[HN Gopher] Upcoming Changes for Some US Businesses
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Upcoming Changes for Some US Businesses
Author : arbuge
Score : 55 points
Date : 2021-06-19 14:16 UTC (8 hours ago)
(HTM) web link (newsroom.paypal-corp.com)
(TXT) w3m dump (newsroom.paypal-corp.com)
| Dah00n wrote:
| You really shouldn't use Paypal. I have used a lot of payment
| systems etc. and none comes close to the awfulness that is
| Paypal.
| PaulDavisThe1st wrote:
| Tell me where I can pay just 10c on a US$1 transaction (say,
| $7k of them each month), and I'll be right there. Promise!
| MikeDelta wrote:
| Given your experience, which ones would you recommend as
| alternative?
| analog31 wrote:
| I use a PP merchant account, here's why. I have a side business
| that makes a little electronic gadget for an obscure hobby. For
| the most part, my customers are not techies.
|
| PP is the only [0] payment processing system that does not
| require me to maintain my own custom web server, either
| physically or in the cloud. All of the other services work like
| this: "Just put this code on your server, to accept payments
| through our service." But much as I love programming, I don't
| trust myself to make my own server work with 100% uptime, no
| surprise fees, or gaping security holes.
|
| With PP, I can use a totally static web page for my business,
| with a "button" that calls PP's server. Or somebody can even
| just send the money to me with a note about what they're
| ordering. Some customers get really confused and I can kind of
| hand hold them through the purchasing process.
|
| Perhaps a second benefit is the whole buyer/seller protection
| racket. I have had zero problems with buyers, but I think the
| buyer-friendly approach lets people be a little bit more
| confident about sending their money to some unknown person on
| the web. The fee is X percent, so I know that I need to sell Y
| more units to make up for it, but I think the reputation of PP
| on the buyer side probably generates those sales for me.
|
| Of course I've read some of the horror stories on the seller
| side, but they seem to be mostly related to selling digital or
| intangible goods (for lack of a better term). Also, I figure
| that someone who's already selling a digital service has got
| the whole web server thing figured out.
|
| [0] I occasionally go out there and look for an alternative,
| and if my claim is outdated, I'd love to know.
| easrng wrote:
| Stripe has Payment Links now which don't require any sever.
| https://stripe.com/payments/payment-links
| fairity wrote:
| In many cases, you'd be making a big mistake not offering
| Paypal as a payment option in your checkout flow because it
| increases conversion rate in many industries.
|
| For my business, we split tested only offering credit card
| checkout versus a credit card AND paypal option. The latter
| converted ~8% better over a statistically significant sample
| size. For most businesses, this lift in conversion rate is a
| huge deal and largely covers the incremental transaction fees.
| PaulDavisThe1st wrote:
| Another interesting question is what this will mean for Braintree
| rates. They are a wholly-owned subsidiary of PayPal but function
| like an almost-wholly independent payment system. I wonder if
| their rates will shift in step.
| liquidify wrote:
| Based on this article, I'm not clear as to what exactly has
| changed and by how much. I wonder if they intentionally made it
| difficult to understand what they are doing.
| erikrothoff wrote:
| Be a business in Sweden. Charge customers in USD. Paypal charges
| a fee for the payment. Then they charge a fee for the currency
| conversion from the customers' local currency conversion. Then
| they use the worst conversion rate for withdrawing money from
| your account to local bank account (like 5% worse than actual
| rates). You could get around this by withdrawing the USD to a USD
| account via Transferwise. They changed (fixed) this by charging a
| 3% withdrawal fee from USD to USD. So just moving 10000 usd of
| OUR money to OUR bank account costs 300 USD. That's AFTER the
| Paypal transaction fee AND after the conversion fee from
| customer's local currency to USD. Thank god for competition, at
| least we can start moving new customers to Stripe. But dear lord,
| please stop them
| simonsarris wrote:
| Aannoying how hard it is to compare. So for online payments:
| OLD: 2.90% + $0.30 NEW: 3.49% + $0.49
|
| It seems like some in-store payments might be slightly cheaper,
| but I don't want to misread anything. It's funny that they
| benchmark their in-store numbers vs Square, but decline to
| benchmark anything else. Their "new" online fee is now higher
| than Stripe, whereas before it was identical (Stripe is 2.9% +
| $0.30)
|
| https://www.paypal.com/us/webapps/mpp/merchant-fees
|
| The "Why are we making this change?" section never answers the
| question, of course.
| kerng wrote:
| I think it's part of a general price increase we have/will
| shortly see everywhere. Although I'm expecting it in many
| areas, it's still crazy how steep the rise is.
