7 ms·

PayPal raises fees for most domestic transaction types to 3.49% + $0.49

337 points by kaslai 5y ago

shoto_io 5y ago
This is straight out of Peter Thiel's handbook. Create a monopoly and then take the profits.
- fshbbdssbbgdd 5y ago
  PayPal doesn’t seem like a monopoly. Merchants can offer multiple payment processors, and customers can use a different one for each purchase without any lock-in. PayPal has strong competitors like Stripe and even Apple. They also lost their flagship client, eBay.
  - robryan 5y ago
    In some ways they are for consumer products. There is some percentage of people that won’t buy at all without the option. Then a much bigger percent that will still buy but prefer to use PayPal if you give the option.
    - another-dave 5y ago
      In fairness, I still wouldn't call that a monopoly, just a popular choice. I mean, I know some people who won't drink soft drinks unless it's specifically Coca-Cola and know a lot of people who'll pick Coke as their first choice but they clearly don't a monopoly on cola drinks.
chovybizzass 5y ago
now they are more expensive than credit cards, when I worked there in 2004-2007 their big deal was they were cheaper than credit cards.
kaslai 5y ago
I have seen absolutely zero coverage about this change so I wanted to make sure people knew about it. The change seems to have happened on August 2nd according to archive.org [1]. I checked my PayPal records to verify this was true and sure enough I've been paying the higher rate in fees starting after July. [1] https://web.archive.org/web/20210727095034/https://www.paypal.com/us/webapps/mpp/merchant-fees https://web.archive.org/web/20210727095034/https://www.paypa...
- collectedparts 5y ago
  They technically announced it [1], but I agree that it got next to no coverage. Presumably they deliberately "silently" put the announcement on their blog without circulating it to news outlets. HN discussion at the time [2]. [1] https://newsroom.paypal-corp.com/2021-06-18-Upcoming-Changes-for-Some-US-Businesses https://newsroom.paypal-corp.com/2021-06-18-Upcoming-Changes... [2] https://news.ycombinator.com/item?id=27560616 https://news.ycombinator.com/item?id=27560616
  - kaslai 5y ago
    Ah, thank you for the links. I searched prior to posting but the title on [2] is very non-descript. I was expecting a lot more outrage considering the size of this hike is pretty massive for merchants that process a lot of smaller transactions.
  - tristor 5y ago
    I have a merchant account with PayPal for my side business. I received an email notifying me of the change. I presume this is legally required for this sort of change to the terms.
- PikachuEXE 5y ago
  Thanks for your effort!
PaywallBuster 5y ago
I'm avoiding Paypal as much as possible. At this point it's basically the same as some other shitty wallet like skrill and loaded with fees for anything. 21 July 2021 Amount received 110,00 USD Fee 6,24 USD Total 103,76 USD
bserge 5y ago
Still the easiest way to start selling online, at least in Europe... They've got the low volume starter business niche by the balls.
- fastball 5y ago
  What about Shopify?
  - ffritz 5y ago
    Apples and oranges.
    - mohanmcgeek 5y ago
      There's such a thing called Shopify Pay I think it's powered by stripe though.
- exporectomy 5y ago
  Yep. I investigated Stripe once but you had to use an API. Paypal is just copy and paste code into your HTML page.
  - a_imho 5y ago
    Also Stripe is not supported in many countries.
- mrweasel 5y ago
  Maybe it has improved in the last six years, but setting up PayPal for an eCommerce site was an absolute nightmare. It could only be done by the CEO of the company, legally, and you needed a PayPal representative on the phone, guiding you through setting up the account correctly. Just sign up for a regular payment processor, if you're in Scandinavia. The larger ones will also support iDEAL, SoFORT and other local options and help you get started with those.
- jokethrowaway 5y ago
londons_explore 5y ago
It amazes me that despite not really modifying the core PayPal service for 10+ years, they are still a market leader. Parts of their business don't have much network effect, and competitors could totally rebuild the tech and eat away at the market share... Yet somehow that hasn't happened.
- brnt 5y ago
  All this, and all that other Silicon Valley financial infra, because direct bank tranfers are (presumably?) not known or difficult or impossible. From my northwestern European perspective, it's weird this straightforward solution that we've had since, well, the fifties? is overlooked.
  - ajkdhcb2 5y ago
    Fraud. Hacked bank accounts. Chargebacks. The brutality of banking customer service. These are all good reasons. PayPal does have a dispute system for 'buyer/seller protection'.
    - brnt 5y ago
      You can only transfer to a number, you can't (easily) charge back already effectuated transfer, nor can you (with a consumer account) debit a number. All of these things are covered. Buyer protection has rarely been something one needs. Some (many nowadays?) banks offer insurance for this.
      - ajkdhcb2 5y ago
        >Buyer protection has rarely been something one needs. I disagree, I think it is the biggest factor. I used it several times and I know other people who have too. >you can't (easily) charge back already effectuated transfer I promise if you try to do something involving bank transfers without doing some form of 'Know Your Customer' you'll get people try to use bank accounts that are compromised in some way. You'll be getting calls from your bank and potentially lose money, and may get your bank account closed if you persist with that behavior
dessant 5y ago
PayPal is awful for small transactions, I regularily get donations for my projects that are literally 0 USD, because all of it is eaten away by PayPal fees, and even for a 5 USD donation you end up losing around 15% of the transaction amount. Do you know of any other service that is suitable for microtransactions, besides cryptocurrencies?
- tpxl 5y ago
  As far as donations go, Patreon and Ko-fi should have a lot lower fees.
  - sebazzz 5y ago
    Patreon is not necessarily an alternative because supporting someone is more of a subscription kind of transaction, and not a one-off thing.
    - freemint 5y ago
      It also isn't alternative because it makes one-to-many transactions which can offer lower fees than one-to-one transaction due to pooling
- pkulak 5y ago
