9, 2009 at 08:51 AM - LINKDon’t like Paypal? DON’T USE PAYPAL. It’s the miracle of the open market - they’re not the only game in town.
It’s not that hard to become a credit card merchant yourself. Or maybe have people send you a check.
on August 9, 2009 at 08:55 AM - LINKHey! Guess what? I CAN’T not use PayPal. They ARE the only “game in town.” They enjoy a virtual monopoly over eBay because they are 1. part of it 2. offer fraud protection 3. advertise all over the site 4. make people think that if they don’t use it they have no recourse (which is somewhat true, which strengthens my point) 6. they make customers dependent on them through the preceding means and 5. they are the easiest method by far to implement for sellers.
on August 9, 2009 at 09:00 AM - LINKIt is indeed poor customer service, and possibly illegal, for Paypal to charge fees without telling anybody. And claiming that they are shafting their customers for the sake of their customers makes things worse.
However, it doesn’t matter whether Paypal charges people who pay, or people who receive funds. Either way, the amount of money received is less than the amount of money sent, and Paypal gets their cut. The important thing is, you need to come to an agreement with your customers, possibly charging them extra to pay you via Paypal.
Sue: “I have no customers ... I am a freelance writer.”
Not only are you being unnecessarily pedantic, but you are using an unusually narrow definition of customer. If you are a freelancer, contractor, or consultant, then your clients are your customers.
on August 9, 2009 at 09:06 AM - LINKI have tried to quit using Pay-pal, but if you sell on E-Bay then thats all they will take, they cut out the other pay options like Money Orders and certified checks. This was just to make them more money. They are a bunch of rip off artist. I have gone to adding a flat 5% to anything I sell if the person pays with Pay-Pal just to cover the cost of the transfer. Then to do a increase and not do say anything about it,” I for one didn’t get any E-Mail from them” That has done it for me with using Pay-Pal. No More will I take a payment through them.
on August 9, 2009 at 09:08 AM - LINKSorry to rain on the parade, but I actually did receive an e-mail from PayPal on this. The e-mail merely stated that they had made a change to their Terms of Service and told you where you could read it. The e-mail itself did not tell you of the change, but I went to the site like it said and clicked on the Terms of Service link at the top after I logged in and the changes were brought to my attention. I’m sorry to those who did not receive the e-mail or notice the link up top, but they did send them out.
on August 9, 2009 at 09:12 AM - LINKRe: the Steves, Jasons and JayDees of the world.
I’m beginning to see online commenting materialize in real live in-person interactions with the townhall eabaggers and their lunacy - people who confuse rude, dismissive comments (that rationalize injustice at about the same time they display loopy paranoia about how dare the government take over the post office) for thoughtful, considerate contributions to a conversation.
Paypal is a very large corporation that has almost cultivated a reputation for conducting itself in the most thoughtless ways and who has long made it difficult to resolve customer problems. Lots of small online sellers rely on Paypal because of the services it provides but the costs, when combined with others, make online commerce unattractive. It has long been a gripe that paypal factored a processing fee for every transaction in a premium account, regardless of the source of the funds sent. And it seems consistent with paypal that they’ve decided to add an additional revenue stream by charging those receiving funds in a personal account.
In a saner world, there would be a consumer protection infrastructure that would make creatures like paypal more transparent and more accessible. It would also protect paypal from consumer abuse. Instead, paypal is seller of a services and at the same prosecutor, judge and jury when problems arise.
on August 9, 2009 at 09:32 AM - LINKSo long as large corporations dominate the market, I think we should dispense references to the free market. Unless we’re discussing the veracity of such things like bigfoot, wmd’s in Iraq, and the tooth fairy.
It’s ridiculous doing that for personal accounts. On a personal account you can’t accept a credit card payment so there is no processing fees involved. The only thing people can send you are paypal account to paypal account transfers which are within Paypal’s own system, that’s 100% profit for them. Nothing but greed and greed is the reason we’re in a recession now with 9% unemployment.
on August 9, 2009 at 09:41 AM - LINKNot surprised a bit, since ebay owns paypal and they are rapidly going down the tube. Ebay has continuously changed the rules of play over the past 3 years until they have pissed off almost everyone selling. The result, millions of sellers to go elsewhere or just stop selling on ebay.
One great greedy ebay idea was to force everyone to use paypal so they could make even more, at the expense of the sellers. After years of abuse and continuous price increases to sellers, many sellers, me included, said enough is enough and have given up on Ebay. So long you greedy incompetents and take paypal down with you!
on August 9, 2009 at 09:49 AM - LINKAre you serious? Paypal has been charging that same fee for years - this is not new! They’ve always taken a cut that is 2.9% plus 30 cents per transaction. The percentage is less if you do $3000 in the prior month. I’ve been using Paypal for years and this is the same fee structure they’ve always had. Unless I’m missing something (and if I am, you wrote a very poor story), then I don’t understand why you are bringing up something that has been in place since at least 2003.
on August 9, 2009 at 09:58 AM - LINKI cannot believe how many commenters here A) miss the facts in the article, B) miss the point of the article, and C) therefore personally attack the author.
I know civil discourse online is forever dying, but at this rate, it may not be worth saving.
on August 9, 2009 at 10:10 AM - LINKLet’s all calm down just a bit and look at the facts and details of this story. This blog post is actually a poorly written rephrasing of much more informative blog post about the matter. The poster did link to the original blog post but, as usual, most people have either missed it or chosen to to read it.
Whether or not Pay Pal effectively informed their customers of this policy change is certainly up for debate but, the policy is NOT the onerous ogre that it is being made out to be.
The new policy is to charge for personal accounts receiving money. Previously only commercial accounts were charged but, now personal accounts are charged for receiving deposits.
Purchases, such as those on eBay, remain free. There is no charge for sending money.
on August 9, 2009 at 10:12 AM - LINKIt is unfair. We should not be treated like this.We will pay attention on it continue.
on August 9, 2009 at 10:15 AM - LINK