Paypal - using a credit card to fund vs. bank account?

Regarding payments.. just ALWAYS use credit card. Its an extra layer of protection for the buyer. And Paypal makes enough money as it is. Whenever you receive payments, transfer it immediately to your bank account. Don't let Paypal make 3% from you.

dorkiedoode wrote in post #7688370
when you pay with your credit/debit paypal take 3% tax. and if you going to pay it straight from your bank you should choose instant transfer that way there's no tax. im not sure how it's set up but i have 2 account one that only except instant transfer for non tax. the other is when someone want to pay by a credit card, therefore im going to get tax for that. So if you going to use your debit you should just use instant transfer cause it basically the same. Otherwise if you don't have money then CC + 3% tax.

I think you are a bit confused here...first it is NOT A TAX it's what called in the industry, a "discount rate". It is a pretty standard fee charged to the RECIPIENT for accepting payment via credit card. The person sending funds never pays a fee with PayPal.

Next, people w/o a premier or business account can no longer receive payments via credit cards. And that makes perfect sense since otherwise it was a CHEAP way for people to get a cash advance on their card and pay nothing for it. Still, you can do it if you simply setup a personal account and a premier account then send yourself an invoice which can be paid via credit card funding. Technically it is a violation of your credit card's TOS but it is not as if PayPal is going to tell them because they get about 3% (3.5% + $0.35 if you do not have a reduced rate PP account). As the "buyer" you save not only the cash advance fee but also the higher interest rate. But as I mentioned this is a violation of the credit card's TOS, though not a crime.

Back on-topic...you seem to have confused the fee structure for PayPal and I just wanted to point out the sender never pays a fee. In fact technically the sellers of gear here are in violation of both the US PayPal AND US credit card company rules (if payment is funded by a credit card) by charging a fee for sending Payment via PayPal. But the way around it is simply to reword the thing to say take a 3% discount for echeck or existing funds payment. So same difference. Not sure of credit card companies still allow that loophole though.

fann wrote in post #7691720
Regarding payments.. just ALWAYS use credit card. Its an extra layer of protection for the buyer. And Paypal makes enough money as it is. Whenever you receive payments, transfer it immediately to your bank account. Don't let Paypal make 3% from you.

Again, more misinformation. To accept money sent via a credit card payment you MUST have premier or business account with PayPal. You never have the option of NOT paying the discount rate fee.

And to further add information. The ~3% fee charged by PP is FAR, FAR less than the cost of an actually Merchant Account to accept credit card payments, for most sellers that is. The reason for this is, while you might pay less on the Discount Rate, there are huge monthly fees associated with the merchant account itself as well as with a physical or virtual terminal lease monthly fee. Combined these costs typically total over $100/mo. before enven a single charge is processed. Plus all merchant account transactions processed over the internet are processed as "card not present" transactions which cost the merchant MORE. It used to be as much as 2% over your current discount rate but may be different than when i last had a merchant account. Add to that a vast majority of PayPal account holders would never qualify for a merchant account anyway. This all actually makes PayPal a bargain.

And for those who whine about PayPal siding with buyers...try having a merchant account...the buyer ALWAYS WINS there. If the seller has violated any of the Merchant Account Terms then the buyer will indeed win a chargeback, this is why PP rarely fights a chargeback.

Many of those complaining about PP fees and policy lack the actual experience in accepting credit card payments so they are talking out of their arse.

Shultz wrote in post #7691513
I pay all the time using my CC via PayPal & they charge me no extra for doing so???

Maybe the fees are different in the USA as apposed to the UK?

As above I always pay via that as it gives so much more protection against fraud/scams & just as important PayPal cos they are as much use as a chocolate fireguard is disputes.

Shelton.

Actually in the UK it is allowed/legal for the merchant to charge the buyer for paying via credit card. And that goes for all merchants be they PayPal account holders or physical brick and mortar stores withmerchant accounts.

