3 ms·
Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to
by user5994461 7y ago
Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to continue operating until the next release.
Amazon has two days delivery for most orders. They can quickly get customer feedback (product review, refund, shipping issue). They could even directly question customers "have you received product? Yes/No".
They could easily determine that a vendor is legit if they wanted to, they do not need to hold funds for months.
- mcbits 7y agoWhat PayPal does or did (according to stories I read a while back) was freeze the funds and then simultaneously advertise a loan to the customer. So I guess we could subtract the interest rate charged by other lenders for that kind of loan from the rate that PayPal would charge, to get an estimate of the risk that PayPal believes it is mitigating when freezing people's funds.
- user5994461 7y agoSounds odd for PayPal to do that (might be a US thing?). They're the one owing you money but you're the one who has to pay extra fee? The purpose of delaying was to prevent fraud and this achieves nothing to prevent fraud, the vendor can just take the loan and run away. If PayPal is confident enough to give a loan, they're confident enough to release some of the funds, but they prefer to force a loan on the account holder and get extra fees? I don't expect that going well in many jurisdictions. Consider the massive power imbalance and usually shorter legal timelines to close SME payments, that give more weight to the case.