Just got this email today. Checked the date and no, its no longer April Fools. Thoughts?

--
AMENDMENTS TO THE PAYPAL ACCOUNT USER AGREEMENT
We are updating the PayPal Account User Agreement for U.S. customers. These changes will go into effect on May 7, 2019. If you agree to these changes, you don’t have to do anything. If you don’t agree with these changes, you may close your account. If you close your account before May 7, 2019, the changes will not apply to you.

Amendments to the PayPal Account User Agreement

• We’re removing the flat rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States and introducing a new variable fee of 5% based on the amount you send with a minimum of $0.99 and a maximum of $4.99 per transaction. We’re also removing any variation depending on the recipient’s country.
• We are changing the currency conversion spread to 3.25% over a base exchange rate in situations where you are a sender of money in a PayPal transaction.
• We’re changing how we treat refunds. If you refund (partially or fully) a transaction to a buyer or a donation to a donor, there are no fees to make the refund, but the fees you originally paid as the seller will not be returned to you.

https://www.paypal.com/us/webapps/mpp/ua/upcoming-policies-full

 

The problem is, they do what they want! " If you don’t agree with these changes, you may close your account. If you close your account before May 7, 2019, the changes will not apply to you." they know people are using this a lot and they would't close accounts.

 

Earlier thread with same topic of discussion.....

https://omegaforums.net/threads/new-bs-from-paypal.92594/

 

Getting tired of professional sellers airing their grievances on this forum.

 

This affects everyone.

 

Yes it has, since the beginning of credit and credit cards. No reason to raise a stink about it now.

 

Well there is a stink, but its not coming from @WatchVaultNYC

 

WOW I can buy item X. My credit card will give me 3% “cash back” when I buy item X. Does anybody wonder who is paying for the 3% “cash back”? Do the math people. PayPal is not about losing money. They are simply identifying where they are losing money and compensating.

 

The cash back does not come from the seller or buyer. It’s a marketing cost taken from everyone’s fees.

In this case it has nothing to do with CC’s but PayPal making it a more expensive tool yet again. Since they pretty much own eBay transactions they can keep raising fees and lowering benefits.

 

Good news is paypal is doing their competition a favor. It would be refreshing to have some viable options become more mainstream.

 

When merchants accept payment via credit card, they are required to pay a percentage of the transaction amount as a fee to the credit card company. If the cardholder has a participating cash back rewards program, the credit card company simply shares some of the merchant fees with the consumer. Bottom line: card issuers surrender a bit of their profits (paid by the merchant) to the card holder...

there's no free lunch

 

No it comes from card fees ie monthly/yearly fees on the card and interest. Transaction Fees are not going to the CC generally except for AX. By the far majority of card users on cashback cards never make their fees back on rewards. AX has zero fee cards with rewards but AX works very differently and charges the merchant a larger cut then most processors to do the transaction. So in the case of AX yes the merchant pays the fees. Yes there are some other "no fee" with 3% cashback but generally they want balance transfers to open them, and those are charged high interest once the time period has expired, and those high interest payments pay off the cash backs, not to mention in general higher interest on zero fee cards.

Ever notice the direct correlation between better cashback deals and rewards and highercard fees/ interest? Notice cards with no fees have no cashback, yes there are some exceptions like Airline cards which build rewards towards miles and have CB on tickets... but that is slightly different.

 

Only in the case of AX, the processor takes the cut for the others.

 

only AX? have you heard of the Discover Card? and the "what's on your wallet" Card?

 

Outside of AX about 90% of processing fees go to the processor not the credit card company. Figure about 2.5% of the transaction taken from the merchant in total, so the amount of fees the CC’s get from point of purchase is low, nowhere near enough to cover cash back.

Most processors do AX as a courtesy with little to no added fee as a service.

How do I know these things?

One PayPal froze over 5 million in funds from my company 3 times. Two, I was the point person and I’ve negotiated rates for 500million a year in CC transactions across multiple payment platforms on multiple occasions.

 

Wow, right after I types this up on my phone, I sat at my desktop to check a youtube video and the first advertisement was a lower rate processor...

Want to know how marketing works on the internet lol? I've never seen it correlate cross platform that fast before.

 

It seems as though a lot of people here buy into the marketing bullshit.

 

Apples and oranges. AX operates on a different business model than conventional bank CC companies. AX relies on higher swipe fees (2.5-3.5% swipe fee versus 1.5-2.5% charged by MC/Visa), that's the main reason is not widely accepted as compared to conventional bank CC. My statement above is how traditional bank CC operate and how the return "cash back" to the card holder.

 

But CC companies do not get much of the swipe fee except for AX. 90% of the swipe fee aka the processing fee is taken by the processor not the CC companies. This is what I am trying to say. The swipe/processing fee is not near enough to pay for cashbacks. Look at the interest rates and monthly fees on high cashback cards. My only point is that merchants are not paying for the cashbacks on CC cards, those are mostly paid from interest rates and card ownership fees. None of my cards have any cashbacks on them, and they all have low APR and zero fees.