PayPal Card Reader Allows for In-Person Payment Processing

by: Digmen1

Just waiting for Phil to advise us when he thinks Paypal will finally fall over.
He has been predicting it for years now. And yet they keep expanding and bringing in new services.
It will be interesting to see how PayPal Here goes, but I would have thought that they would have undercut Visa and Mastercard as retailers HATE their fees.

by: Philip Cohen

With the reputation that PayPal has acquired over recent years Square has absolutely nothing to worry about, the clunky PreyPal could not hit the side of an old timber barn, let alone a modern B&M one.

Next time you drop into Home Depot, ask the check-out chick if anyone has yet used (the wholly eBay-funded roll out of) PreyPal to make a POS purchase. PreyPal at B&M POS is little more than an eBay Dept of Spin-created illusion and is undoubtedly a total waste of eBay shareholders’ funds …

The small business POS user of any PayPal device will have most of the same problems that small business already has with PreyPal’s online operation—need any more be said?

If the funds being collected by PayPal are being held by PreyPal subject to PreyPal’s User Agreement then you are dealing with a non-FDIC insured commercial entity (a “merchant of sorts” as PreyPal describes itself when it suits them). It does not matter that PreyPal may itself be holding those funds in a FDIC-insured bank account.

Under such circumstance you have none of the statutory guarantees that would apply to such funds had you collected them via a terminal device supplied by a real FDIC-insured bank, nor can you get any relief, I suspect, from any banking ombudsman, if one exists in the US. PreyPal is not a “bank”, it’s a “merchant of sorts” and they can literally do what they like with any funds that anyone is foolish enough to let them collect or leave “on deposit” with them. Users are simply unsecured creditors—simply waiting to be bilked.

I suspect that  the recent change in bank issuer for the PreyPal Debit MasterCard (from Chase?) to Bancorp Bank (who?) is probably a reflection of the ever-worsening image problems the clunky PreyPal operation has. Any bank that is at all sensitive of its own image would not want anything to do with an operator, such as PreyPal, that has an image problem much worse even than “the banks” themselves could ever have. And the banks’ poor image has got nothing to do with the professional way in which they perform their part of the payments processing system ...

Let’s face it, the PreyPal system cannot survive if it has to rely on sourcing payers’ funds via debits to credit card accounts. Only if they can source funds by “direct debit” (who would be foolish enough to give them that authority?) on users’ bank accounts, or from funds that users’ have left “on deposit” with the faux PreyPal “bank”, can this operation continue to be financially effective.
 
The fact is, PreyPal appears to be offering banking services—without a licence to do so!

Am I otherwise missing something here?

Regardless, PayPal Needs You—Now!

We know how much you love PayPal and so you are invited to cast a vote for PayPal in the first round of “The Consumerist’s” contest for the “Worst Company in America” at:

http://consumerist.com/2012/03/worst-company-in-america-rou
nd-one-paypal-vs-capital-one.html
 
eBay / PayPal / Donahoe: Dead Men Walking

by: Philip Cohen

Ah, Digmen1, you beat me to it. Have you been into Home Depot to punch in all those digits of your phone number and PIN or use your new PayPal Payment card yet? No, well don’t hurry, although there is a prize for the first person to do so, you very likely will still be the first. And please stop telling us how merchants hate Visa/MasterCard fees; PreyPal is NOT cheaper: you've been reading to much of that PR nonsense from the eBay Dept of Spin.
 
eBay / PayPal / Donahoe: Dead Men Walking

by: Ed Gadfly

The bottom of the triangle is against the ON/OFF switch for the iPhone. Where's the ''Payment Solution'' for the Android phones? Since Google Checkout is verbotten on eBay, can we expect Google to embrace PayPal with open app arms?

I enjoyed the spin that points out you can get the PayPal card with it's 1% return and then you will save money on your processing fees. Paypal's not a bank, there is no protection to your money, but hey, only four banks closed last week and eBay/PayPal is always one easy phone call away.

Did PayPal give out readers at SXSW? Did they jump on the momentum of the exciting tech break through they invented?

