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Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue June 13 2017 23:53:01

Clarifying a Key Change in PayPal User Agreement

By: Ina Steiner
Sponsored Link
PayPal is making some changes to its User Agreement that will be effective for all PayPal users on July 27, 2017. One item that may be of concern to users: 

"We're updating the "Payment Methods Used" section to clarify that, for pre-approved payments, if you have money in your PayPal balance, your PayPal balance will be used first and your preferred payment method will be used for any remaining amount due."

We asked PayPal, "If I pay for an item on eBay or a retail website, will PayPal now automatically use my PayPal balance first? What is (and is not) a pre-approved payment?"

In response to our inquiry, a PayPal spokesperson explained: 

"To clarify, for "pre-approved payments" which are billing agreements, PayPal will use balance first.  Pre-approved payments are when a customer stores PayPal as a payment method at a merchant's site (i.e. to pay for your Netflix subscription). 

"For all other typical purchase transactions, such as eBay, we will not use balance first if you have a preferred payment method.  Even if you do not have a preferred payment method, we will still show you all of your payment methods and you get to choose.  We do not automatically use balance first."

Recurring billing - such as subscriptions - can sometimes give rise to surprise (and unwelcome) charges. Someone posted a guide on LinkedIn on how to check with which companies you've entered into pre-approved payments using PayPal.

There are 3 other changes to PayPal's new User Agreement as well. You can see a summary of the changes to the PayPal User Agreement here, and copied below:

1) We are adding terms for a new faster withdrawal option.  If your debit card is eligible to receive faster withdrawals from your PayPal account, you will be provided the option to use it when you transfer money out of your PayPal balance.  The transfer will be subject to a $0.25 fee, which will be deducted from the amount of the withdrawal.

2) We are advising sellers that that they may receive payments through their PayPal Account from customers that use their Venmo accounts.  The transactions will be subject to Venmo's purchase protection program (which is similar to PayPal's purchase protection program).

3) We are updating the "Payment Methods Used" section to clarify that, for pre-approved payments, if you have money in your PayPal balance, your PayPal balance will be used first and your preferred payment method will be used for any remaining amount due.

4) We are clarifying our rights that apply when your PayPal account has a negative balance.  If you continue using your PayPal account when it has a negative balance, you authorize PayPal to combine the negative balance with any debit or transaction sent from your account when that combination is disclosed to you in advance of initiating the debit or transaction.

PayPal encourages users to review the Policy Update and familiarize yourself with the changes that are being made. "If you do not agree to the amendments, you may close your account before July 27, 2017," it states.



Comments (21) | Leave Comment | Permalink
Readers Comments

Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: Marie
       
Wed Jun 14 02:41:55 2017
I'm not sure than any of this is really surprising.  For me, if I'm purchasing something using my PP account, it has always come from any balance I've had in PP first.  Has it been different for others?
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: DingDong This user has validated their user name.
       
Wed Jun 14 07:10:31 2017
Personally, I rather use my Paypal account first but there are times I rather have the full purchase of big ticket item showing as one payment and not $5.20 Paypal and 102.33 from charging.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: Rexford
       
Wed Jun 14 07:18:32 2017
For many reasons, but mostly for security reasons, I empty my PayPal almost daily.  If at all possible I try to make sure that the balance is zero.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: toolguy
       
Wed Jun 14 07:35:27 2017
Paypal is our GO TO MONEY source

We keep our money in our account and use our debit/credit card when needed.

In fact I doubt I spend more then $10 a week in cash.

Only once has Paypal let me down and it was for $64 back in 2002
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: mcposty This user has validated their user name.
       
Wed Jun 14 08:59:03 2017
I'm other words..if you don't want to use your PayPal balance don't use PayPal at all for these transactions actually don't use PayPal at all for anything as they are criminals
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: exdwh This user has validated their user name.
       
Wed Jun 14 14:22:36 2017
@Marie,

Yes, it's different now. Beginning sometime in mid-April, you can now specify a preferred funding method. I think this is great. I always want to use a credit card for the full amount without having to first empty my PayPal account.

#4 was added because even though it's ''the way it's always been'', it's not how it should work now.

--David
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: The End
       
Wed Jun 14 16:45:35 2017
I have a Dusty OL' PayPal account I haven't used in 12 years. So, when I used to buy stuff on Ebay, I would use a credit card and Not store the information there.
According to Ebay Corporate's latest round of UNimprovement, I won't be going back for many many more years.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: dans parts This user has validated their user name.
       
Wed Jun 14 17:05:50 2017
As to #3 above, I had a problem with that already.

I needed to update an old token used by my insurer, as the old one apparently expired.  When I signed in to the PP pop-up window to renew, I only saw 4 choices: my 2 bank accounts tied to the PP account, Add credit card, or apply for PP Credit.

Since I didn't want $$$ pulled out of my bank accounts for insurance for shipping things, I called PP.

And this is where the rub comes in.  I guess no one told their CS reps (and I even managed to get 2 notches up in the chain on my phone call) that the terminology had changed, and that even though it only shows those 4 choices, the PP balance would still be used.  They assured me that what I saw was it.  If I saw only the bank accounts, that's where it would be filched from.

