Users of PayPal's Website Payments Pro and Virtual Terminal received an email on Thursday informing them that fees were increasing effective September 1, 2007. There's been no announcement on the PayPal or eBay Website. Sellers use the services for processing payments for orders made through their websites and to process phone orders.

The letter told users that monthly service fees for Website Payments Pro and Virtual Terminal will increase from $20 to $30 per month. Transaction prices will remain at $0.30 per captured transaction, but a $0.30 fee will now also be assessed on all successful authorizations that have not been captured within 29 days. In addition, Virtual Terminal transactions will cost between 2.4% and 3.1% depending on processing volume. Currently, those fees are set at 2.2% - 2.9%. Current pricing for Virtual Terminal is spelled out here: https://www.paypal.com/us/cgi-bin/webscr?cmd=_display-vt-fees-outside

One seller said, "I could have easily accepted an increase; however, in this amount, it is pure greed just because they can." However, he then said, "At least for virtual terminal users like myself, I think this is hard to beat."

Update 7/20/07: PayPal spokesperson Sara Bettencourt confirmed the fee increase on Friday afternoon, saying it only affects those customers using direct credit-card processing services. PayPal increased fees on Website Payments Pro and Virtual Terminal because "we were not recouping the costs," Bettencourt said. There are a lot of fees to process credit cards, she said, and PayPal fees are still much lower than other merchant accounts out there when factoring in "hidden" fees, such as statement fees and gateway fees that PayPal does not charge. Bettencourt said the fees do not affect the majority of eBay sellers, and PayPal has reached out to channel partners such as web-hosting firms whose customers may be affected.