PayPal Raises Fees For Most Domestic Transaction Types To 3.49% + $0.49 - Hacker News

PayPal raises fees for most domestic transaction types to 3.49% + $0.49 ... https://news.ycombinator.com/item?
id=28755702
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PayPal raises fees for most domestic transaction types to 3.49% + $0.49 (paypal.com)
219 points by kaslai 8 hours ago | hide | past | favorite | 168 comments
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dr_dshiv 5 hours 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_...
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Reason077 4 hours ago [–]
Merchant fees for both debit and credit cards are significantly lower in all EU countries (and UK), compared to the US,
thanks to the interchange fee regulation (IFR) that caps interchange fees at 0.2% for debit card and 0.3% for credit
cards.
This translates into much lower merchant fees. Even a tiny startup with zero transaction volume can easily get less
than 2% on their physical card transactions (using something like iZettle or SumUp). Big retailers will be paying well
under 1%.
Also, merchants are banned from adding surcharges for debit and credit card transactions in the EU & UK.
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c12 3 hours ago [–]
Due to Brexit merchant fees in the UK are no longer capped.

Visa for example, plan to increase the interchange fee on digital payments made between European customers
and British businesses from 0.3% to 1.5%. Other providers will surely follow.
Still lower fees than in the states but probably not for long.
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Reason077 1 hour ago [–]
> "Due to Brexit merchant fees in the UK are no longer capped."

No, they are absolutely still capped in the UK. The IFR regulation has been mirrored in the UK so the
same caps still apply to UK cards and UK banks.
The exception you are referring to is when a UK card is used for an online ("card not present")
transaction at an EU merchant. In this case it is now considered an inter-regional transaction and a
higher cap applies: 1.15% for debit and 1.5% for credit cards. (but note, even here there is still a cap!)
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HappySweeney 15 minutes ago [–]
Canada also banned said fees, and retailers with high-priced/low-margin goods (ie: computers) simply gave
cash discounts to compensate. nb my info is at least 20 years out-of-date, though.
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stephen_g 4 hours ago [–]
Interesting. In Australia you can charge a surcharge, but only what the interchange fee cost you. So airlines
1 of 18 10/5/21, 3:25 PM
PayPal raises fees for most domestic transaction types to 3.49% + $0.49 ... https://news.ycombinator.com/item?id=28755702
especially used to charge large fees, like $12 or something, and now can only charge a few dollars.
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nicoburns 3 hours ago [–]
Before this law in the UK it was mostly small businesses (e.g. local independent grocery stores) charging
50p per transaction. I think the law was probably to encourage uptake of contactless payments which are
targeted at these small transactions.
It's still legal here to have a minimum transaction value for paying with card, which some businesses
use. But since the pandemic it's become more common to find businesses that don't accept cash than the
other way around.
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TheOtherHobbes 1 hour ago [–]
I occasionally had disagreements with shop owners because I didn't have cash and I wanted them
to add the payment fee manually so I could pay by card and actually - you know - buy stuff.
A lot simply wouldn't - like I was attempting fraud or something.
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rendaw 2 hours ago [–]
How do the IFR caps work with small transactions? Like < 1 EUR? Maybe I should move to Europe.
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Scoundreller 4 hours ago [–]
Even better, many PayPal payments are from PayPal funds, Checking acct debits or EU/AU/NZ cardholders with
capped charges, so PayPal pays 0% or under 1% to visa/MC for those transactions, but charges the same 3%+ to
vendors. Plus additional charges for cross-border payments (even if there’s no forex) and terrible rates for forex which
they probably self-settle anyway.
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kolinko 5 hours ago [–]
Yeah, in Poland it’s similar. Since ~2001 we’ve had wire transfers that take up to a few hours to arrive (or instant) and
cost 0-0.25$ to send, regardless of the amount. It made PayPal or Venmo kind of pointless over here.
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Reason077 4 hours ago [–]
People use PayPal, Venmo, Revolut, etc mostly for convenience. You just need a phone number or email to send
a payment, compared to a bank/wire transfer where you first need to obtain the account number you’re sending
to.
All of these services (including PayPal) charge no fees for personal payments. Just to merchants for commercial
transactions, which often come with buyer protection, free credit/payment plans for the buyer, etc.
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dr_dshiv 4 hours ago [–]
My bank app, ING, lets me send a payment request link as a text, via whatsapp, etc. Which is a nice way
of not needing account numbers to send money.
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stephen_g 4 hours ago [–]
Yeah, the banking regulator and the banking industry alliance added that as a feature with the New
Payments Platform in Australia. You register a ‘PayID’ with your bank (can be a phone number, email
address, company number etc.) and then you just share that with people to do free real-time transfers
(between basically any Australian banks).
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jokethrowaway 4 hours ago [–]
PayPal is used because of customer protection.