| gruez wrote:
| You mean because of inflation? That wouldn't explain why the
| % part of the fee is increasing.
| bostonsre wrote:
| Shouldn't inflation cause money to have less buying power
| which would mean prices increase? If so, PayPal wouldn't
| need to change their percentage to adjust for inflation.
| [deleted]
| BuyMyBitcoins wrote:
| Indeed, charging a percent fee on every transaction is
| inflation proof. I _could_ see the flat rate going up due
| to inflation but to increase both looks like PayPal is
| just being greedy.
| an_opabinia wrote:
| Yeah, the poster doesn't know what they're talking about.
| Also, App Store-like fees have been declining in the last
| two years.
| kerng wrote:
| Everyone will try via various means to get a piece of the
| multi trillion dollar pie the US is creating.
| ceejayoz wrote:
| The % part is probably rising because of the increase in
| credit card rewards. 2% cash back on everything, 4-5% on
| travel and restaurants and groceries... all paid for by
| increasing interchange fees.
|
| The Visa Signature, Visa Infinite, and MasterCard World
| Elite cards have approached Amex in fees. Fixed-rate
| processors like PayPal and Stripe are getting squeezed
| here.
| weird-eye-issue wrote:
| How did you arrive at that conclusion?
| gruez wrote:
| The "inflation" bit, or the "percentage shouldn't go" up
| bit?
| tyingq wrote:
| That's not quite the whole story. The new 3.49% is when you
| choose "old school pay with Paypal".
|
| For online:
|
| If you use it like Stripe, to take a credit card payment (where
| the end user doesn't know you're using Paypal), their rates are
| lower than Stripe. 2.59%+$0.49 (Paypal) vs 2.9%+$0.30 (Stripe).
|
| For in-person, as a "normal" credit card reader: 2.29% + $0.09.
| Ignoring in-person old school Paypal, as I don't believe anyone
| really uses that.
|
| Though, for in-person, I would guess a regular old merchant
| account would be a better idea than Paypal, Square, or Stripe.
| So many transactions are debit cards, which are dirt cheap if
| you just use a a normal merchant account. Way cheaper than
| Stripe, Paypal, Square, etc.
| nickjj wrote:
| > The new 3.49% is when you choose "old school pay with
| Paypal".
|
| I don't think this is really old school. This is how most
| folks use PayPal.
|
| I accept a decent amount of transactions online and I have
| about a 50 / 50 split between folks paying with Stripe and
| PayPal. The people who want to use PayPal are using it with
| the new 3.49% rates method because this is the one where they
| enter in their PayPal email address to make a payment.
| Literally 100% of the PayPal transactions I've accepted over
| the last 3 years are categorized as "PayPal checkout" which
| is hit by the new rate moving forward.
|
| This is a direct price increase by PayPal for almost everyone
| accepting payments online through PayPal. From 2.9% + 30c to
| 3.49% + 49c. It makes them substantially more expensive than
| Stripe because everyone who pays with PayPal is using their
| email address not a credit card. It's no longer a no brainer
| decision to support both on your site back when the rates
| were the same as Stripe.
| tyingq wrote:
| Sure. But, if you're comparing to Stripe I think it's fair
| to show the fee differences for straight credit card
| payments.
| nickjj wrote:
| > But, if you're comparing to Stripe I think it's fair to
| show the fee differences for straight credit card
| payments.
|
| The only thing that matters is the bottom line for end
| customers. They either pay by credit card or PayPal (I
| know there's Apple Pay and crypto too, but let's ignore
| those for now).
|
| If the customer uses a credit card they don't care if
| Stripe or PayPal processes it. They just want to enter in
| their credit card and be done with it.
|
| Most businesses will be using Stripe's credit card forms
| for that because it lets you embed the form into their
| page so the customer doesn't need to leave. Stripe's API
| is also a billion times better than PayPal's so I can't
| imagine anyone will realistically want to use PayPal's
| API directly to embed a credit / debit form (assuming
| this is even an option).
|
| However when folks want to pay using PayPal, there is
| only 1 option of using PayPal with their associated email
| address. There's no escaping this price increase short of
| dropping all support for PayPal, which is going to be a
| very big net loss from loss of sales from anyone who
| doesn't have a credit or debit card.
|
| So yes, this is a direct price increase to continue using
| PayPal and it's unrelated to Stripe also supporting
| credit cards.
| tyingq wrote:
| Yes, I understand how Paypal works. But again, if you're
| a new online seller, you also want to know what different
| places charge for a straight credit card payment. Stripe
| is nice, but people do use different providers.