Hmmm... I found a PayPal blog announcing this. (You can tell it's a blog, because it says ''BLOG'' the total lack of comments had me wondering too.) Anyway check this out:

This is what we will make possible with the new PayPal:

   Separating the purchase from the payment: Buy something in a store, take it home and decide later how you want to pay for it. PayPal is the only wallet that will offer a 5-7 day grace period for consumers to change their minds.
       Switch from one funding source to another
       Decide to pay over time in installments
       Apply different sources of value (gift cards, airline miles, loyalty points, etc.)

https://www.thepaypalblog.com/2012/03/sxsw-paypal-to-give
-attendees-first-look-at-new-digital-wallet/

5 to 7 day grace period for buyers to change their minds. :-)

Imagine the surprise of the shop owners when they discover this!

by: wallflower

Ed, they can change their minds about how to finance the purchase during the grace period, Paypal pays the shop owners at the time of the sale. So Paypal floats the money for the grace period.

by: pace306

Im currently working on a retail enviroment ... but I would NEVER let Paypal get anywhere near my new venture!!

Ive had 10+ years of fighting with them for whats MINE, after those experiences - I want as little to do with them as possible.

Right now I have TD and Chase fighting to be my cc processor! I sleep better at night knowing PP is far away from my money!

The last straw was the ''kobayashi maru'' that paypal but me in visa via a FC mail shipment to Brazil. Yes I sent it insured - but PP didnt know that.

First they try to get you with INR. If you can get past that (FC provides no real tracking info, but I yelled and screamed and fired off 3 nasty emails and got the attention of the higher ups) then they pull a chargeback on you!  That means you get to pay $25 for PP claiming they are fighting for you when they really do nothing (they have no pull with any bank).

In Star Trek - its a no win situation, so Kirk had to change the test. In Paypal land you cant change the test - so whether its INR or chargeback ... if you send out of the country FCM or Priority - your %100 ''holding a live grenade'' as PP will do nothing when your buyer scams you!

by: Anonymous Annie

Philip writes: ''PreyPal is NOT cheaper''

That's absolutely TRUE! I use Elavon for my website (through my Costco membership) and it's definitely cheaper than using PP.

I like spreadsheets. And I've got a quick-n-dirty spreadsheet that lets me do a comparison calculation based on my monthly merchant statements.

I just enter my number of transactions, total dollar amount of transactions... I include my monthly Elavon fee as well in the grand total.

My spreadsheet takes that data and applies the equivalent PP fees to come up with what it would have cost for the same transactions being processed by PP. --- And you know what? It's ALWAYS cheaper than PP!! (ALWAYS! Seriously, ALWAYS!!)

Even including the monthly maintenance fee! Even including the fact that AMEX transactions go through at higher rate!

Now I'm not a big-time seller, but I'm saving $20-$25 per month. But over a year's time... that's a nice chunk-o-change.

PLUS---AS AN ADDED BENEFIT... I don't have to deal with the inherent risk of having to deal with ''holds'' and PP's scammer-friendly refund policies.

I really do have to chuckle (albeit an exasperated one) whenever I see folks posting comments about how PP is ''cheaper''.

In fairness and complete honesty... I think the ONLY time that PP would be cheaper is for those sellers who have EXCEEDINGLY low volume... and who cannot meet the minimum number of transactions that's required by most merchant providers. For those ultra-small merchants, PP is a cheaper alternative.

by: zvicki

I just signed up for "Square". I haven't yet received the reader, and won't be actually using it till next month at my next estate sale - but I'm wondering.. Have any of you used this service before?
What have you found out about it? I'm still on the fence - Been in business 15 yrs. and never took anything but cash or check - I'm wondering if I should just continue this way? The square agreement says I'm not allowed to charge customers to cover their fee? This seems unfair to me, as I pay no fee with cash or check? Whats your opinion on this?

by: Anonymous Annie

@Zvicki: Any fee is an annoyance, but your best bet is to just raise your prices to cover this additional cost of doing business.

Or... if you're finding that you're able to get MORE business because you're able to accept credit cards, then the additional profits may offset the fee you're paying (without raising prices!)

Or... you could do the same thing that many gas stations used to do... they would reward people with a small discount if the customer paid with cash. (True, this is just a technicality that has the same effect as charging a fee for using a credit card, and such a scheme might also be prohibited by the Square user agreement.)

Good luck!

by: JoJo

I use Square at my shows and love it.  I wouldn't change to Paypal for any reason.  I try to avoid Paypal whenever possible simply because I'm fairly disgusted with eBay and Paypal.  And as far as it being more expensive than a merchant account, that really depends on your volume.  I went through and calculated my merchant rate and when I included all of the annual fees, monthly fees, and misc extra fees (so in short my actual cost) it came out to about 8% per transaction.  So, for me, Square is much cheaper and I really like it.

by: Philip Cohen

And, Annie, if you are buying internationally don't forget to factor in PreyPal's 3% FX fee.


eBay / PayPal / Donahoe: Dead Men Walking