Revolut is used because they hide their low forex exchange fees (despite their claims of nearly no fees,
you'll find cheaper transfers elsewhere).
Venmo may be convenient in the States. I've never seen anyone in Europe using it. Banks have some
system to send money to a phone number, though, which serves the same purpose.
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2 of 18 10/5/21, 3:25 PM
danieldisu 4 hours ago [–]
One of the key features of these apps is that you only need the phone in order to make transfers, that allows
you to avoid asking for the account number to anyone.
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oneplane 4 hours ago [–]
On the other hand, account numbers are not a significant 'secret' or something like that. They are just as
'safe' to share as phone numbers.
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fragmede 35 minutes ago [–]
For anyone in the US, if I have your bank account number, I can steal your money. I strongly
advise you not to share your account number with me or anyone else. I have to commit fraud in
order to steal your money, making it a crime, but stealing's a crime in the first place, so that's not
going to deter thieves.
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ethbr0 8 minutes ago [–]
Think about it this way: a check is just an account number on some fancy paper, with a few more
numbers.
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Up to a point. They may be used to create direct debit subscriptions (you just need account details
and name), which can be annoying.
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tinus_hn 4 hours ago [–]
The problem with iDeal is that there is 0 consumer protection. If you pay for an order using a credit card and it’s a
scam, you do a chargeback. If you pay for an order using iDeal and it’s a scam, the money is gone the moment you
pay. There is no way to get the money back.
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semi-extrinsic 4 hours ago [–]
I love how Americans are totally fine with paying a tax on every transaction they make in order to protect
random people from occurrences of financial fraud, yet are vehemently opposed to exactly the same system for
healthcare.
I mean, rationally you would expect the opposite: people typically don't do $10k+ transactions using credit
cards, so a worst case consequence of fraud you're not protected from is quite small.
But for medical emergencies, the worst case cost is orders of magnitude larger, so a system that protects
everyone (financially) is much more beneficial.
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patentatt 4 hours ago [–]
Oh, you’re giving us Americans too much credit, credit card fraud happens all the time. It’s like a
constant thing you have to watch out for, and I’d estimate happens once every couple of years for most
people. Either straight up fraud and theft, or just a recurring charge that will not stop no matter what. So
the system is super broken and relevant to individuals, which is why people accept all the fees maybe.
It’s not a sign that Americans are ok with a communal approach to anything, we’re just as selfish as
always with this one. Sometimes it does feel like a third world country.
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Grimm665 31 minutes ago [–]
This seems overblown, I've had credit cards for over ten years in the US, using them in person and
online, and the only time I've ever had a fraudulent transaction was an hour after my wallet was
stolen, which like yeah, kind of expected.
I'm not sure what you mean by "happens once every couple of years for most people."
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smaryjerry 3 minutes ago [–]
Your personal experience is not statistically relevant data. It is a major problem here in the
US, not just fraudulent transactions, but people signing up for credit cards in your name
3 of 18 10/5/21, 3:25 PM
since the equifax data leak, people creating fake ids to be used to reset your accounts in
person, constant phone calls attempting to scam people, and even letters in the mail
withhuge print saying “last notice - important - pay now” with very small print saying “this
is an offer not an invoice” or like that tricks the elderly and those not careful. All of these
and more cause massive amounts of fraud in the US.
throwaway473825 2 hours ago [–]
Note that high fees aren't a prerequisite for consumer protection. European credit cards offer full
protection, despite having capped interchange fees.
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op00to 1 hour ago [–]
Do they? Can I get an immediate refund for anything if I don’t like the item? I can with my Amex.
No questions asked under $1000.
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nomercy400 10 minutes ago [–]
From what I understand amex is different from Mastercard or visa in Europe. The European
limit on fees does not count for amex, or the fees are much higher. I'm not sure exactly.
This usually means support for amex is lower than Mastercard or visa.
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crtasm 54 minutes ago [–]
That doesn't sound like a feature I'd want to pay fees towards enabling but I'm likely
missing something - what kind of up-to-$1000 purchases are you making where you might
not even like the item?
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op00to 1 hour ago [–]
This is so far off topic, but just like Americans are guilty of seeing the rest of the world as a homogenous
entity, you are making a huge miscalculation on what “Americans” want.
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Americans really don't have a choice, the merchants are making the rules and offering a service.
Anyway Americans pay pretty high taxes, they're comparable to Europe (albeit not as high as crazy
countries like Italy, Spain or France, I have no idea how those countries can even survive). I'm sure
they'd be more than happy if the government were spending less and letting them to pay less taxes and
buy a private insurance instead.
The problem with the US healthcare and higher education is not being private, it's being too expensive -
tldr thanks to government intervention some actors got away with massively raising prices with no
competition
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the-dude 2 hours ago [–]
Have you ever done a chargeback in NL? Which card? Which bank? What kind of proof was required?
ICS requires you to snailmail them printouts of your purchase etc. within a small time window.
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Sander_Marechal 3 hours ago [–]
Yes there is, talk to your bank. Consumer protection is way better in the EU. I use the same Dutch bank that
the OP uses (ING) and I can revert many transactions from right inside the app.
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tinus_hn 3 hours ago [–]
You can revert automatic transactions (as these are unauthorized and can be done by parties that know
just your account number) but it is impossible to revert iDeal payments.
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apexalpha 0 minutes ago [–]
This isn't true. There is a delay between the iDeal transaction and the money being transferred. If
you call your bank immediately, like my mum after being scammed, they can revert it.
4 of 18 10/5/21, 3:25 PM
krageon 2 hours ago [–]
> as these are unauthorized