|
| _" I can't imagine anyone will realistically want to use
| PayPal's API directly to embed a credit / debit form
| (assuming this is even an option)."_
|
| Yes, it very much is an option, used by many. They call
| it "Paypal Business". I think that's the part you're not
| understanding. You can integrate Paypal as a credit card
| processor without the end users knowing it's paypal
| during the purchase. They don't need a paypal account.
| nickjj wrote:
| > You can integrate Paypal as a credit card processor
| without the end users knowing it's paypal during the
| purchase. They don't need a paypal account.
|
| Do you have a link to their API documentation on using
| this? Every search around this leads to their hosted
| checkout page which lets you pick between PayPal or a
| credit card or the legacy "Payments Pro" option which is
| no longer recommended to use and technically labeled as
| unable to sign up for unless you're a pre-existing user.
| I have a PayPal business account btw.
|
| > used by many.
|
| A ton of folks are using Stripe too, and this PayPal
| notification is coming out barely 6 weeks before the
| change in rates. If you wanted to use their new CC rates
| it would mean switching your entire billing system over
| from Stripe to PayPal for accepting credit cards.
|
| Plus there's a ton of 3rd party services that offer SAAS
| apps around handling billing for you through credit card
| or PayPal and almost all of them use Stripe for credit
| cards. This makes switching to PayPal's direct CC payment
| not an option for many, which translates to a price
| increase for using PayPal.
| tyingq wrote:
| > Do you have a link to their API documentation on using
| this?
|
| Sure...
|
| https://developer.paypal.com/docs/business/checkout/advan
| ced...
| U8dcN7vx wrote:
| The newsroom piece says why, it seems to me: "to better align
| our pricing with the value that our products and services
| provide.", aka because we want to make more money and we have
| sufficient leverage.
| [deleted]
| PaulDavisThe1st wrote:
| Q: Why are we doing this?
|
| A: Because we feel like it.
|
| Q: Isn't PayPal already a hugely profitable company?
|
| A: Sure, but we think we can do better.
|
| Q: What about micropayments?
|
| A: As usual, we try not to mention our support for them.
| antonzabirko wrote:
| They should just change their QNA page to this, it does a
| better job of describing the new changes.
| blueblisters wrote:
| Is there an actual market for micropayments? I would imagine
| someone would have built a wallet for small-value tokens, and a
| cheap way to transact with them. But I don't think there's much
| utility beyond paying for news articles.
| PaulDavisThe1st wrote:
| The overwhelming majority of the income for Ardour (how I
| make a living) arrives in the form of payments of < US$12
| (and a substantial chunk of those are for US$1). PayPal's
| micropayment system saves us $23c per $1 transaction, which
| is _huge_.
| DoreenMichele wrote:
| This is news to me. Can you elaborate on their micropayment
| system or point to a source?
| PaulDavisThe1st wrote:
| The fee structure is 5% + $0.05 (in the USA at least). It
| is beneficial up to about $12.
|
| These are not "classic micropayments" in the sense of
| what was being discussed in the late 1990s and early
| 2000s. But very beneficial if you do lots of low value
| transactions.
|
| https://www.paypal.com/us/webapps/mpp/merchant-fees
|
| (Click on "Micropayments")
|
| You cannot use both fee structures on a single PayPal
| account, so to use them effectively you either need (a)
| all transactions < $12 (b) all transactions > $12 (c) two
| PayPal accounts with your own software using the correct
| account based on the transaction amount.
| DoreenMichele wrote:
| Thank you.
| dan-robertson wrote:
| My understanding is that there is a big psychological
| difference between something that costs nothing and something
| that costs 1C/, to the extent that even if (true)
| micropayments were possibly with current normal services,
| they probably wouldn't be used because it is typically hard
| enough to get a customer to part with any cash at all that it
| isn't worth it for very small amounts.
| echelon wrote:
| It may have been because the payment networks increased their
| fees.
|
| But even more probably, they might have been running a
| substantial percentage of payments at a loss and this change
| was modeled to mitigate that.
|
| Offering these rates for $6 items will lose a lot of money.
| an_opabinia wrote:
| Competition from other digital payments, specifically Apple
| Pay and specifically not Square, has taken low-fraud users
| out of PayPal, raising their costs.
|
| It's ironic that competition in payments lead to PayPal
| _raising_ its fee though. The industry is zero-sum.
| AmericanChopper wrote:
| How could you reasonably believe that the market for
| payments is zero sum? The entire market grows every day.
