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bertrand

Issues with Paypal

25 posts in this topic

I have never liked PayPal, but had been using a lot these days for livestreams. A few weeks ago, it started giving me a warning about the transaction being a cash advance and that my credit card would charge a fee.

I tried it once, and sure enough I got charged $10 which my credit card kindly waived. Now, when the warning comes up, I stop the transaction.

But here is the funny thing: it does not always happen, sometimes, it goes through fine without a fee. It seems to be more an issue with payments to individuals rather than businesses, but it is not consistent.

I tried asking through the PayPal help, huge mistake. I was obviously talking to bots who were not even reading my questions. One even claimed I was trying to fraud the system and threatened to close my account. I see two possibilities:

1. There is a setting I need to change in my account, but the bots did not tell me that.

2. PayPal wants to force me to link my bank account so they can take the money directly. I would rather have my testicles ground in a cuisinart than allow that. One rogue employee could wipe me out.

Any thoughts?

PS: I tried Venmo, same issue. They are owned by PayPal. Also, I asked my credit card, it is not on their end.

Edited by bertrand

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I have never had any issues with paypal in the 15-20 year I have used them.  I do have a bank account linked, but still pay by credit card for all commercial transactions, and have never had the phenomenon you are experiencing.   There is a fee when you pay individuals via friends and family using credit card, but it's a small percentage (I pay via bank account on those transactions, no fees there for either side).  For a commercial transaction, the entity receiving the payment is paying the fee.  There are also extra charges for sending money to other countries.  As far as the transaction being treated as a cash advance, I'd bet that is the credit card company's mistake rather then paypal's, despite the credit card company denying it. 

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42 minutes ago, felser said:

I have never had any issues with paypal in the 15-20 year I have used them.  I do have a bank account linked, but still pay by credit card for all commercial transactions, and have never had the phenomenon you are experiencing.   There is a fee when you pay individuals via friends and family using credit card, but it's a small percentage (I pay via bank account on those transactions, no fees there for either side).  For a commercial transaction, the entity receiving the payment is paying the fee.  There are also extra charges for sending money to other countries.  As far as the transaction being treated as a cash advance, I'd bet that is the credit card company's mistake rather then paypal's, despite the credit card company denying it. 

This is a better explanation than I was ever able to find at Paypal. Thanks. 

Edited by medjuck

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I’ve never had any problems with PayPal in well over 15 years. That said, I’ve never given them my bank account number either (and have no plans to).

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I am not talking about the fees, I am happy to pay those.

I still think it is something in the settings, although I guess I could try a different credit card.

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3 hours ago, felser said:

I have never had any issues with paypal in the 15-20 year I have used them.  I do have a bank account linked, but still pay by credit card for all commercial transactions, and have never had the phenomenon you are experiencing.   There is a fee when you pay individuals via friends and family using credit card, but it's a small percentage (I pay via bank account on those transactions, no fees there for either side).  For a commercial transaction, the entity receiving the payment is paying the fee.  There are also extra charges for sending money to other countries.  As far as the transaction being treated as a cash advance, I'd bet that is the credit card company's mistake rather then paypal's, despite the credit card company denying it. 

Triple checked with a supervisor at my credit card. If paypal tells them it's a 'money transfer' that is when the fee kicks in. So how do I tell paypal it is not a money transfer? Is it in the settings?

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https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html

See article bove.  Bottom line, it's the credit card company choosing the charge the fee.  How do you complete the paypal transaction, do you use "payment for goods or services" or "friends and family"?  The latter, using a credit card, is a money transfer, and the banks then choose if they are charging a fee for that or not.  The "payment for goods and services" should never be treated as a money transfer on a credit card.  AmEx and Discover do not charge the money transfer fee, and cards issued by Chase do not charge the fee.

 

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40 minutes ago, felser said:

https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html

See article bove.  Bottom line, it's the credit card company choosing the charge the fee.  How do you complete the paypal transaction, do you use "payment for goods or services" or "friends and family"?  The latter, using a credit card, is a money transfer, and the banks then choose if they are charging a fee for that or not.  The "payment for goods and services" should never be treated as a money transfer on a credit card.  AmEx and Discover do not charge the money transfer fee, and cards issued by Chase do not charge the fee.

 

Aha, this is making sense, finally.

So, yes, it is my credit card that decides to charge a fee for a money transfer, that part they told me, but it is not their choice to label it as a money transfer.

How do you complete the paypal transaction, do you use "payment for goods or services" or "friends and family"?

It is completely random, and most of the time I do not get to choose. I am 100% sure though that I have done 'friends and family' that were not treated as a money transfer in the past. That is the part that drives me nuts, there is not a clear pattern.

AmEx and Discover do not charge the money transfer fee, and cards issued by Chase do not charge the fee.

So if I switch to my Discover card, there will be no fee regardless of whether it is a 'payment for goods or services' or 'friends and family'? I will try that, but will try to always make it a 'goods and services' also for safety. If it is a 'friends and family', I may get the warning but it sounds like discover will charge no fee. regardless. I will  check with them after the fact, of course.

 

 

 

 

Edited by bertrand

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paypal is not only completely safe, but much better than any other entity I have ever dealt with when it comes to returns and seller misrepresentation. And yes, they have my bank account info, all of my medical records, and a few snapshots of my wife.

I mention all of this because of some of the suggestions here that it is risky to give them access.

Edited by AllenLowe

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I agree with Allen.

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29 minutes ago, Chuck Nessa said:

I agree with Allen.

I agree with Allen & Chuck

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6 hours ago, Rooster_Ties said:

I’ve never had any problems with PayPal in well over 15 years. That said, I’ve never given them my bank account number either (and have no plans to).