It is mandatory to request authorization, but the banks do not have a way to verify that outside of
a little flag that says "yes I definitely asked".
https://gocardless.com/guides/sepa/mandates/
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arnvald 4 hours ago [–]
I like that, too. The only thing that bothers me is that Maestro cards can't be used for online payments, so if I buy
something from other countries (where shops don't support iDeal) I still need to use credit card, and support for credit
cards in NL is pretty bad.
Btw these high transaction fees are the reason why loyalty programs are so good in US while so bad in EU. EU caps
credit card fees at around 1.5%, while in US it's much higher, so basically banks give people part of the fee in form of
loyalty points
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> Maestro cards can't be used for online payments

They can, for example ~15 years ago I used a maestro card to pay for a subscription to Sony. All they needed
was a card number and an address (the latter for tax reasons, that is mandatory).
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yarcob 2 hours ago [–]
In Austria banks switched from Maestro to Mastercard Debit to make online payments easier.
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scrollaway 4 hours ago [–]
I like iDEAL. My bank is dutch (bunq) although i live in Belgium, i got to use it a few times.
I don't know if it's really easier than cards though given all the tools that are available for cards now, from auto fill to
contactless.
To be honest, google pay / apple pay are just so damn convenient. Being able to just hold my phone and have
payment happen in a second is fantastic. And here in Europe let's not forget visa and mc fees are capped at something
like .7%.
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the-dude 5 hours ago [–]
Just to add : iDeal is a flat fee, starting at about € 0,29 AFAIK. Depends on your contract.
edit : according to the document, ING charges € 0,25.
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herbst 2 hours ago [–]
Switzerland has a system called Twint. It exists as prepaid account or attached to one of the most popular Swiss bank
accounts. Transactions are free (for end users) and instant, you can even chat with emojis under the transaction.
You can start accepting Twint without any hurdles. Or use a merchant gateway and pay like 0.3% or so.
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twoslide 5 hours ago [–]
It's a bit of a stretch to equate Paypal with "all American transactions." There are of course Visa/Mastercard (variable
but about 2%), debit cards, Venmo, and older bank transfer technologies (ACH).
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harry8 5 hours ago [–]
A service that costs a fraction of a cent to perform but charges tax on total revenue plus a big old fee has a big
barrier to entry or it has zero customers tomrrow.
"all american transactions" - who cares what proportion it is? It's the most vulgar display of market power
imaginable. "We will tax this large chunk of the economy." And I'm not even seeing anyone saying they won't
get away with it.
It's really quite astounding!
5 of 18 10/5/21, 3:25 PM
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dmantis 2 hours ago [–]
There is already Bitcoin with basically free Lightning Network transactions, so it's more like people vote
with their wallets that they prefer (at least for now) paying this 3% tax instead of few bucks per year for
channels opening/closing. And it works in the same internet market (real life and cards is a bit more
complicated because of existing payment infrastructure).
So nobody force Americans to pay, actually, they do that voluntarily.
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twoslide 3 hours ago [–]
Would you propose a national price cap on transaction charges? It would be hard to justify intervening in
this way, given that there is plenty of competition and rates are not very different. Any transaction (even
cash) has associated costs.
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throwaway473825 3 hours ago [–]
I'm yet to find a European that complains about the EU's caps on interchange fees for debit and
credit cards. Is a regulation like this unfathomable for most Americans?
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Folks in the US are so used to corporations stepping on them a balanced discussion about
this (where both parties agree that you being exploited is not okay, but maybe disagree on
the solution) is no longer possible.
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cm2187 5 hours 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.
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axelthegerman 5 hours 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
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Symbiote 5 hours ago [–]
UK credit card transactions also used to fund cashback and rewards, but when EU rules from a few years
ago limited the fees all that ended. Society no longer funds rich/middle-income people's air miles, which
is an improvement.
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speleding 3 hours ago [–]
One fee that Dutch banks have, and PayPal does not, is negative interest on your balance over €100K. So as a small
business owner I park excess cash there, which makes up a little bit for the high fees when customers choose PayPal.
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AniseAbyss 4 hours ago [–]
Dutch banks, unlike their American sisters, are not archaic. iDeal was a direct response to e-commerce and a
preemptive strike against Visacard.
The Dutch banks all work together to prevent a US fintech takeover which they saw coming.
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alisiddiq 2 minutes ago [–]
Paypal can die already, had a terrible experience as a seller. Never using them again for either buying or selling
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6 of 18 10/5/21, 3:25 PM
kaslai 8 hours 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.paypa...
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collectedparts 7 hours 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... [2] https://news.ycombinator.com
/item?id=27560616
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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.
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PikachuEXE 7 hours ago [–]
Thanks for your effort!