  You say no crypto, but Nano was built for exactly this. You're not gonna beat zero fees.
  - arcticbull 5y ago
    Except it exhibits absolutely monstrous volatility. [edit] That's a lot like saying you can't beat the "$0 commission" at the airport currency exchange - true, but misleading. They wreck you elsewhere (in that case, in exchange rates). The truth is if Nano were "just as good" as sending dollars back and forth except free everyone would be using it. The fact they're not, this many years in, means you're missing something in your analysis.
Urgo 5y ago
This was actually announced in a easy to miss email with the subject "Upcoming change to your account" sent on June 30 2021. It did get a little press that day but on the fee increase day I saw little reporting. These changes went into effect on August 2nd 2021. Here is a PDF that has a breakdown showing all the changes that happened that day [1] To PayPal's credit, this was their first rate increase in a very long time if not forever. That said this is a huge new fee for merchants while not providing any new services, at least at this time, to justify it. [1] https://www.paypalobjects.com/marketing/ua/pdf/US/en/feepages-080221.pdf https://www.paypalobjects.com/marketing/ua/pdf/US/en/feepage...
- kaslai 5y ago
  Yeah I definitely missed it and it caught me by total surprise today. I imagine many are in the same boat. This also comes after they've adjusted their policy so that they keep all fees even after a payment has been refunded. They're getting less and less attractive every month.
  - Urgo 5y ago
    Keeping the fees on refunds bugs me so much as well and is completely out of line. Sadly everyone seems to do this now. We haven't gone live with it yet, but following this change I actually went comparison shopping a little. I'm planning on swapping my payment processing over to Braintree.. which is still paypal.. but actually does have less fees. It has the benefit of still being able to accept paypal payments (at the paypal fee rate) but lower fees for credit card transactions.
    - yarcob 5y ago
      The last time I went comparison shopping I figured Wirecard was a good deal. I even got a quote from them and planned to switch to them. But I was a lazy procrastinator, so I did nothing for a couple of months, and then all of the sudden I read about them on the news...
- muixoozie 5y ago
  Is this in anyway related to EBay cutting them out and passing their savings to themselves?
7demons 5y ago
PayPal is going cPanel route. It should be replaced and never look back. Those, who can't control their greed are doomed to see the void of ignorance.
- zatkin 5y ago
  Can you elaborate on what you mean by “cPanel route”?
  - MangoCoffee 5y ago
    i assumed he is talking about the control panel (cPanel) for webhosting. https://www.webhostingtalk.com/showthread.php?t=1770316 https://www.webhostingtalk.com/showthread.php?t=1770316
systemvoltage 5y ago
I run a SMB with $1.2M in transactions per year through various online storefronts. Paypal/Stripe are the most common forms of payment, but to my surprise the split is 70%(Paypal), 30%(Stripe including Apple/GPay/Alipay). We see a consistent behavior that perhaps incidates Paypal is far easier to use than Stripe. I feel like the slightest friction in the choice between payment options and it will win. Paypal offers the easiest way to pay, perhaps even easier than Apple Pay. It is one click on the popup window. With Apple Pay, you gotta double click this awkward button on the side, then Face ID that doesn't work with the mask, followed by entering the PIN - the whole thing takes too long. It also doesn't work on most browsers and desktop computers (perhaps Apple Pay works on macOS with Safari). I thought about this a lot and tried to go through the details of the friction that leads to better conversion. Stripe has a better developer experience but it doesn't help the customer. Stripe desparately needs a customer-facing account that can manage cards and payment methods. If it were my guess, Stripe is already working on this.
- fredophile 5y ago
  As a customer there are a few reasons I might prefer PayPal. First, they have my credit card info and shipping address already. Using their checkout means I don't need to fill all that info in. I may not trust some random website I only plan to buy from once with my credit card info. There are times when I can get money back from PayPal purchases on some of my credit cards. Right now I can get 5% back on one of them until the end of December. That means if paypal is an option I'm going to us it.
- the__alchemist 5y ago
  I've noticed the same. If you have CCs stored in the browser, I find the Stripe flow easier on my website, and it loads very fast, while the PayPal widget is the slowest-loading part of the website. I see about a 70/30 percent split, as you do, for Paypal/Stripe.
- retrobox 5y ago
  I wonder if PayPal’s consumer protection is also part of the appeal? I had to use the dispute resolution once. The merchant become unresponsive to all other means. PayPal ruled in my favour and provided a refund. I’m not sure a credit card chargeback would have been as simple.
sdrinf 5y ago
Has anyone ran a recent A/B test for Stripe direct CC-based checkout + paypal vs Stripe only in the context of B2C subscriptions? Last time I've checked circa 2014-2015, there was consumer trust in Paypal (for cancellation/etc), and so having that option added ~+10% conversion rate (or so), but would appreciate more recent data, thank you!
- exporectomy 5y ago
  No but I bet some people are turned away because of Paypal. I use it and customers occasionally inquire "Do you accept credit cards because we don't have a Paypal account?". It's aggravating that they make the credit card option hard to find compared to the shitty Paypal account login.
  - foreigner 5y ago
    I am one of those people that is put off by PayPal.
- WA 5y ago
  German userbase, B2C, I offer PayPal, Stripe and SEPA wire transfer: 70-75% PayPal 15-20% Stripe 7-9% SEPA wire transfer
- herbst 5y ago
  I am kinda forced to accept PayPal because credit card adoption is not as big in the German speaking area of Europe. Especially the younger audience often only has PayPal. I have no exact numbers but like 70% of orders I get from Germany are paid with PayPal. When I added PayPal to a SaaS of mine a few years ago only like 3% even used it.
bradwood 5y ago
Time to put all this on crypto rails and disrupt these bastards out of existence.
- kevingadd 5y ago
