"*UPDATE Bank of America PayPal fee" Topic

Just an update to a thread I started the other day: TMP link

*DISCLAIMER* I will explain BoA's answer to the best of my ability. There are no guarantees that my explanation is entirely correct, but any misinformation isn't being given with malice, it's just how I understood remember it….

I called BoA yesterday and explained to them my question about their $10 USD charge for a purchase I had made. (see link above)

The gentlemen on the other end explained to my that PayPal has recently updated the way they report transaction to financial institutions. A correction on their part that the CS Rep said was long over-due. He also sounded very familiar with my question, so I assumed I was not the first person to have called with this. He explained to me that if a purchase is made on PayPal with a Credit Card, and that purchase isn't to an email that is registered as a business account it is reported as a Cash Advance. And subject to Bank Fees because the sender is turning Credit into Cash for someone else.

He also said the Merchant I transacted with may not have invoiced me for my order, but just sent a Request for Cash. According to PayPal policy, if that is the case, if the request is paid with a PayPal balance or a bank account there are no fees, but if paid for with a Credit Card, there are.

I tried to contact PayPal also to see if they could tell me how the transaction was conducted, but because of the COVID-19 situation, you cannot currently speak to a Human Being.

This situation gets me wondering….if I buy something from someone here on TMP, since I don't carry a PayPal balance or have a bank account hooked to PayPal, will I incur Bank Fees now? If so, that will stop me from buying from individuals for sure…..

As a side note, BoA never offered up to refund my $10 USD fee. We will be switching PayPal to a different credit card.

Thanks for reading, I hope I haven't cause more questions or concerns with my follow-up. I consider the fault to be mine. The Merchant however did send $13 USD claiming the fault may have been his. This wasn't requested, but done because he is a great person with great Customer Service.

Dave

Similar happens in Australia too. Here for example the government has deemed the purchase of a lottery ticket on a credit card to be a cash advance, supposedly to discourage gambling….

Did you use your debit card? I have all my purchases linked to my AMEX and don't get charged any extra fees. That's the main reason I use it because it has a no foreign transaction fees I don't get hit buying stuff from the UK.

Let me put my banker hat back on and try to explain what I think is going on.

When a merchant decides to accept credit cards, he signs a user agreement with the credit card provider, which may be a bank or another financial services provider. The merchant agrees to pay the bank a transaction or processing fee (the amount varies from provider to provider) each time a credit card sale is transacted. This fee is usually invisible to the buyer. At one time, American Express charged the highest transaction fees in the industry, which is why many merchants won't accept it.

It gets a bit convoluted now, but if you send money to an individual via a credit card, and that individual has not signed a credit card user agreement, (hence does not "accept" credit cards so there is no processing fee) then in essence it is a cash advance in the broad sense of the term. Rather than accepting a credit card as payment, the individual is indeed accepting cash.

PayPal is reporting these transactions to the credit card provider, which may or may not be your primary bank, and may not be a bank at all. It's the company who issued your credit card. What the credit card issuer does with that information is up to it, including whether or not to charge a fee.

Again, my advice is to shop around. All credit cards are not equal.

I wish they would just throw up a warning that a $10 USD fee will be applied. Would you like to continue?
That would be nice.

The sole reason I have a Facebook account is to pass
money from the sale of her wargamer husband's estate
along to his widow.

If you 'friend' someone on FB, you can use FB messenger
to send money to that person, no fee, no 'cut' and
the process is instantaneous.

AFAIK, the amount goes directly from my account
(using my DC) directly to her's.

Each party to the Tx receives a message of the Tx.

I don't think PayPal would have that information. There are so many credit card issuers, all with different policies, that collecting the information and keeping it current would be a Herculean task. Of course, PayPal would also be blamed for every mistake, since it would insert itself between the customer and the credit card issuer.

Could it be done? Probably. Are surprise fees fair? No. Would I want to be involved, if I was PayPal? Obviously not.

Fundamentally, this is a political issue. Laws reflect the views of the parties in control.

There really are no surprise fees. Banking regulations – laws if you will – specifically forbid such practices. Consumer transactions are heavily regulated. In fact, even small community banks will have a Compliance Officer on it's payroll to make sure regulations are followed, because penalties can be harsh. I'm sure you saw where Wells Fargo was fined $1 USD Billion for its misdeeds.

What typically happens is you receive a disclosure from your bank or credit card company in the mail or via email, outlining the amount of the fee and when it can be charged. But more often than not, we think, "more nonsense from the bank" and discard it without reading it. Credit Card transaction are covered under Federal Reserve Regulation Z, and credit card companies must adhere to that regulation, which includes when and how fees are charged and collected, as well as how customers are notified.

See NYTimes article:

link

> There really are no surprise fees. Banking regulations – laws if you will – specifically forbid such practices.