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Urgo 7 hours 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/feepage...
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konschubert 5 hours ago [–]
> To PayPal's credit, this was their first rate increase in a very long time if not forever.
There is no reason to assume that rates should go up at all, it's not like the % you take needs to be corrected for
inflation.
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mchusma 34 minutes ago [–]
The opposite in fact. All costs should decline over time.

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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.
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Urgo 6 hours 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.
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7 of 18 10/5/21, 3:25 PM
yarcob 1 hour 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...
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muixoozie 6 hours ago [–]
Is this in anyway related to EBay cutting them out and passing their savings to themselves?
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nine_k 6 hours ago [–]
I blame the increased cost of compliance.

And also the fact that they are one of the few established and widely accepted payment / transfer systems, so their
customers aren't going to flee in droves.
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Bombthecat 6 hours ago [–]
I'm not sure if you can blame compliance for that. PayPal is back since a very very long time already...
And its getting bigger and bigger by the day, so it should scale. Not increase cost..
I'm pretty sure they do it:
A) for the stock
B) because they are a monopol (almost)
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jiggunjer 3 hours ago [–]
Monopoly in what? I've never used paypall in any physical or online payment.
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It's the prisoner's dilemma. Merchants using PayPal can't charge more on PayPal transactions so
they increase the price of all their items for all customers. For card transactions they pocket the
extra profit and likely then use it to pay PayPal fees and refunds. A similar mechanism happens for
credit card chargebacks.
All customers pay for this feature.
When given the choice between credit card or PayPal, customers can get PayPal protection or not
for the same price. If they use PayPal they perpetuate the story that people prefer PayPal and
contribute to generally higher prices to account for PayPal refunds, mostly damaging themselves in
the long run (given we already have laws in place that force merchants to refund / return items
and most merchants are not scammers) and benefitting PayPal.
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kristopolous 6 hours ago [–]
Or it could be just simple profit and the second thing you mentioned.
There's a narrative where companies are painted as regretfully rather than opportunistically raising prices,
maybe they just want to make more money. That's kinda the point of the system after all
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zerocount 5 hours ago [–]
I blame all the sellers using PayPal's services but not wanting to pay the fees. <RANT>I pay a 3% fee to
purchase with my debit card, so sellers need to pay up as well. I'm sick of sellers wanting me to use F&F or
cover their PayPal fees. If you have a business that accepts payment through PayPal, or any other payment
service, pay the fees!</RANT>
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dessant 7 hours 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?
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8 of 18 10/5/21, 3:25 PM
saurik 6 hours ago [–]
I don't know if they support it for accounts that are receiving contributions instead of payments (and I have no clue
what is going on now with this new change today: I need to research this), but PayPal has also offered a
"micropayments" tier that costs 5%+$0.05 instead of the 2.9%+$0.30, which is much better for small transactions.
You had to activate it with customer support, though.
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runeks 6 hours ago [–]
> You had to activate it with customer support, though.