  Will that work particularly well since PayPal also adopted crypto? They have the money and resources to out-maneuver any weaker attempts at using crypto to displace them.
  - hirako2000 5y ago
    Yes because it's PayPal again in the middle with whatever fees they wish to apply. On crypto. The difference between crypto and cash is that the bank can refuse a cash transaction, from either end, and through. With crypto the network accepts the transactions with no recourse to block it, reverse it, or impose their view on how money should circulate.
  - imtringued 5y ago
    I assume that Lightning Network will devolve into federated payment infrastructure rather than something that is fully decentralized. It would be closer to email where providers share a protocol and interoperate by default with each other. In that sense, Paypal wouldn't compete vs crypto but with dozens of payment companies.
- ptudan 5y ago
  That's exactly what Flexa https://flexa.network/ https://flexa.network/ is doing (I just got hired there)
nikolay 5y ago
Time to leave, I guess!
dr_dshiv 5y ago
When I moved to the Netherlands, I was at first irritated that my credit cards weren't accepted anywhere. But as the debit (maestro) card transactions are often free [1], paying 3%+ to a card service does seem exorbitant. For online payments, the Dutch use the IDEAL system, which is even easier than online credit cards. This also prevents vendor lock-in, like Amazon. And, the banking apps make it super easy to send money to friends. Looking back, I have to imagine that this 3%+ tax on all American transactions must put a weight on the system. [1] https://www.ing.nl/media/ING-rates_for_business_transaction_services_uk_tcm162-135848.pdf https://www.ing.nl/media/ING-rates_for_business_transaction_...
- Scoundreller 5y ago
  Even better, many PayPal payments are from PayPal funds, Checking acct debits or EU/AU/NZ cardholders with capped charges, so PayPal pays 0% or under 1% to visa/MC for those transactions, but charges the same 3%+ to vendors. Plus additional charges for cross-border payments (even if there’s no forex) and terrible rates for forex which they probably self-settle anyway.
  - danlugo92 5y ago
    They can afford to do this because "it just works"(r)(tm).
- cm2187 5y ago
  Everything is not so much more expensive in the US, not the least because this is dwarfed by the difference in VAT. Not that I am in any way in favour of the current duopoly in credit card payments.
  - axelthegerman 5y ago
    It's not about more or less expensive or higher/lower VAT. It's about whether or not we should pay a 3+% cut to the payment processor when there are clearly other options. Nothing in this world is free, question is who pays for it and how much. Of course US credit card transaction fees also fund cashback and other reward systems
qecez 5y ago
Meanwhile, accepting Bitcoin Lightning Network payments is free of charge. Can't wait for more adoption.
- imtringued 5y ago
  I dislike Bitcoin but Lightning Network is effectively a decentralized Paypal. Assuming it works, it should have a very easy time competing against these excessive fees.
konschubert 5y ago
Paypal is a pretty scammy service also on the consumer side. When paying in foreign currency, they try to trick users into using their "conversion" service, which helpfully charges a bit more money to your credit card than you would have paid without their "assistance".
- xdfgh1112 5y ago
  A very common trap when using your credit card abroad too. If you don't insist on being charged in the local currency the payment processor may "convert" it for you with a worse rate and pocket the difference.
  - MaKey 5y ago
    I wish there was some kind of regulation against this.
- MilaM 5y ago
  Totally agree. I feel scammed every time I have to change the currency during the payment process. Some time ago, I don't remeber when they changed it, you used to be able to opt-ou of currency exchange permanently per credit card. It was a very well hidden setting and I had to google the deep link every time to find it. Nowadays you have to explicitly disable it for each and every transaction. I'm pretty sure though that most PayPal customers have no clue about this practice or just don't care.
tofukid 5y ago
I still use PayPal because it has the best global coverage and least friction for consumers. Their new checkout form also seamlessly accepts credit/debit cards and does subscriptions. Many of my customers are in countries that aren’t supported by Stripe, so it’s not much of a choice from a business perspective.
- mrweasel 5y ago
  Do you just use PayPal to accept credit/debits cards? Because there are alternatives to Stripe. They aren't as well made, but they do exist. For me, if I go to a site, that only accepts PayPal, then I'm won't be buying anything. I honestly don't trust PayPal, at all. If it's PayPal only, I assume it's fraud.
  - tofukid 5y ago
    I accept PayPal and credit/debit cards, using “PayPal Checkout”. Go to https://LuckyResumeMaker.com https://LuckyResumeMaker.com and click “Download PDF” to see what PayPal checkout looks like. Most customers pay with PayPal, but the credit/debit card option is seamless with PayPal. I think it’s even better than Stripe since it doesn’t always take someone to another page.
- herbst 5y ago
  The reason I use PayPal is because it doesn't trigger the credit card SMS confirmation that is enforced in europe and I don't have a phone number to receive them.
damsta 5y ago
PayPal is awful and I am not talking about the fee. The developer experience is so disgusting. Their developer portal is completely useless, it does not show any data. They have 5 different documentation pages about one thing, each one is more outdated than the other. If you want to onboard merchants on your platform you will have no way of seeing the connected accounts. Their button that you can integrate on your website is super heavy, it wastes so much data just to show the div, do not try to click on it if you do not want to lose a few megs of data.
- simonsarris 5y ago
  You also get rate-limited in the sandbox just for clicking around too fast. WTF is the point of a sandbox!?
tjpnz 5y ago
Tried to send some money using a long dormant account, after logging in and updating my password some automated process kicked in and froze my account. Never bothered to do anything about it because there are now more dependable and hassle free options. I was relieved to not have anything in my account. I'm even more relieved I'll never have to use their product again.