PayPal/eBay did make a change in that if a UK based seller is listing on the US eBay site, they cannot charge for accepting PayPal. That is only fair since when US based buyers buy in the UK site we are forced to live by the laws of the UK. Same goes for other country's eBay sites.

EDIT: Actually, I seem to recally this law might have changed in the UK recently, but I am unsure. I might have that sense confused with the eBay/PP change. I would need to actually look it up to be certain. Which, if true, it is good for UK consumers as those folks are taxed & fee'd enough already.

That's why I have 2 account one premier and one basic. If they pay with the instant transfer then they don't have to add the 3%, but if you use cc then the buyer is going to be paying for it. Or is already added in the item Which I usely do cause now adays everyone Go thru CC.

Damn, brecklundin you dont work for paypal do u?

dorkiedoode wrote in post #7692656
Damn, brecklundin you dont work for paypal do u?

hahahaha....no way!! Just a decade of hanging out on the eBay boards. And a few more of having a merchant account, before web payments were mainstream. I don't like some of the risks anymore than anyone else, but they are what they are, and PP is no riskier, these days, than accepting credit cards directly. Once was a time when PP would automagically try and take money out of a linked checking account if there were not funds to cover a chargeback or reversal. They can't do that anymore as they are not a real merchant account. In fact with a real merchant account those companies CAN AND DO go directly to your account to get back a chargeback, fees or a reversal. I actually like that PP automatically deducts the fees from a payment so I don't need to keep track of leaving a balance in my PP account to cover them. One of the few things I like about PP.

But, PP even as it exists today is far better than eBay's original payment service, I forget the name this microsecond, but if you wanna talk awful...that service was dismal!!

dorkiedoode wrote in post #7692636
That's why I have 2 account one premier and one basic. If they pay with the instant transfer then they don't have to add the 3%, but if you use cc then the buyer is going to be paying for it. Or is already added in the item Which I usely do cause now adays everyone Go thru CC.

I tried that for a while...and like you so many people want and only use their CC I just stopped. I mean the 3% is tax deductable anyway so who cares. I have long had a suspicion that it is those who do not declare their eBay income that are the most vocal about the fees.

fann wrote in post #7691700
The reason that some sellers request that you fund payment via bank account and not credit card is because they have a basic Paypal account that can only accept Paypal payments that are paid via bank accounts or paypal funds. They do not incur the 3% Paypal fee if they keep their account as basic. They receive the full amount of your payment with no fees taken out.

If you pay with your credit card through Paypal, the seller cannot accept this payment unless they upgrade their account to accept credit card payments, at which point, *EVERY* payment they receive will incur the 3% paypal fee regardless if it comes from a credit card or a bank account.

When I first started using Paypal back in 1999, I tried to keep my account without upgrading it and forcing people to pay via bank account to avoid the Paypal fees, but eventually it became impossible to force everyone to pay me with their bank account.

Now that Paypal charges fees for me even if the buyer pays via bank account, they are making an extra 3% since the banks don't charge Paypal 3% like credit card companies do.

Back to the original question, fann's response is dead on. I've tried to keep my personal account without upgrading it because I've always been more of a buyer than seller so it didn't effect me. When you sell with a personal account the seller pays 4.9% to PayPal so it's even more.

I recently started selling here and was one of those that posted asking for a bank based PayPal payment on a $200 Canon flash and got very little interest. I had to wait a month to repost and took out the bank based PayPal line and sold it within a couple of hours. Ironically it was to someone with a bank based payment anyway so go figure. I will most likely have to upgrade soon.

brecklundin wrote in post #7692606
Again, more misinformation. To accept money sent via a credit card payment you MUST have premier or business account with PayPal. You never have the option of NOT paying the discount rate fee.

What do you mean misinformation? What I was saying was, that if you are the buyer, you should always pay via credit card for the extra layer of protection.

