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> Their entire business is predicated on steering you away from using your credit or debit card (better for you) to a direct bank withdrawal (better for them).
by dangrossman 13y ago
> Their entire business is predicated on steering you away from using your credit or debit card (better for you) to a direct bank withdrawal (better for them).
You're being hyperbolic, or don't know what predicated means. This defaulting to bank transfers is a relatively recent thing in their history; they've been profitable for more than 10 years without that. Their fees are also sufficient to make a profit on credit card transactions, so their business would not fail should everyone opt-out of paying by ACH.
There are reasons for PayPal to want you to use ACH over a credit card beyond simply increasing profits, too. They're just as much victims of credit card fraud as their merchants. It's the card networks' fault that almost anyone in the world can pick up a Visa/MasterCard card, use it to buy something on eBay, then charge back the payment after they get the item. PayPal's the one getting the chargeback, and they're not exempt from the card networks' requirements on maximum chargeback rates. It's an existential threat to their business, always has been.
- Amadou 13y agoThis defaulting to bank transfers is a relatively recent thing in their history; I've had a paypal account since before Ebay bought them and they've always used sneaky user interface tricks to push customers into using bank transfers over credit cards. It was the first thing I noticed about them after signing up.
- Stratoscope 13y agoThat's right, PayPal has always worked this way. In fact, it's only fairly recently that it let me switch to a credit card without putting up a warning page about all the benefits I'd get by using my checking account instead of a credit card.
- abalone 13y agoI think you're wrong on the facts. PayPal has always steered towards bank withdrawals as long as I can remember. Your note on chargebacks supports my point: Paying by card is better for the consumer. PayPal's trick UI steers them away from that.
- netcan 13y agoTaking your point, I wonder if honestly would be a better policy. Credit Cards essentially cost paypal more. A more honest solution might be pricing in the cost of credit card transactions fees and chargeback/fraud risk to the customer. I have no doubt this would be bad for conversion rates. It introduces huge friction, going from 0 cost to small percentage costs. The way they do it now allows users to segment themselves. If you have a strong preference for using credit cards, it's available. If not, well then paypal does. They choose if you don't. It's like an opt out system. In a lot of cases, thats a good system. For example, I think organ donation should use that system.
- abalone 13y agoThe PayPal equivalent would be if you had to opt-out of organ donation every morning and it never remembered your preference. That is a bad faith system.