I tried entering my PP Debit card for a credit card, and it did nothing.  The screen didn't even flinch, let alone accept it and go to the next screen.  Click and it was like nothing was entered.

After going round with insurance co and PP, I finally gave in (when I had 37 packages to insure to get to PO), and clicked to leave it say my primary bank account.  Only AFTER clicking past that first screen, did I see that the amount WOULD come out of PP balance.  And it did.

But WHY IN THE WORLD do they not want to tell you that now?  Instead, they let you think they're going to raid your bank account first.

What a couple of screwed-up companies we have the dubious "pleasure" of serving as slaves...
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: Redlion This user has validated their user name.
       
Thu Jun 15 00:35:24 2017
My payments have always automatically come out of my back-up before touching my Paypal balance, but then I fund with a Paypal (synchronicity) Mastercard.  I do not want my payments coming out of my Paypal balance as I do earn points with a cash value with each purchase.  Looks like I will be clearing my Paypal account out several times a day... I'll see how that works and if it doesn't work out well, I will just remove any auto payments from Paypal altogether.  Looks like I will also have to do a manual payment to pay my eBay fees instead of letting them do that.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: rachel This user has validated their user name.
       
Thu Jun 15 01:49:07 2017
I don't leave cash in my PayPal unless I have a return, I have recurring subscriptions in personal and business accounts so now I will transfer funds faster than before. They don't want to incur fees of some sort must be the reason. Or maybe it's for reporting purposes to show that they have more liquidity or cash on hand? There must be a reason that you help them get more bang that way. My bank does not charge any fees for transferring money to PayPal because they want it too.. Could it be that interest rates just went up ? When you are talking about billions this could make a difference to their bottom line. Hopefully they will disclose It or someone will explain it Maybe ask Quora!  
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: rachel This user has validated their user name.
       
Thu Jun 15 01:50:32 2017
Correction: My bank does not charge fees for transferring funds to the bank ( or the other way).  
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: Marie
       
Thu Jun 15 03:20:45 2017
@exdwh

That choice in on Ebay, but to my knowledge PP doesn't offer that choice.  Granted Ebay processes that CC payment through PP, but you do NOT see that transaction on your PP account as you would if you did the transaction in PP.

For me, as long as there was a balance in my PP account, it pulled from that first.  

@dans parts

I understand why you don't like #3, but it has always been what PP has done.  It isn't new.

Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: Windkissed This user has validated their user name.
       Web Site
Thu Jun 15 07:14:59 2017
I think paypal is a little brazen.  They tried to access my bank accounts when I had plenty of money in my paypal account.  Then I bought something from a Facebook Club and they picked up an old address from something I bought years ago and shipped it to a store in the town I live in.  They don't know what they are doing.  They were much better when they were associated with ebay????????????????????
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: GotToGetOut This user has validated their user name.
       
Thu Jun 15 07:15:32 2017
It was always annoying to me that Ebay would handle Paypal that way so when I wanted to make a purchase, I would take all the money out of my Paypal account and pay for the item with a credit card which was then an option.    It was also annoying because in order to change from a Paypal balance, I had to toggle a couple of buttons to get there instead of one place to make the decision of whether I wanted to use a Paypal balance, bank account or credit card.  I don't leave money in that non-interest bearing Paypal account for long, that's for sure.  Don't know why tool guy thinks that's a smart thing to do.  
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: Windkissed This user has validated their user name.
       Web Site
Thu Jun 15 07:17:25 2017
They have just recently started offering a choice as to how you pay with paypal, within the last month.  They have always used PP account balance first.  But when you start accessing my bank accounts, I DRAW THE LINE.  That is none of your business and you have no authority in that area.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: Whatever This user has validated their user name.
       
Thu Jun 15 09:28:24 2017
Sleepy this morning - does that mean if you have designated paying your ebay invoice on your non-paypal credit card they are now going to yank it out of your paypal funds? I pay everything with a non-paypal credit card and simply transfer my paypal money daily into my business account. My accountant instructed me to do that.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: Marie
       
Thu Jun 15 15:29:16 2017
@whatever

In Ebay if you have your preference to pay your Ebay fees as using a particular CC, PP has NO control over that.  I have mine set up this way as well.

And now on Ebay if you are purchasing something you have a choice in how you pay.  You can use PP if you check that box or you can pay with a CC if you check that box.  If you check the CC box, PP can't override your decision, you will be allowed to pay with a CC and you won't see the transaction on your PP info.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: exdwh This user has validated their user name.
       
Fri Jun 16 13:53:28 2017
@Marie,

''That choice in on Ebay, but to my knowledge PP doesn't offer that choice.''


If you have a business PayPal account:

Money > Payment preferences


If you have a personal PayPal account:

Wallet


I first saw the feature on April 18, 2017. I have a confirmation e-mail showing my preference.

--David
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
This user has validated their user name. by: Marie
       
Fri Jun 16 14:07:01 2017
@exdwh

Thank you for the information.  It is very useful and appreciated.
Perminate Link for Clarifying a Key Change in PayPal User Agreement   Clarifying a Key Change in PayPal User Agreement
by: moto-science This user has validated their user name.
       
Fri Jun 16 21:05:52 2017
My new hobby is to make Paypal pay Amex CC fees....forever.
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