My PayPal credit card beef, Part II: PayPal responds

Maybe my PayPal whining will result in some sort of change, after all.

In a post yesterday, I wrote about what I felt were unfair policies involving credit card fees on PayPal. Specifically, I was frustrated about the fees incurred when using a credit card. Currently, a sender has the choice at the time of the credit card transaction - pay the fees (which are roughly 3 percent plus 30 cents) or pass them along to the recipient. I argued that there should be a way for recipients to block credit card payments where the sender has asked to pass along the fees. Currently, there is no way for recipients to block such transactions.

The post received a fair amount of feedback from some pretty passionate readers and I also received several private e-mails - some nice, some not so nice. One of the emails came from Anuj Naya, director of global communications for PayPal. He wanted to chat about the post and wanted to let me know that there was, in fact, a way for recipients to refuse credit card payments. To give it a test-run, he sent $1 to my PayPal account via credit card - which ended up being only 67 cents, after the 33 cents in fees were deducted.

It turns out there's a way for me to refund, not refuse, the payment. That's what Naya was talking about. Recipients who see the credit card payments in their inboxes have 30 days to issue a refund, essentially kicking it back for any reason, including the fees. That's nice but that's not what I'm talking about. If I'm collecting from 100 people and half of them go the credit card route and pass them along to me, that's 50 refunds I have to process. Wouldn't it be easier for those to automatically get kicked back to the sender?

That's all I'm saying.

Naya said he also misunderstood exactly what it was I was trying to do and acknowledged that, currently, the service does not allow recipients the flexibility to decide how credit card fees will be processed. He said he'd pass along the suggestion to the engineering team and I agreed to write about changes they make to meet this need.

I seriously hope that eBay takes this one into consideration. If eBay wants to grow PayPal the way it has said it wants to, then it really does need to recognize that buyers and sellers aren't the only ones who exchange money. There's a whole market of people out there - from office coffee funds to friends pitching in for a big wedding gift. Debit cards have all but eliminated the need to carry cash and checks and it would only make sense to enable everyday folks to pitch in this way.

If you're the one who's collecting for the wedding gift - and pitching in, as well - do you really think it's fair that you have to take a $3 loss out of your own pocket for every co-worker who chose to pitch-in using a debit card?

I don't.

Suggested reading: Internet slowly wakes up to PayPal's quiet fee hike