petercooper 5y ago
It's even more fun if you operate cross border because on top of all the usual fees there's a cross border fee (of 2% if the buyer was in the US) and then a markup on currency conversion of 3.75%. We used to put a lot through PayPal's merchant system but are now almost entirely on Stripe due to this non-stop nickel and diming.
wslh 5y ago
Brazil implemented a neutral QR with direct payments which been there are basically no fees if you use this system: https://news.ycombinator.com/item?id=28757537 https://news.ycombinator.com/item?id=28757537 It is incredible how, very few times, developed countries can directly build a new infrastructure that beat the infrastructure of most developed countries.
The_rationalist 5y ago
What was the previous fee?
lvl100 5y ago
Paypal is a classic rent seeker. Nearly two years into pandemic, they still refuse to hire people for live customer service. Despite record profit. If anyone is looking for a startup idea: an online payment platform that charges on outbound bank transfers only. Heck charge 5% fee. And let all transactions be completely free.
- razakel 5y ago
  That exists - wise.com.
  - lvl100 5y ago
    I don’t think so.
- toomuchtodo 5y ago
  Are you aware that the US Federal Reserve is deploying instant payments infrastructure in 2023? I believe the cost will be free to consumers, and pennies per transaction to businesses. I'd expect online payments will integrate with banking providers to support initiating instant payments from deposit accounts, similar to Europe's IBAN instant payment system. https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa... https://www.federalreserve.gov/paymentsystems/fednow_about.htm https://www.federalreserve.gov/paymentsystems/fednow_about.h... https://news.ycombinator.com/item?id=28393576 https://news.ycombinator.com/item?id=28393576 (a comment I previously wrote on this topic)
  - lvl100 5y ago
    I am aware of the Fed solution. I can tell you it’s DOA and by design.
    - toomuchtodo 5y ago
      Would love to hear more, as I know a stakeholder involved in beta testing and that's not the ground truth I'm hearing (working as expected, deployment ahead of schedule). Don't violate any NDAs of course.
lmilcin 5y ago
I have worked for an acquirer side of the business where I implemented the credit card application but also took part in complete certification process and day to day business. For a normal credit card transaction, most of the fee goes to the bank issuer of the card. This is banks' major source of income nowadays (aside people who don't pay off their credit card on time). This means that most acquiring business -- the companies like Visa, Mastercard and actual acquirers that maintain the infrastructure -- get very small part of that pie but it is still very worth their time. I don't know what kind of deal PayPal has but 3% suggests their cut is order of magnitude more than any traditional acquirer, but without hassle of maintaining EPOS terminal infrastructure. And that half a dollar is damaging to micro transactions. Technology was supposed to make it easier to pay for small things, individually. Half a dollar cannot be explained even if each transaction was processed manually.
anyfactor 5y ago
I despise Paypal. But you don't have a way to sell except for Paypal. I prefer moneygram with Visa Direct but it takes ages for the transaction to complete and often times you have to call the customer service for that. I am trying to switch to wise but it is difficult to convince clients moneygram and wise is worth the hassle.
erikrothoff 5y ago
And they charge a 5% currency conversion fee for moving money from your account. Even moving USD to another USD account they charge 3% ”fee” for doing nothing.
christrowe 5y ago
This is insane; the fee is too much, especially for domestic transactions. Also, the conversion rate is too much, especially if the money is coming from the foreign market.
nathan_gold 5y ago
It’s ok, more competitors will come in now
candyman 5y ago
I presume the US banking industry pays lots to lobby and makes big campaign donations, gives senators offspring jobs, etc. In the old days we got great at check processing and lowered the cost to pennies. Processing a transaction should be close to free (especially in a debit scenario.) I just paid 1.4% on Coinbase to transfer USD to ALGO. (They probably make something on the spread also.) But 3%+ on a card? One thing I did hear from some retailers is that the cards that provide lots of benefits and cash back charge more to cover the benefits. That money has to come from somewhere.
- missedthecue 5y ago
  Processing fees have to cover chargebacks. That's processing fees in some industries prone to chargebacks (adult for instance) are eye-wateringly high. 10% or more in many cases.
GoodJokes 5y ago
[dead]
seaourfreed 5y ago
Bitcoin Lightning Network fees are $0.02 per transaction. Yay for crypto disrupting legacy finance.
throwawaymanbot 5y ago
When a company knows it’s in a position like this it can charge whatever it wants. Should never be in this position.
ghoomketu 5y ago
Paypal's API is one of the biggest nightmare I have to deal with lately(1). As much as Paypal has sucked, at least it was super simple to integrate before: just set amount, freq, period, return url and ipn url and that was pretty much it and that's why even noobs loved PP and integrated it everywhere. The new API otoh, no it has to render button dynamically using Javascript, with some very confusing REST api, API keys and tokens and a sandbox mode and endpoints URLs which change frequently for no reason. Even the page down button does not work on the API age, just to give you an idea how bad this whole thing is. It's like the team who made the API and the sellers (the end-user) have never spoken once to each other. (1) https://developer.paypal.com/docs/api/overview/ https://developer.paypal.com/docs/api/overview/
- thedanbob 5y ago
  I'm glad I'm not the only one who thinks this! I inherited a site with PayPal and it uses just a single link that takes you to PayPal and returns you after the transaction. Plus an endpoint to handle IPN pushes. I've looked into updating to the current API but it's just so confusing and awful, it took me a couple of days just to understand the new workflow.
alisiddiq 5y ago
Paypal can die already, had a terrible experience as a seller. Never using them again for either buying or selling