Back 15+ years I think I probably had good reason to be wary of giving out bank account access to a (then untested) online entity.

For the last 5-10 years my worries have been more just a matter of being reasonably prudent. After all these years, I’ve never heard any horror stories about PayPal. And if I had a good reason/need to give them access to my bank account info, I’m sure I probably would be pretty ok with it now. Clearly million(s) of other users have (or some huge number, half-a-million at the very least) - with no ill effects.

Never the less, absent a good reason to give out my bank account info to a 3rd party, I just haven’t - and don’t plan to, until I have some compelling need to.

It’s one less password I have to be fanatically concerned about somebody breaking, with adverse results. By only having my credit card attached, their fraud protection and fraud coverage is an extra layer of protection between online criminals and my money.

I also don’t pay for anything with my ATM card either (I never use it like a credit card, or enter my PIN in stores, or at gas station terminals). Can’t say I’ve never done it, but only rarely.

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2 hours ago, bertrand said:

So if I switch to my Discover card, there will be no fee regardless of whether it is a 'payment for goods or services' or 'friends and family'?

That's how I interpret the article, yes.

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It’s one less password I have to be fanatically concerned about somebody breaking, with adverse results. By only having my credit card attached, their fraud protection and fraud coverage is an extra layer of protection between online criminals and my money.

Exactly my reason, more than the trust thing.

So I switched to Discover. I was able to label it as 'paying for a service' rather than 'money to a friend' so that was good. No warning, and I called Discover and it was not treated as a cash advance, so no fee. BUT, Discover does charge a fee for a cash advance. However, they told me that it is a flat 5%, no minimum fee. Citicards charged a fee of $10 minimum, regardless of the transaction. Since many of my transactions are to pay for livestreams, $15 or $20, I am looking at a small fee with Discover of $1 or less. $10 per transaction is insane. I will try to avoid this, but if I pay $1 from time to time, I will live. Paypal sometimes charges me a fee, sometimes not, I don't get that either. I could also be a moocher and watch the livestreams for free, but that ain't happening. These musicians are my friends and they are hurting.

 

Edited by bertrand

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Like many others I have never had a problem with PayPal and I’ve been using them since they first started.

If you use the f & f option to try to pay a non eBay transaction with a cc, yes, you will get hit with a fee, as explained by Felser. 

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52 minutes ago, Brad said:

Like many others I have never had a problem with PayPal and I’ve been using them since they first started.

If you use the f & f option to try to pay a non eBay transaction with a cc, yes, you will get hit with a fee, as explained by Felser. 

If you use the f & f option to try to pay a non eBay transaction with a cc, yes, you will get hit with a fee, as explained by Felser.

it makes sense now, but I had done the f/f several times without a fee, so something changed. As long as it keeps giving me the choice, I am good, but with the other credit card it did not, so that's why I thought I was defaulted to f/f.

There is a musician I will pay later for a gig from a few weeks back. If he tells me he got charged a fee for a non-f/f transaction, then I will just add $1 every time. We shall see.

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For what it’s worth, Discover currently offering 5% cash back on purchases at restaurants and PayPal for those that sign up. Good through September. 

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15 hours ago, bertrand said:

If you use the f & f option to try to pay a non eBay transaction with a cc, yes, you will get hit with a fee, as explained by Felser.

it makes sense now, but I had done the f/f several times without a fee, so something changed. As long as it keeps giving me the choice, I am good, but with the other credit card it did not, so that's why I thought I was defaulted to f/f.

There is a musician I will pay later for a gig from a few weeks back. If he tells me he got charged a fee for a non-f/f transaction, then I will just add $1 every time. We shall see.

I just saw this thread. Exactly the same thing happened to me, Bertrand, so you're NOT alone! I'm pretty sure I also labeled it a Friends and Family because it was for music lessons for a grandson, and she had asked me to do that. I switched to writing her a check! I have used Paypal for a couple of Ebay buys, but they specifically noted it was a credit card transaction without the fees, so I think they know about this. Anyway, thanks for the discussion!

 

 

gregmo

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9 hours ago, gmonahan said:

I just saw this thread. Exactly the same thing happened to me, Bertrand, so you're NOT alone! I'm pretty sure I also labeled it a Friends and Family because it was for music lessons for a grandson, and she had asked me to do that. I switched to writing her a check! I have used Paypal for a couple of Ebay buys, but they specifically noted it was a credit card transaction without the fees, so I think they know about this. Anyway, thanks for the discussion!

 

 

gregmo

Glad to hear I am not the only one!

I am OK with the explanation of service vs. friend, but not OK with the fact that I did not always have a choice to pick one.

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12 hours ago, bertrand said:

Glad to hear I am not the only one!

I am OK with the explanation of service vs. friend, but not OK with the fact that I did not always have a choice to pick one.

Me too.

 

 

 

gregmo

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Any eBay transaction is a commercial one. Buyers do not get charged fees, only sellers. 

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3 hours ago, Brad said:

Any eBay transaction is a commercial one. Buyers do not get charged fees, only sellers. 

The fee I got charged was from my credit card company, not Ebay, Paypal, or the seller.

 

 

 

gregmo

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50 minutes ago, gmonahan said:

The fee I got charged was from my credit card company, not Ebay, Paypal, or the seller.

 

 

 

gregmo

I’ve always had a balance in there from sales so I’ve never had that issue. 

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It all depends on whether or not Paypal presents it to the credit card as a 'money transfer'. You can be mad at the credit card that their policy is to charge a fee for such a transaction, but they do not decide what kind of transaction it is.

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Well so much for no fees on a Discovery card. I just tried to use one and was told there would be a charge.  Maybe it ended with their 5% back on Paypal offer. 

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