The other thing I was saying was that once you become a premier or business account as a seller, Paypal deducts the 3% fee from the payments you receive from buyers regardless of whether the buyer is paying via credit card or bank account.

fann wrote in post #7691720
Regarding payments.. just ALWAYS use credit card. Its an extra layer of protection for the buyer. And Paypal makes enough money as it is. Whenever you receive payments, transfer it immediately to your bank account. Don't let Paypal make 3% from you.

read what you wrote. On one hand you tell buyers to always use a credit card and on the other you tell sellers to not let PP make 3% on you. Ummm...either you are confused or are just wrong but you are saying two different thnigs there...hence misinformation. If the buyer wants to pay with a credit card then the seller must have a PP account which allows for this and thus pay 3% (or a bit less or more depending on their sales level) no matter what.

brecklundin wrote in post #7693117
read what you wrote. On one hand you tell buyers to always use a credit card and on the other you tell sellers to not let PP make 3% on you. Ummm...either you are confused or are just wrong but you are saying two different thnigs there...hence misinformation. If the buyer wants to pay with a credit card then the seller must have a PP account which allows for this and thus pay 3% (or a bit less or more depending on their sales level) no matter what.

What I meant was.. if you as a seller, keep funds in your paypal account which you then use to make a purchase, Paypal will charge the seller 3% (assuming the seller is a premier/business account holder) even though you are paying him with funds already in your Paypal account.

If you as a buyer, were to pay a basic Paypal account holder with funds already in your Paypal account, the seller does not get charged 3%.

What I am saying is, since it is likely that the seller you are buying from is a premier/business account holder, they are going to get charged 3% regardless if you pay them via credit card or funds already in your Paypal account. So why not just pay them via credit card so you have that extra layer of protection?

Make sense?

ummmm...ok, but that is not what you wrote. I do see you are trying to rationalize a way that nobody will pay fees for a payment, ever. Not gonna happen because personal accounts have lifetime limits on the amounts received, I think, which is why PP is trying out Student Accounts to help those who need a fast way for moving large amounts of cash to their kids in college for a decade or two...hehehehe...you know the gradual-students.

no i'm not trying to rationalize it.. what i mean is.. since Paypal is taking the 3% cut anyway.. the 3% can either go to paypal (if they are not paying a credit card company for the payment) or it goes to the credit card company in the case when you use a credit card.

But if you do use a credit card, at least you get the added layer of protection by using it in case something happens with your purchase.

fann wrote in post #7693339
no i'm not trying to rationalize it.. what i mean is.. since Paypal is taking the 3% cut anyway.. the 3% can either go to paypal (if they are not paying a credit card company for the payment) or it goes to the credit card company in the case when you use a credit card.

But if you do use a credit card, at least you get the added layer of protection by using it in case something happens with your purchase.

In which case you were off point to begin with. The topic was using a credit card to pay for items via PayPal and not "pay with a credit card OR pay with PayPal". The conversation was in regard to funding a payment with a credit card for PayPal purchases.

I get your point in that you are saying, now, given the option to always use the credit card. It is just the case that that was not the topic. And it wasn't really what you expressed.

Not trying to bust your balls here, but unless a person is concise when writing about such things it can obfuscate the issue as well as create lack of understanding in how a thing works.

BTW, I use my grandfathered, PP credit/debit card whenever I can because I still get the original 1.5% cash back. So that is my primary reason. And as PayPal begins to slowly roll out their Buyer Protection to venues other than eBay sales, there is going to be less incentive to pay using a credit card.

And as an aside, you are aware that PP bought Verisign a few years back? So odds are excellent that even if you use a credit card rather than PP, PayPal is getting paid.

Just wanted to add my .02 cents to this thread.

For buyers

Certain credit card companies charge you a 3% transaction fee for paying via Credit Card through Paypal for foreign based transactions. This happened to me before when I used my Citibank CC to pay HVStar. Later on I used a CC which does not charge a fee for foreign based transactions.

If this was already mentioned then I apogize as I did not notice it. if not, then this is something to consider in the decision.