Laws that are HIGHLY lobbied upon by banks…

Even if the laws/regulations are lobbied for/against by banks, the point still stands. Surprise fees are illegal.

They can charge you $100 USD to make change if they want, they just have to tell you first.

Extraboi is correct about the number of players. I take credit cards directly. I signed up with Elavon and have a little CC machine.

HOWEVER it would behoove small businesses (like me) to make sure we are business accounts – if possible – with Paypal so our customers don't face this.

There are a LOT of powerful players who will HATE this fee as people will stop using their service. Some people would rather forego Paypal/Venmo etc. rather than switch cards.

PayPal type providers are not really the issue here.
The fees originate from the banking entity that provides/services the credit cards or a line of credit.
The fee applies when you use your credit to extend a cash payment to someone. In other words you are using borrowed cash to make the transfer in cash. That is basically when the fee is triggered. If the payment is made from cash in a bank account or from a Paypal balance no fee is or should be triggered. This is not the same as using your credit card with a a company set up to accept credit cards that we do everyday. The fee can also be triggered by a company accepting payments as a cash transfer, this can happen when buying on ebay and on the marketplace here as they can bypass the fees they would pay to credit card processing service. These types of payments would also apply to say buying a bunch of painted figures from a fellow gamer and you use your credit card to make the payment though paypal or venmo.

I am sure Paypal is not thrilled because they use the idea of it being a buffer between the buyer and a seller as selling point.

There really are no surprise fees.

"Wrong, sir! Wrong! Under section 37B of the contract signed by him, it states quite clearly that all offers shall become null and void if – and you can read it for yourself in this photostatic copy:

I, the undersigned, shall forfeit all rights, privileges, and licenses herein and herein contained, et cetera, et cetera… Fax mentis incendium gloria cultum, et cetera, et cetera… Memo bis punitor delicatum!

It's all there, black and white, clear as crystal! You stole fizzy lifting drinks! You bumped into the ceiling which now has to be washed and sterilized, so you get nothing! You lose! Good day, sir!"

@PzGeneral: did you ask BofA for a refund? I'm just curious about what their response would be to a refund request. Maybe a threat that you will switch to another card issuer might give you some leverage.

> Even if the laws/regulations are lobbied for/against by banks, the point still stands. Surprise fees are illegal.

Things that ARE legal should not be. We have been brainwashed by large corporations into thinking regulations are wrong and $10 USD fees for something that cost the bank less then a cent to process is what we end up with.

What happens if I pay by Paypal to another member on TMP for their stuff? Assuming that both of us are just average joes. In my case, my Paypal is connected to my bank account, not my credit card. So no surcharge. If my Paypal account was connect to my credit card?

If you pay another member and link it to a BOA CC, they reclassify the charge as a cash advance. I really doubt there is anywhere near the same risk in paypal or venmo where the payee originates most advances. This is just a money grab. I was thinking of eliminating the BOA VISA. This is just another reason.

My $.02 USD

Wife passed me some monies using PayPal few months back.
Because she sent me the money from her AMEX card there was a $6.50 USD charge to her yo do so.
I use PayPal to buy and sell and send the wife money when needed.
The money that comes or goes my way, if I don't have a current PayPal balance it comes/goes from my bank account.
I only have a debit card attached to it.
The $6.50 USD fee from above is the only time I have heard of such a fee. And wife said it was because she used her card.

Grimm

@Der Alte Fritz – No, I didn't ask for a refund. I accepted their explanation of what happened and ate to fee.

But we have switched from BoA to another Credit Card. We'll see if the fees happen again….

Thanks all for your input,

Dave

I've been a PayPal customer since 2000? I've used it personally, and as a business: I accepted CC payments through PayPal, but I never knew how the customer paid me for my product, as I only saw money appear in my account.

Had a customer call me to ask about their CC information, as he thought it might have been compromised. I shared with him that I thought he used PayPal to transfer cash to me. I never knew he had used his CC to pay me. PayPal took care of his CC payment, behind the scenes, for me. I just saw money appear in my account, along with an order for product. It was flawless, and fantastic! I only accepted PayPal payments, or USPS Money Orders; the PayPal system allowed buyers to use their CC's, with PayPal handling everything, including foreign currency conversions!

I received a few international orders, but it was just USD's which appeared in my account, without any fees other than the normal basic fees, which were low, as my customers' orders never topped $30. USD. I used PayPal for my business, from 2000(?) until 2007, without issues. I've used it personally, from the beginning of my business, mostly for e-Bay purchases, but also for other businesses which accept PayPal. It is my first choice for payment, if offered.

I've always tied my Debit Card to my PayPal. Never had issues with unexpected fees. I am still a die-hard fan of PayPal… Cheers!

PayPal's total lack of people to speak to during Covid has been distressing. The customer service has been nonexistent and it seems without reason considering they could just work from home. I don't get why they went "total" shut down.

Anyone have any issues with Capitol One in this regard?