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Auctionbytes-Update, Number 9 - March 04, 2000 - ISSN 1528-6703     Previous Story | Contents | Next Story
	Follow-up Article: PayPal Online Payment Service By Ina Steiner AuctionBytes.com March 04, 2000
I received a letter from a reader with questions about the PayPal service, which I reviewed in the last issue. If you remember, PayPal is an online payment service that allows you to pay for online auction items with a credit card for no charge. Donna wrote: "I don't know how you can say that PayPal charges your Credit Card in $5 increments. I copied and pasted the PayPal contract regarding the Credit Card charge of $5.00. I'm receiving this to mean that every time a Credit card is used, the account is charged $5.00. "Not ALL funds can be withdrawn at any time: (the following is from the Contract) Any amount charged to a credit card but not transferred to a Recipient ("Credit Card Surplus"), will be added to the Sender's PayPal account. The sender may use the Credit Card Surplus to pay other Users, but the Sender may not withdraw any Credit Card Surplus." Well, I checked with PayPal, and PayPal is indeed free. There is no $5 charge when you use the service. However, Donna is correct in that you can't necessarily withdraw all the funds. Here's what Vince Sollitto of PayPal said: "As to your reader's questions, she has two: does PayPal charge your credit card $5 for each transaction? Answer, no. Your article described the transaction sequence exactly correctly. People may make transactions in denominations no smaller than one cent however we will charge your credit card in $5 increments, and place any remaining balance ($4.99) in your account. "Her other question was: how come I can't withdraw that "credit card surplus?" Answer: we do not serve as a cash-advance ATM for credit cards. You can withdraw any money someone sends you, but you can not use PayPal as a way to take money from your credit card and deposit it in your bank account to access with your ATM card without having to pay any credit card cash advance fees. So, in theory, you can be charged up to $4.99 on your credit card if your balance is not sufficient to cover a transaction and then not be able to withdraw it. You could, of course, email it to someone else as payment...." Thank you, Donna, for catching that important point. If you have used PayPal or any other online payment system, leave a message in the General Feedback Message Board http://www.auctionbytes.com/forum/phpBB/index.php and tell us about your experience. Note that we reviewed the BidPay online payment service in Issue #6 of AuctionBytes-Update (http://www.auctionbytes.com/Email_Newsletter/email_newsletter.html), and the PayPal online payment service in Issue #8 (http://www.auctionbytes.com/Email_Newsletter/Email_Archives/22000e.html).