337 points by kaslai 5y ago

shoto_io 5y ago

This is straight out of Peter Thiel's handbook. Create a monopoly and then take the profits.

fshbbdssbbgdd 5y ago
PayPal doesn’t seem like a monopoly. Merchants can offer multiple payment processors, and customers can use a different one for each purchase without any lock-in. PayPal has strong competitors like Stripe and even Apple. They also lost their flagship client, eBay.
- robryan 5y ago
  In some ways they are for consumer products. There is some percentage of people that won’t buy at all without the option. Then a much bigger percent that will still buy but prefer to use PayPal if you give the option.
  - another-dave 5y ago
    In fairness, I still wouldn't call that a monopoly, just a popular choice. I mean, I know some people who won't drink soft drinks unless it's specifically Coca-Cola and know a lot of people who'll pick Coke as their first choice but they clearly don't a monopoly on cola drinks.

chovybizzass 5y ago

now they are more expensive than credit cards, when I worked there in 2004-2007 their big deal was they were cheaper than credit cards.

kaslai 5y ago

I have seen absolutely zero coverage about this change so I wanted to make sure people knew about it. The change seems to have happened on August 2nd according to archive.org [1]. I checked my PayPal records to verify this was true and sure enough I've been paying the higher rate in fees starting after July. [1] https://web.archive.org/web/20210727095034/https://www.paypal.com/us/webapps/mpp/merchant-fees https://web.archive.org/web/20210727095034/https://www.paypa...

collectedparts 5y ago
They technically announced it [1], but I agree that it got next to no coverage. Presumably they deliberately "silently" put the announcement on their blog without circulating it to news outlets. HN discussion at the time [2]. [1] https://newsroom.paypal-corp.com/2021-06-18-Upcoming-Changes-for-Some-US-Businesses https://newsroom.paypal-corp.com/2021-06-18-Upcoming-Changes... [2] https://news.ycombinator.com/item?id=27560616 https://news.ycombinator.com/item?id=27560616
- kaslai 5y ago
  Ah, thank you for the links. I searched prior to posting but the title on [2] is very non-descript. I was expecting a lot more outrage considering the size of this hike is pretty massive for merchants that process a lot of smaller transactions.
- tristor 5y ago
  I have a merchant account with PayPal for my side business. I received an email notifying me of the change. I presume this is legally required for this sort of change to the terms.
PikachuEXE 5y ago
Thanks for your effort!

PaywallBuster 5y ago

I'm avoiding Paypal as much as possible. At this point it's basically the same as some other shitty wallet like skrill and loaded with fees for anything. 21 July 2021 Amount received 110,00 USD Fee 6,24 USD Total 103,76 USD

bserge 5y ago

Still the easiest way to start selling online, at least in Europe... They've got the low volume starter business niche by the balls.

fastball 5y ago
What about Shopify?
- ffritz 5y ago
  Apples and oranges.
  - mohanmcgeek 5y ago
    There's such a thing called Shopify Pay I think it's powered by stripe though.
exporectomy 5y ago
Yep. I investigated Stripe once but you had to use an API. Paypal is just copy and paste code into your HTML page.
- a_imho 5y ago
  Also Stripe is not supported in many countries.
mrweasel 5y ago
Maybe it has improved in the last six years, but setting up PayPal for an eCommerce site was an absolute nightmare. It could only be done by the CEO of the company, legally, and you needed a PayPal representative on the phone, guiding you through setting up the account correctly. Just sign up for a regular payment processor, if you're in Scandinavia. The larger ones will also support iDEAL, SoFORT and other local options and help you get started with those.
jokethrowaway 5y ago

londons_explore 5y ago

It amazes me that despite not really modifying the core PayPal service for 10+ years, they are still a market leader. Parts of their business don't have much network effect, and competitors could totally rebuild the tech and eat away at the market share... Yet somehow that hasn't happened.

brnt 5y ago
All this, and all that other Silicon Valley financial infra, because direct bank tranfers are (presumably?) not known or difficult or impossible. From my northwestern European perspective, it's weird this straightforward solution that we've had since, well, the fifties? is overlooked.
- ajkdhcb2 5y ago
  Fraud. Hacked bank accounts. Chargebacks. The brutality of banking customer service. These are all good reasons. PayPal does have a dispute system for 'buyer/seller protection'.
  - brnt 5y ago
    You can only transfer to a number, you can't (easily) charge back already effectuated transfer, nor can you (with a consumer account) debit a number. All of these things are covered. Buyer protection has rarely been something one needs. Some (many nowadays?) banks offer insurance for this.
    - ajkdhcb2 5y ago
      >Buyer protection has rarely been something one needs. I disagree, I think it is the biggest factor. I used it several times and I know other people who have too. >you can't (easily) charge back already effectuated transfer I promise if you try to do something involving bank transfers without doing some form of 'Know Your Customer' you'll get people try to use bank accounts that are compromised in some way. You'll be getting calls from your bank and potentially lose money, and may get your bank account closed if you persist with that behavior

dessant 5y ago

PayPal is awful for small transactions, I regularily get donations for my projects that are literally 0 USD, because all of it is eaten away by PayPal fees, and even for a 5 USD donation you end up losing around 15% of the transaction amount. Do you know of any other service that is suitable for microtransactions, besides cryptocurrencies?

tpxl 5y ago
As far as donations go, Patreon and Ko-fi should have a lot lower fees.
- sebazzz 5y ago
  Patreon is not necessarily an alternative because supporting someone is more of a subscription kind of transaction, and not a one-off thing.
  - freemint 5y ago
    It also isn't alternative because it makes one-to-many transactions which can offer lower fees than one-to-one transaction due to pooling
pkulak 5y ago
You say no crypto, but Nano was built for exactly this. You're not gonna beat zero fees.
- arcticbull 5y ago
  Except it exhibits absolutely monstrous volatility. [edit] That's a lot like saying you can't beat the "$0 commission" at the airport currency exchange - true, but misleading. They wreck you elsewhere (in that case, in exchange rates). The truth is if Nano were "just as good" as sending dollars back and forth except free everyone would be using it. The fact they're not, this many years in, means you're missing something in your analysis.