I wonder why that is. Are they offering this service at a loss? If not, why not offer it to everyone automatically?
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addicted 3 minutes ago [–]
The answer is obvious. They want people to pay the higher amount, and this gives them a way to pacify
anyone who complains.
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kube-system 5 hours ago [–]
I figure most people make transactions over ~$12, which would cost more in fees at the 5% + 0.05 rate.
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Yeah, but so what was always annoying about it is that they don't just automatically give you the
better rate on transactions where it makes sense, considering that they explicitly would suggest
you create multiple accounts--one with micropayments set and one without--and split your
payments between them depending on which would be better. I guess maybe the bulk fee rate
threshold would then be separate? Amazon Flexible Payments (which was amazing but was killed
with no migration path and for a shitty expensive replacement) just did it all automatically for you
to give you good rates (and even had fee tiers for tiny transactions down to I think even less than
a penny, if you were working with an internal balance transfer and not an external payment like a
credit card).
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Semaphor 6 hours ago [–]
Is that actually mentioned anywhere, publically? We use it and as it’s account-wide, we always calculate which
account we have to use to minimize fees.
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Dylan16807 6 hours ago [–]
https://www.paypal.com/us/webapps/mpp/merchant-fees#statemen...
https://www.paypal.com/gf/smarthelp/article/how-can-i-update...
The first page says it's 5% + 0.09 now, though.
Edit: Oh, fixed the first link, the page was using javascript to break anchor links for some reason.
Also that second page only exists on some versions of the site.
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I am not 100% sure I am doing the math correctly, but I think--with the other changes today to
the normal pricing--that means the boundary at which you should use this pricing tier has moved
from ~$12 to ~$29?!
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Dylan16807 4 hours ago [–]
Something like that. $27 if it's 9 cents now. The 25 cent gap has grown to 40, and the 2.1%
rate difference has shrunk to 1.5%
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Semaphor 3 hours ago [–]
Interesting, that section in the first link is missing in the German version of the document.
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9 of 18 10/5/21, 3:25 PM
I doubt it’s a common thing, but if I can send cash in the mail, I just do that. I always have extra stamps and cash is
king. Can be zero paperwork for the recipient if they just pocket it (ok by me when it’s a solo project).
Sometimes works out really well if I have spare US$ or EUR sitting around (I’m in Canada).
Maybe some donations get lost or stolen, but zero-fees makes it a net benefit in my mind.
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Geee 1 hour ago [–]
There's zero fees in Strike afaik. https://strike.me

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jointpdf 6 hours ago [–]
What about Venmo? Or Cash App?

Venmo has been ubiquitous for years—everyone seems to have it. I’ve used it for everything from buying plants at the
farmer’s market to paying rent and medical expenses.
Edit: Of course the default broadcasting of your payments to a social feed is bonkers and needs to be turned off.
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mellow-lake-day 5 hours ago [–]
Speaking of Venmo. Venmo for some reason would not let me confirm my bank or credit union no matter what I
did or what email address I used or however long I waited, the error message is one of those non-sensical
catch-all error messages originating from some black hole. And customer service cannot do anything because
"it's not up to them". Cash app worked instantly though. Anyway I would not recommend venmo or at least
offer an alternative.
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dessant 4 hours ago [–]
They don't appear to be viable for people outside the US.

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EastOfTruth 1 hour ago [–]
Venmo is owned by Paypal

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tpxl 7 hours ago [–]
As far as donations go, Patreon and Ko-fi should have a lot lower fees.
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sebazzz 6 hours ago [–]
Patreon is not necessarily an alternative because supporting someone is more of a subscription kind of
transaction, and not a one-off thing.
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pkulak 7 hours ago [–]
You say no crypto, but Nano was built for exactly this. You're not gonna beat zero fees.
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arcticbull 7 hours 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.
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runeks 5 hours ago [–]
Zero fees? In crypto, there's an inverse correlation between on-chain fees and price volatility. So either you
incur high on-chain fees or accept a high exchange rate risk.
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10 of 18 10/5/21, 3:25 PM
lvl100 1 hour 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.
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ghoomketu 3 hours 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/
reply
damsta 4 hours 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.
reply
wslh 2 hours 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
It is incredible how, very few times, developed countries can directly build a new infrastructure that beat the infrastructure of
most developed countries.
reply
konschubert 4 hours 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".
reply
MilaM 3 hours 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.
reply
xdfgh1112 4 hours 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.
reply
MaKey 3 hours ago [–]
I wish there was some kind of regulation against this.

reply
7demons 6 hours 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.
reply
11 of 18 10/5/21, 3:25 PM
zatkin 5 hours ago [–]
Can you elaborate on what you mean by “cPanel route”?

reply
MangoCoffee 5 hours ago [–]
i assumed he is talking about the control panel (cPanel) for webhosting.