| user3939382 wrote:
| Hopefully it's the first step in a death spiral for PayPal,
| although they have so much momentum it would take a long
| time if at all. From what I've observed over the last 15
| years, they have a culture of horrible corporate ethics and
| deserve to disappear.
| PaulDavisThe1st wrote:
| While I'm no big fan of PayPal (I receive 95% of my
| income via them), it seems relevant to me to quote the
| entry from the Ardour FAQ about why we use PayPal:
|
| -----------
|
| WHY PAYPAL?
|
| The Ardour project receives the vast majority of the
| revenue it generates in the form of small payments (less
| than US$10, and most of them around US$1). PayPal has a
| micropayments system that saves us nearly US$0.23 on
| every US$1 transaction. As far as we know, no other
| payment company offers this (and to be honest, we worry
| that PayPal may remove it at any time). This has huge
| consequences for us in terms of the fees we have to pay,
| and thus the actual revenue we receive when you do pay.
|
| In some jurisdictions PayPal allows people to create
| subscriptions without having a credit card. This is also
| something that is not offered by any other subscription-
| offering service that we are aware of.
|
| PayPal also handles the largest number of countries
| around the world, unlike many newer online credit card-
| based services that have limited their current offerings
| to North America and Europe (at best). Since Ardour is
| used in over 140 countries around the world, this seems
| respectful of our worldwide base of users/supporters.
| amelius wrote:
| Q: Aren't you afraid that Stripe will eat your lunch?
|
| A: Uhhh...
| vgeek wrote:
| I wondered if this was to compensate from eBay's recent push to
| shift payments to their own system versus Paypal after their
| split-- but per https://finance.yahoo.com/quote/PYPL/financials,
| Paypal's revenue hasn't dipped and they seem to be plenty
| profitable. Just a cash grab or actual increased fees/risks due
| to merchant profile?
| mrtweetyhack wrote:
| Paypal is a scam
| latchkey wrote:
| Interesting the comparison to Strip and Square which must be
| eating into their business. Anyone who's doing enough volume
| through these services isn't paying those published rates anyway.
| This will actually eat more into the smaller shops, who get the
| highest rates.
|
| I wonder how this is affected by the value of the dollar. Things
| are generally getting more expensive across the board.
| darig wrote:
| Paypal stole all the money from my legal business 20 years ago,
| and I will never use them again. They are corrupt and evil.
| Thieves.
| stadium wrote:
| Venmo currently has no fees for consumers, is this changing too
| or only businesses are impacted by the change?
| SV_BubbleTime wrote:
| Venmo will cancel your account at the drop of a hat, faster
| than parent company PayPal. I wouldn't recommend anyone trust
| that system for anything.
|
| Both my SO and I were canceled because we separately accepted
| payments from people out of state.
|
| The terms for Venmo are amazingly limited. Find a better
| option.
| resoluteteeth wrote:
| I don't understand the difference between digital payments and
| credit card payments, but if digital payments are what stores are
| using, they're all probably going to ditch PayPal now.
| Covzire wrote:
| Another monopoly continues to grow unabated.
| graeme wrote:
| Monopoly doesn't mean "big company I dislike". It has an actual
| definition and Paypal doesn't meet it.
| gruez wrote:
| Payment processing is hardly a monopoly. As others have
| mentioned square and stripe are both viable alternatives.
| nickjj wrote:
| Stripe isn't a viable alternative if someone wants to pay
| using PayPal instead of a credit card. This is especially
| common for folks who want to make 1 time payments and don't
| have access to a credit / debit card or simply feel more
| comfortable using PayPal.
|
| PayPal is a monopoly on accepting payments by email addresses
| associated to a PayPal account. There is no alternative.
| gruez wrote:
| Sounds like the straightforward thing to do in that case is
| offer both options and get the consumer to pay the
| difference. Also AFAIK google pay and amazon pay offer
| similar service, but they're much less popular.
| nickjj wrote:
| Making the customer pay the difference is tricky because
| it would mean showing a different checkout price based on
| the payment method.
|
| What will probably happen is businesses will increase
| their prices across the board for everyone which is a win
| for the payment provider but a loss for both businesses
| and customers.
| lvh wrote:
| I get the rationale for using a separate domain for user-
| generated content, I sort-of get the rationale for an internal
| corp domain, but seeing material facts disclosed on paypal-
| corp.com reminds me how limited URL bars are for teaching people
| not to fall for phishing.
| bombcar wrote:
| PayPal-corp.biz would be a bit worse but why couldn't they just
| use corp.paypal.com?!
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