Urgo 5y ago

This was actually announced in a easy to miss email with the subject "Upcoming change to your account" sent on June 30 2021. It did get a little press that day but on the fee increase day I saw little reporting. These changes went into effect on August 2nd 2021. Here is a PDF that has a breakdown showing all the changes that happened that day [1] To PayPal's credit, this was their first rate increase in a very long time if not forever. That said this is a huge new fee for merchants while not providing any new services, at least at this time, to justify it. [1] https://www.paypalobjects.com/marketing/ua/pdf/US/en/feepages-080221.pdf https://www.paypalobjects.com/marketing/ua/pdf/US/en/feepage...

kaslai 5y ago
Yeah I definitely missed it and it caught me by total surprise today. I imagine many are in the same boat. This also comes after they've adjusted their policy so that they keep all fees even after a payment has been refunded. They're getting less and less attractive every month.
- Urgo 5y ago
  Keeping the fees on refunds bugs me so much as well and is completely out of line. Sadly everyone seems to do this now. We haven't gone live with it yet, but following this change I actually went comparison shopping a little. I'm planning on swapping my payment processing over to Braintree.. which is still paypal.. but actually does have less fees. It has the benefit of still being able to accept paypal payments (at the paypal fee rate) but lower fees for credit card transactions.
  - yarcob 5y ago
    The last time I went comparison shopping I figured Wirecard was a good deal. I even got a quote from them and planned to switch to them. But I was a lazy procrastinator, so I did nothing for a couple of months, and then all of the sudden I read about them on the news...
muixoozie 5y ago
Is this in anyway related to EBay cutting them out and passing their savings to themselves?

7demons 5y ago

PayPal is going cPanel route. It should be replaced and never look back. Those, who can't control their greed are doomed to see the void of ignorance.

zatkin 5y ago
Can you elaborate on what you mean by “cPanel route”?
- MangoCoffee 5y ago
  i assumed he is talking about the control panel (cPanel) for webhosting. https://www.webhostingtalk.com/showthread.php?t=1770316 https://www.webhostingtalk.com/showthread.php?t=1770316

systemvoltage 5y ago

I run a SMB with $1.2M in transactions per year through various online storefronts. Paypal/Stripe are the most common forms of payment, but to my surprise the split is 70%(Paypal), 30%(Stripe including Apple/GPay/Alipay). We see a consistent behavior that perhaps incidates Paypal is far easier to use than Stripe. I feel like the slightest friction in the choice between payment options and it will win. Paypal offers the easiest way to pay, perhaps even easier than Apple Pay. It is one click on the popup window. With Apple Pay, you gotta double click this awkward button on the side, then Face ID that doesn't work with the mask, followed by entering the PIN - the whole thing takes too long. It also doesn't work on most browsers and desktop computers (perhaps Apple Pay works on macOS with Safari). I thought about this a lot and tried to go through the details of the friction that leads to better conversion. Stripe has a better developer experience but it doesn't help the customer. Stripe desparately needs a customer-facing account that can manage cards and payment methods. If it were my guess, Stripe is already working on this.

fredophile 5y ago
As a customer there are a few reasons I might prefer PayPal. First, they have my credit card info and shipping address already. Using their checkout means I don't need to fill all that info in. I may not trust some random website I only plan to buy from once with my credit card info. There are times when I can get money back from PayPal purchases on some of my credit cards. Right now I can get 5% back on one of them until the end of December. That means if paypal is an option I'm going to us it.
the__alchemist 5y ago
I've noticed the same. If you have CCs stored in the browser, I find the Stripe flow easier on my website, and it loads very fast, while the PayPal widget is the slowest-loading part of the website. I see about a 70/30 percent split, as you do, for Paypal/Stripe.
retrobox 5y ago
I wonder if PayPal’s consumer protection is also part of the appeal? I had to use the dispute resolution once. The merchant become unresponsive to all other means. PayPal ruled in my favour and provided a refund. I’m not sure a credit card chargeback would have been as simple.

sdrinf 5y ago

Has anyone ran a recent A/B test for Stripe direct CC-based checkout + paypal vs Stripe only in the context of B2C subscriptions? Last time I've checked circa 2014-2015, there was consumer trust in Paypal (for cancellation/etc), and so having that option added ~+10% conversion rate (or so), but would appreciate more recent data, thank you!

exporectomy 5y ago
No but I bet some people are turned away because of Paypal. I use it and customers occasionally inquire "Do you accept credit cards because we don't have a Paypal account?". It's aggravating that they make the credit card option hard to find compared to the shitty Paypal account login.
- foreigner 5y ago
  I am one of those people that is put off by PayPal.
WA 5y ago
German userbase, B2C, I offer PayPal, Stripe and SEPA wire transfer: 70-75% PayPal 15-20% Stripe 7-9% SEPA wire transfer
herbst 5y ago
I am kinda forced to accept PayPal because credit card adoption is not as big in the German speaking area of Europe. Especially the younger audience often only has PayPal. I have no exact numbers but like 70% of orders I get from Germany are paid with PayPal. When I added PayPal to a SaaS of mine a few years ago only like 3% even used it.