https://www.webhostingtalk.com/showthread.php?t=1770316
reply
PaywallBuster 6 hours 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
reply
bserge 7 hours 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.
reply
megous 2 hours ago [–]
Easiest way to start selling is just to put your bank account number on a website or send it via email. I've yet to find a
service that doesn't offer bank transfer. And since this year it's also 0 fees, instant payments.
If you pick a right bank, you also get a JSON/HTTP based API for free, if you want to get your payment processing
fancier later on. And your funds are insured.
PayPal is ridiculously expensive and risky way to receive money, and not simple at all. As a result almost nobody
offers it in Czechia.
reply
mrweasel 4 hours 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.
reply
exporectomy 5 hours ago [–]
Yep. I investigated Stripe once but you had to use an API. Paypal is just copy and paste code into your HTML page.
reply
a_imho 1 hour ago [–]
Also Stripe is not supported in many countries.

reply
I completely disagree. Stripe or Paddle if you want them to take care of vat nightmares
Also gumroad if you want a platform
reply
fastball 7 hours ago [–]
What about Shopify?

reply
ffritz 6 hours ago [–]
Apples and oranges.

reply
12 of 18 10/5/21, 3:25 PM
mohanmcgeek 5 hours ago [–]
There's such a thing called Shopify Pay

I think it's powered by stripe though.
reply
sdrinf 6 hours 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!
reply
exporectomy 5 hours 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.
reply
foreigner 5 hours ago [–]
I am one of those people that is put off by PayPal.

reply
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.
reply
WA 4 hours ago [–]
German userbase, B2C, I offer PayPal, Stripe and SEPA wire transfer:
70-75% PayPal
15-20% Stripe
7-9% SEPA wire transfer
reply
petercooper 3 hours 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.
reply
tjpnz 4 hours 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.
reply
bradwood 6 hours ago [–]
Time to put all this on crypto rails and disrupt these bastards out of existence.
reply
ptudan 5 hours ago [–]
That's exactly what Flexa https://flexa.network/ is doing (I just got hired there)
reply
kevingadd 5 hours 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.
reply
13 of 18 10/5/21, 3:25 PM
imtringued 5 hours 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.
reply
hirako2000 5 hours 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.
reply
tofukid 4 hours 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.
reply
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.
reply
mrweasel 4 hours 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.
reply
tofukid 3 hours ago [–]
I accept PayPal and credit/debit cards, using “PayPal Checkout”. Go to 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.
reply
systemvoltage 6 hours 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.
reply
fredophile 6 hours 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.
14 of 18 10/5/21, 3:25 PM
reply
the__alchemist 5 hours 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.
reply
retrobox 4 hours 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.
reply
I once had a set of headphones (back when Bose Beats wireless were popular and you got a free one on
academic discount when buying a MacBook Air) sell on eBay, with receipt confirmed but the buyer did a
chargeback claiming the purchase was unauthorized.
I don’t understand all the circumstances, but PayPal let me keep the money. Dunno if they successfully won the
dispute with the issuer or if PayPal ate the loss.
reply
qecez 5 hours ago [–]
Meanwhile, accepting Bitcoin Lightning Network payments is free of charge. Can't wait for more adoption.
reply
imtringued 5 hours 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.
reply
londons_explore 7 hours 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.
reply
As someone who was using PayPal during all of the 2010s, they actually changed a lot. It is also worth noting that--
until today, meaning they have lost he high ground and it arguably doesn't matter anymore as sane companies will
chase the lowest price for a service that is a direct cut of revenue--they were always cheaper than Stripe (with bulk
rates that kicked in sooner and micropayments pricing options), had a fully functional product (it was amazing how
Stripe was getting people without offering auth/capture), and a safer mechanism for notification buffering. PayPal
supported being a fully backend credit card processor in addition to their "express checkout" flow, and frankly did
everything Stripe did better... except have complex documentation and no real help to do your integration. If anything
I would claim that it was this documentation that bit them. (Hell: one chance they made was to build out an entire
REST-API version of their service with OAuth and a bunch of other stuff in a direct attempt to compete with Stripe, but
that wasn't actually the issue: they just look not cool and have documentation that felt daunting.)
reply
brnt 7 hours 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.
reply
ajkdhcb2 6 hours 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'.
15 of 18 10/5/21, 3:25 PM
reply
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.
reply
ajkdhcb2 6 hours 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
reply
> I disagree, I think it is the biggest factor.

