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In that matter, as with this current one, eBay/PayPal spokespeople said that preventing fraud — not enhancing profits, by accumulating bank interest — was t

In that matter, as with this current one, eBay/PayPal spokespeople said that preventing fraud — not enhancing profits, by accumulating bank interest — was the point of hanging on to the money. Good'ol "plausible deniability".

eli 14y ago
I mean, I guess it can be both, but I would imagine fraud has a much larger potential impact on PayPal's business than the very meager bank interest gained for delaying payments. I believe that PayPal views fraud as the number one threat to their business, and they are willing to piss people off and lose customers in order to keep fraud losses to a minimum.
- chives 14y ago
  potential fraud (without giving any reason to suspect the transaction) some how has a greater net effect of holding on to something like 1000's of transactions worth of money for 21 days. I call bullshit. "randomly" (as there is no evidence as of yet that suggests they target them for any other reason) picking transactions to hold as some way to prevent (???, nah, no sense made there either) the potential threat of fraud is retarded. Is fraud prevented? maybe. Is commerce prevented? definitely. Does Paypal make money off of this policy? Yes, and a great deal of it at that. Ultimately it just goes back to the age old internet saying of "Fuck paypal, everyone else, their mother, and that shady guy over there are all more transparent with transactions then the aforementioned crooked lot"
  - elemeno 14y ago
    You do realize that with current US interest rates the interest on a 21 day hold would amount to even less than $150[1] per $1mil held - and thats assuming that they could even get Fed Reserve lending rates, which you're not going to be getting from your bank no matter how much money you have with them [2]. Given that that amounts to less than $2600/yr - with that massive assumption that PayPal can even get that rate of interest, do you think that they're really doing it for what amounts to a rounding error for a company that size, or is it, maybe, just about possible that their operational risk might run close to that number as well? [1] $1mil * 1.0025^(21/360) = 145.6 - assuming A/360, $143.6 with A/365 [2] Current US interest rate is 0.25% - but that's the rate at which banks can borrow from the Fed, not the rate that you'll get from your bank.
    - DenisM 14y ago
      PayPal "verified" accounts draw money from users bank account, which allows them to skip the credit card processing fees. That's a huge amount of money, and that's why they keep pushing users to "verify" their account through every way possible.
- fierarul 14y ago
  I assume PayPal is able to do things that are much more interesting than just letting money in a bank deposit. They surely gain a lot just by knowing they can control the cashflow this way.
deleted 14y ago
[deleted]
- joenathan 14y ago
  That quote is referring to the 21+ day holds that paypal puts many eBay sellers through. I know this very well personally having sold a number of items on eBay, where paypal randomly decides that this auction but not that auction will have its payment held for 21 days or 3-4 days after I have confirmed delivery of the item for sale. Where sometimes they don't even release enough money for you to buy shipping for the item.

eli 14y ago

I mean, I guess it can be both, but I would imagine fraud has a much larger potential impact on PayPal's business than the very meager bank interest gained for delaying payments. I believe that PayPal views fraud as the number one threat to their business, and they are willing to piss people off and lose customers in order to keep fraud losses to a minimum.

chives 14y ago
potential fraud (without giving any reason to suspect the transaction) some how has a greater net effect of holding on to something like 1000's of transactions worth of money for 21 days. I call bullshit. "randomly" (as there is no evidence as of yet that suggests they target them for any other reason) picking transactions to hold as some way to prevent (???, nah, no sense made there either) the potential threat of fraud is retarded. Is fraud prevented? maybe. Is commerce prevented? definitely. Does Paypal make money off of this policy? Yes, and a great deal of it at that. Ultimately it just goes back to the age old internet saying of "Fuck paypal, everyone else, their mother, and that shady guy over there are all more transparent with transactions then the aforementioned crooked lot"
- elemeno 14y ago
  You do realize that with current US interest rates the interest on a 21 day hold would amount to even less than $150[1] per $1mil held - and thats assuming that they could even get Fed Reserve lending rates, which you're not going to be getting from your bank no matter how much money you have with them [2]. Given that that amounts to less than $2600/yr - with that massive assumption that PayPal can even get that rate of interest, do you think that they're really doing it for what amounts to a rounding error for a company that size, or is it, maybe, just about possible that their operational risk might run close to that number as well? [1] $1mil * 1.0025^(21/360) = 145.6 - assuming A/360, $143.6 with A/365 [2] Current US interest rate is 0.25% - but that's the rate at which banks can borrow from the Fed, not the rate that you'll get from your bank.
  - DenisM 14y ago
    PayPal "verified" accounts draw money from users bank account, which allows them to skip the credit card processing fees. That's a huge amount of money, and that's why they keep pushing users to "verify" their account through every way possible.
fierarul 14y ago
I assume PayPal is able to do things that are much more interesting than just letting money in a bank deposit. They surely gain a lot just by knowing they can control the cashflow this way.

deleted 14y ago

[deleted]

joenathan 14y ago
That quote is referring to the 21+ day holds that paypal puts many eBay sellers through. I know this very well personally having sold a number of items on eBay, where paypal randomly decides that this auction but not that auction will have its payment held for 21 days or 3-4 days after I have confirmed delivery of the item for sale. Where sometimes they don't even release enough money for you to buy shipping for the item.