bradwood 5y ago

Time to put all this on crypto rails and disrupt these bastards out of existence.

kevingadd 5y ago
Will that work particularly well since PayPal also adopted crypto? They have the money and resources to out-maneuver any weaker attempts at using crypto to displace them.
- hirako2000 5y ago
  Yes because it's PayPal again in the middle with whatever fees they wish to apply. On crypto. The difference between crypto and cash is that the bank can refuse a cash transaction, from either end, and through. With crypto the network accepts the transactions with no recourse to block it, reverse it, or impose their view on how money should circulate.
- imtringued 5y ago
  I assume that Lightning Network will devolve into federated payment infrastructure rather than something that is fully decentralized. It would be closer to email where providers share a protocol and interoperate by default with each other. In that sense, Paypal wouldn't compete vs crypto but with dozens of payment companies.
ptudan 5y ago
That's exactly what Flexa https://flexa.network/ https://flexa.network/ is doing (I just got hired there)

nikolay 5y ago

Time to leave, I guess!

dr_dshiv 5y ago

When I moved to the Netherlands, I was at first irritated that my credit cards weren't accepted anywhere. But as the debit (maestro) card transactions are often free [1], paying 3%+ to a card service does seem exorbitant. For online payments, the Dutch use the IDEAL system, which is even easier than online credit cards. This also prevents vendor lock-in, like Amazon. And, the banking apps make it super easy to send money to friends. Looking back, I have to imagine that this 3%+ tax on all American transactions must put a weight on the system. [1] https://www.ing.nl/media/ING-rates_for_business_transaction_services_uk_tcm162-135848.pdf https://www.ing.nl/media/ING-rates_for_business_transaction_...

Scoundreller 5y ago
Even better, many PayPal payments are from PayPal funds, Checking acct debits or EU/AU/NZ cardholders with capped charges, so PayPal pays 0% or under 1% to visa/MC for those transactions, but charges the same 3%+ to vendors. Plus additional charges for cross-border payments (even if there’s no forex) and terrible rates for forex which they probably self-settle anyway.
- danlugo92 5y ago
  They can afford to do this because "it just works"(r)(tm).
cm2187 5y ago
Everything is not so much more expensive in the US, not the least because this is dwarfed by the difference in VAT. Not that I am in any way in favour of the current duopoly in credit card payments.
- axelthegerman 5y ago
  It's not about more or less expensive or higher/lower VAT. It's about whether or not we should pay a 3+% cut to the payment processor when there are clearly other options. Nothing in this world is free, question is who pays for it and how much. Of course US credit card transaction fees also fund cashback and other reward systems

qecez 5y ago

Meanwhile, accepting Bitcoin Lightning Network payments is free of charge. Can't wait for more adoption.

imtringued 5y ago
I dislike Bitcoin but Lightning Network is effectively a decentralized Paypal. Assuming it works, it should have a very easy time competing against these excessive fees.

konschubert 5y ago

Paypal is a pretty scammy service also on the consumer side. When paying in foreign currency, they try to trick users into using their "conversion" service, which helpfully charges a bit more money to your credit card than you would have paid without their "assistance".

xdfgh1112 5y ago
A very common trap when using your credit card abroad too. If you don't insist on being charged in the local currency the payment processor may "convert" it for you with a worse rate and pocket the difference.
- MaKey 5y ago
  I wish there was some kind of regulation against this.
MilaM 5y ago
Totally agree. I feel scammed every time I have to change the currency during the payment process. Some time ago, I don't remeber when they changed it, you used to be able to opt-ou of currency exchange permanently per credit card. It was a very well hidden setting and I had to google the deep link every time to find it. Nowadays you have to explicitly disable it for each and every transaction. I'm pretty sure though that most PayPal customers have no clue about this practice or just don't care.

tofukid 5y ago

I still use PayPal because it has the best global coverage and least friction for consumers. Their new checkout form also seamlessly accepts credit/debit cards and does subscriptions. Many of my customers are in countries that aren’t supported by Stripe, so it’s not much of a choice from a business perspective.

mrweasel 5y ago
Do you just use PayPal to accept credit/debits cards? Because there are alternatives to Stripe. They aren't as well made, but they do exist. For me, if I go to a site, that only accepts PayPal, then I'm won't be buying anything. I honestly don't trust PayPal, at all. If it's PayPal only, I assume it's fraud.
- tofukid 5y ago
  I accept PayPal and credit/debit cards, using “PayPal Checkout”. Go to https://LuckyResumeMaker.com https://LuckyResumeMaker.com and click “Download PDF” to see what PayPal checkout looks like. Most customers pay with PayPal, but the credit/debit card option is seamless with PayPal. I think it’s even better than Stripe since it doesn’t always take someone to another page.
herbst 5y ago
The reason I use PayPal is because it doesn't trigger the credit card SMS confirmation that is enforced in europe and I don't have a phone number to receive them.

damsta 5y ago

PayPal is awful and I am not talking about the fee. The developer experience is so disgusting. Their developer portal is completely useless, it does not show any data. They have 5 different documentation pages about one thing, each one is more outdated than the other. If you want to onboard merchants on your platform you will have no way of seeing the connected accounts. Their button that you can integrate on your website is super heavy, it wastes so much data just to show the div, do not try to click on it if you do not want to lose a few megs of data.

simonsarris 5y ago
You also get rate-limited in the sandbox just for clicking around too fast. WTF is the point of a sandbox!?

tjpnz 5y ago

Tried to send some money using a long dormant account, after logging in and updating my password some automated process kicked in and froze my account. Never bothered to do anything about it because there are now more dependable and hassle free options. I was relieved to not have anything in my account. I'm even more relieved I'll never have to use their product again.

petercooper 5y ago

It's even more fun if you operate cross border because on top of all the usual fees there's a cross border fee (of 2% if the buyer was in the US) and then a markup on currency conversion of 3.75%. We used to put a lot through PayPal's merchant system but are now almost entirely on Stripe due to this non-stop nickel and diming.

wslh 5y ago

Brazil implemented a neutral QR with direct payments which been there are basically no fees if you use this system: https://news.ycombinator.com/item?id=28757537 https://news.ycombinator.com/item?id=28757537 It is incredible how, very few times, developed countries can directly build a new infrastructure that beat the infrastructure of most developed countries.