You probably think that because of the insecure nature of the alternatives you're familiar
with. It simply doesn't occur that much, fraud, and when it does, the recourse options you
have seem to work. Take a closer look!
> KYC
Yes, and this has increased over the past few years. An account number can't be private, in
fact, many banks double check the name of the owner before they let you transfer (they'll
show you the mismatching name).
reply
2ion 4 hours ago [–]
- direct bank transfer = debit. When you send money using SEPA you have no right at all to charge the money
back, as it's always a voluntary authorized transaction. The marchant got you by the balls.
- In DE at there are fast "instant" payments called paydirekt or giropay, which make "checkout" using your giro
account fast and simply. However, it's debit again. Balls grabbed.
- Your checking account usually receives your salary, and you have to monitor it for fraudulent charges, which
can just "happen" if somebody knows your IBAN. Therefore, entering my IBAN on any site that is not 100%
trustworthy and liable is a no-go.
Debit is really bad for buyer's protection, and even when using "reverse debit" which means authorizing a party
to draw money from your giro account, you in theory can reverse such charges, but the reversals are handled
by your home bank and in many cases the reversal is getting rejected based on intransparent reasons or takes
_very_ long. Customer service is simply bad at banks.
So what about credit card processors like Stripe?
- German credit cards are issued largely by banks in the visa/mastercard system. That means the banks
themselves are responsible for accepting or rejecting chargebacks. Bad customer service by banks again, very
high burden of proof => high chance of chargeback not going through, paper tiger wars.
- Most merchants have really shitty payment gateways in place or even store credit card information on site.
The smaller the business, the shittier the storage and you can basically guarantee that data protection is
effectively handled at most SMB like trash. => I do not enter my main credit card info on random sites.
So what does Paypal offer?
- almost no questions asked chargeback of any amount if you return the goods (proof = shipping label) - masks
credit card number IBAN and other information from merchant
That's it. I'm ok paying small amounts using direct debit but expensive purchases, like electronics, gardening
equipment and so on, go through either (a) Amazon w/ its no-fullshit refund policy (b) a merchant offering
PayPal. PayPal is expensive, but customer friendly. Germany has _no_ true competitor to PayPal's service
except notarized escrow, and I don't want to lawyer up just to buy a lawn mower.
reply
16 of 18 10/5/21, 3:25 PM
doikor 4 hours ago [–]
About the charge backs if one is mainly shopping from local companies there is really strong consumer
protection laws instead.
Basically you can demand a refund and if they don't give it to you it is a really simple process of just
sending a bill to that company for your money and initiate bankruptcy process if they fail to pay.
reply
2ion 1 hour ago [–]
Yes, but in this context, everything depends on the interaction with the merchant. While most
merchants are not pricks, they are businesspeople and won't unconditionally accommodate any
claim even if it is reasonable. Based on my experience, the worst are not necessarily the small
merchants unless they are just fraudsters but the semi-large online stores like Otto/Saturn
/MediaMarkt which will do everything to make a return and refund as impossible as possible.
reply
evandijk70 8 minutes ago [–]
In the EU, the law is that merchants have to allow a return and refund for any online
purchase unconditionally, provided that it was initiated within two weeks of purchase. I have
never had any problems with this.
reply
s17n 6 hours ago [–]
There's no way to do peer to peer direct bank transfers in the US.

Also, in the US, credit card providers accept all liability for fraud, as a consumer there's no way you will ever
lose money to credit card fraud.
reply
maccolgan 5 hours ago [–]
ACH does work, but it's just not accessible via an API and such.
reply
fmajid 5 hours ago [–]
There’s Zelle, but it lacks universal coverage.

reply
TheSpiceIsLife 6 hours ago [–]
What does direct bank transfers offer in the way of dispute resolution?
Here in Australia we’re constantly warned not to transfer money direct to sellers bank account as there’s pretty
much no way you’ll get your money back if the goods don’t arrive, and there’s not much the police will do for
small value transactions.
reply
> What does direct bank transfers offer in the way of dispute resolution?
It's just not something that comes up. The number of such stories I read on here/through Anglo-Saxon
sources far outnumbers the number of local problems. Fewer shady sellers, perhaps?
To your question: although not as easy as a charge back, banks let you appeal. Some (perhaps many
now) also offer cheap or free 30/90/365 day purchase insurance.
Also, for small value transactions there's a special legal channel.
reply
londons_explore 6 hours ago [–]
Address books in phones don't store people's Bank details, making it a pain to pay someone. Many people don't
have their own bank details memorized either.
Being able to send money to someone just knowing their phone number is the real value-add.
reply
Symbiote 6 hours ago [–]
Within several European countries they do, since the banking systems support sending a payment using
a phone number. You get confirmation of the recipient's name before pressing "send".
17 of 18 10/5/21, 3:25 PM
It's MobilePay in Denmark and Finland, Vipps in Norway, Swish in Sweden, PayM in Britain, etc.
For example, we split a restaurant bill at the weekend. In roughly the time it took one person to pay the
whole bill on a card, the rest of us had sent ¼ each to her using her phone number. There are no fees for
this.
In the next year or two, this should start to work internationally.
https://en.wikipedia.org/wiki/European_Mobile_Payment_System...
reply
evandijk70 6 hours ago [–]
I can send anyone a 'payment' request from banking app on my phone over whatsapp, which they can
very easily pay through their banking app.
reply
hocuspocus 4 hours ago [–]
> Many people don't have their own bank details memorized either.
In the era of ubiquitous smartphone usage, nobody needs to memorize bank account numbers.
But even 15 years ago I would copy/paste my IBAN into an email.
reply
You can ask someones account number.

