My PayPal Rant

I signed up for PayPal several years ago when it was a fairly new business - way before it was acquired by Ebay. For those of you unaware of this service, PayPal is sort of an online escrow service that mediates payments between buyers and sellers. It's super convienent for paying for auctions to private individuals because you can pay them with a credit card and they don't have to have any special equipment or service accounts with the credit card companies to accept payment.

PayPal sets a cumulative spending limit on its customers. You can only spend so much (I think it was something like $2000) unless you give them bank account information to "confirm" your account. At the time, I didn't think much of this. I guessed that maybe it was more difficult to open a false checking account than it was to get a false credit card?

It wasn't until about a year later when Ebay auctions began to show the "Pay Now" tag that convienently lets you go right from your auction to your PayPal account that I figured out what was going on. Each and every time you go to make a payment, PayPal tries to do a direct bank withdrawal. No matter how you set your account preferences, they always set it back. You can, of course use their "other funding sources" option to change where that particular payment is taken from, however, the very next time you go to make a payment they try it again.

Now, PayPal claims that I should prefer this method of payment because I'm insured for a greater amount of money, and that it's somehow more secure - or at least so says the interrum confirmation page that tries to discourage me from using a credit card as a funding source each and every time I switch the payment method.

A quick look at your bank statement after one of these "direct transfer" bank withdrawals will show what's really going on. PayPal hawks their service as a way to make convienent online payments with your credit card - that's their description of the service, but they don't like to do this because like any other vendor they have to pay the card company for the transaction fee. But with a bank withdrawal, its the customer that gets stuck with the fee.

I confronted them about this, advising that I would never want to pay this way, and that I would like my account to stop setting that as the default payment method because the only way I would ever use it was if I was tricked into doing so. (Which is exactly what this "default" setting is intended to do, I'm sure.)

Their reply was to tell me that I should switch the funding option manually every single time I use their service and if I didn't like that answer, I should call their non-toll free number. Luckily I actually live close enough to PayPal's office that I don't have to pay for the call, but it is pretty obvious that this is only a pretense of recourse. Of course, although the webform I created resulted in an email response, when I attempted to respond directly to the email, they explained that they ignore email responses. I wonder why....

In short, I'll be shopping around for a more honest alternative to PayPal. I can't stand it when companies lie to me.