The_rationalist 5y ago

What was the previous fee?

lvl100 5y ago

Paypal is a classic rent seeker. Nearly two years into pandemic, they still refuse to hire people for live customer service. Despite record profit. If anyone is looking for a startup idea: an online payment platform that charges on outbound bank transfers only. Heck charge 5% fee. And let all transactions be completely free.

razakel 5y ago
That exists - wise.com.
- lvl100 5y ago
  I don’t think so.
toomuchtodo 5y ago
Are you aware that the US Federal Reserve is deploying instant payments infrastructure in 2023? I believe the cost will be free to consumers, and pennies per transaction to businesses. I'd expect online payments will integrate with banking providers to support initiating instant payments from deposit accounts, similar to Europe's IBAN instant payment system. https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa... https://www.federalreserve.gov/paymentsystems/fednow_about.htm https://www.federalreserve.gov/paymentsystems/fednow_about.h... https://news.ycombinator.com/item?id=28393576 https://news.ycombinator.com/item?id=28393576 (a comment I previously wrote on this topic)
- lvl100 5y ago
  I am aware of the Fed solution. I can tell you it’s DOA and by design.
  - toomuchtodo 5y ago
    Would love to hear more, as I know a stakeholder involved in beta testing and that's not the ground truth I'm hearing (working as expected, deployment ahead of schedule). Don't violate any NDAs of course.

lmilcin 5y ago

I have worked for an acquirer side of the business where I implemented the credit card application but also took part in complete certification process and day to day business. For a normal credit card transaction, most of the fee goes to the bank issuer of the card. This is banks' major source of income nowadays (aside people who don't pay off their credit card on time). This means that most acquiring business -- the companies like Visa, Mastercard and actual acquirers that maintain the infrastructure -- get very small part of that pie but it is still very worth their time. I don't know what kind of deal PayPal has but 3% suggests their cut is order of magnitude more than any traditional acquirer, but without hassle of maintaining EPOS terminal infrastructure. And that half a dollar is damaging to micro transactions. Technology was supposed to make it easier to pay for small things, individually. Half a dollar cannot be explained even if each transaction was processed manually.

anyfactor 5y ago

I despise Paypal. But you don't have a way to sell except for Paypal. I prefer moneygram with Visa Direct but it takes ages for the transaction to complete and often times you have to call the customer service for that. I am trying to switch to wise but it is difficult to convince clients moneygram and wise is worth the hassle.

erikrothoff 5y ago

And they charge a 5% currency conversion fee for moving money from your account. Even moving USD to another USD account they charge 3% ”fee” for doing nothing.

christrowe 5y ago

This is insane; the fee is too much, especially for domestic transactions. Also, the conversion rate is too much, especially if the money is coming from the foreign market.

nathan_gold 5y ago

It’s ok, more competitors will come in now

candyman 5y ago

I presume the US banking industry pays lots to lobby and makes big campaign donations, gives senators offspring jobs, etc. In the old days we got great at check processing and lowered the cost to pennies. Processing a transaction should be close to free (especially in a debit scenario.) I just paid 1.4% on Coinbase to transfer USD to ALGO. (They probably make something on the spread also.) But 3%+ on a card? One thing I did hear from some retailers is that the cards that provide lots of benefits and cash back charge more to cover the benefits. That money has to come from somewhere.

missedthecue 5y ago
Processing fees have to cover chargebacks. That's processing fees in some industries prone to chargebacks (adult for instance) are eye-wateringly high. 10% or more in many cases.

GoodJokes 5y ago

[dead]

seaourfreed 5y ago

Bitcoin Lightning Network fees are $0.02 per transaction. Yay for crypto disrupting legacy finance.

throwawaymanbot 5y ago

When a company knows it’s in a position like this it can charge whatever it wants. Should never be in this position.

ghoomketu 5y ago

Paypal's API is one of the biggest nightmare I have to deal with lately(1). As much as Paypal has sucked, at least it was super simple to integrate before: just set amount, freq, period, return url and ipn url and that was pretty much it and that's why even noobs loved PP and integrated it everywhere. The new API otoh, no it has to render button dynamically using Javascript, with some very confusing REST api, API keys and tokens and a sandbox mode and endpoints URLs which change frequently for no reason. Even the page down button does not work on the API age, just to give you an idea how bad this whole thing is. It's like the team who made the API and the sellers (the end-user) have never spoken once to each other. (1) https://developer.paypal.com/docs/api/overview/ https://developer.paypal.com/docs/api/overview/

thedanbob 5y ago
I'm glad I'm not the only one who thinks this! I inherited a site with PayPal and it uses just a single link that takes you to PayPal and returns you after the transaction. Plus an endpoint to handle IPN pushes. I've looked into updating to the current API but it's just so confusing and awful, it took me a couple of days just to understand the new workflow.

alisiddiq 5y ago

Paypal can die already, had a terrible experience as a seller. Never using them again for either buying or selling