reply
makeitdouble 5 hours ago [–]
I don't know if we'd call that a "network effect", but there is a (vicious?) cycle cementing PayPal's position.
More often than not sites will get different prices based on the transaction volume, so having a number of small minor
payment options is of little benefit, except for very specific cases like Alipay.
Then if volume is transaction an important consideration, going with the market leader is the most reasonable choice.
I'd assume that's the logic Nintendo applied for its online store for instance, making PayPal the only alternative option
to standard payment systems.
reply
pjerem 6 hours ago [–]
PayPal do have a network effect amongst customers who choses PayPal because they marketed for decades that
purchases through PayPal are protected in case of issues.
reply
another-dave 3 hours ago [–]
That probably just makes them a nicely cemented incumbent rather than a network effect.
Contrasting with social — if I want to message all my friends about a housewarming party, Mastedon might be
my preferred platform & I might hate FB/WhatsApp, but if none of my friends actually _use_ Mastedon I'm out
of luck. I have to talk with my friends somewhere that they can receive the message.
Whereas if a merchant offers me payment options of MasterCard, Amex or PayPal online, there's no additional
pull towards PayPal because all my friends use it.
reply
fighterpilot 6 hours ago [–]
That isn't a network effect

reply
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PayPal raises fees for most domestic transaction types to 3.49% + $0.49 ... https://news.ycombinator.com/item?

dr_dshiv 5 hours ago [–]

Reason077 4 hours ago [–]

c12 3 hours ago [–]

Due to Brexit merchant fees in the UK are no longer capped.

Reason077 1 hour ago [–]

> "Due to Brexit merchant fees in the UK are no longer capped."

HappySweeney 15 minutes ago [–]

stephen_g 4 hours ago [–]

nicoburns 3 hours ago [–]

TheOtherHobbes 1 hour ago [–]

rendaw 2 hours ago [–]

Scoundreller 4 hours ago [–]

kolinko 5 hours ago [–]

Reason077 4 hours ago [–]

dr_dshiv 4 hours ago [–]

stephen_g 4 hours ago [–]

jokethrowaway 4 hours ago [–]

PayPal is used because of customer protection.

danieldisu 4 hours ago [–]

oneplane 4 hours ago [–]

fragmede 35 minutes ago [–]

ethbr0 8 minutes ago [–]

jokethrowaway 4 hours ago [–]

tinus_hn 4 hours ago [–]

semi-extrinsic 4 hours ago [–]

patentatt 4 hours ago [–]

Grimm665 31 minutes ago [–]

smaryjerry 3 minutes ago [–]

throwaway473825 2 hours ago [–]

op00to 1 hour ago [–]

nomercy400 10 minutes ago [–]

crtasm 54 minutes ago [–]

op00to 1 hour ago [–]

jokethrowaway 3 hours ago [–]

the-dude 2 hours ago [–]

Sander_Marechal 3 hours ago [–]

tinus_hn 3 hours ago [–]

apexalpha 0 minutes ago [–]

krageon 2 hours ago [–]

> as these are unauthorized

arnvald 4 hours ago [–]

krageon 2 hours ago [–]

> Maestro cards can't be used for online payments

yarcob 2 hours ago [–]

scrollaway 4 hours ago [–]

the-dude 5 hours ago [–]

herbst 2 hours ago [–]

twoslide 5 hours ago [–]

harry8 5 hours ago [–]

dmantis 2 hours ago [–]

twoslide 3 hours ago [–]

throwaway473825 3 hours ago [–]

krageon 2 hours ago [–]

cm2187 5 hours ago [–]

axelthegerman 5 hours ago [–]

It's not about more or less expensive or higher/lower VAT.

Symbiote 5 hours ago [–]

speleding 3 hours ago [–]

AniseAbyss 4 hours ago [–]

alisiddiq 2 minutes ago [–]

kaslai 8 hours ago [–]