PayPal is reinstating a controversial policy around its handling of fees in the
event of a refund. Starting next month, PayPal will begin pocketing the initial
2.9 percent commission fee sellers forfeit during a transaction even when the
seller is refunding a customer in full.
> PSA: Paypal will no longer return processing fees (2.9% + $0.30) when you refund
a customer starting October 11, 2019.
After walking back the decision in May due to outrage, Paypal is now moving
forward anyway and hoping you don’t notice.
Nail in the coffin. Goodbye, @PayPal
? Sean McCabe (@seanwes) September 19, 2019
[https://twitter.com/seanwes/status/1174826338202640385?ref_src=twsrc%5Etfw] > Just received an email from @PayPal
[https://twitter.com/PayPal?ref_src=twsrc%5Etfw] about a change in their refund
policy where transaction fees will not be returned. They claim this is industry
practice but that’s not my reality. pic.twitter.com/SPltWGXNTp
? Neko Audio LLC (@NekoAudio) September 20, 2019
[https://twitter.com/NekoAudio/status/1175130478887632896?ref_src=twsrc%5Etfw] > Paypal is changing their policy so that they no longer will refund their fees
for returned orders.
According to them, this is in line with “industry standard practices.”
Is it? pic.twitter.com/iUuQmwOZkI [https://t.co/iUuQmwOZkI]
? Patrick Coddou (@soundslikecanoe) September 20, 2019
[https://twitter.com/soundslikecanoe/status/1175126565635665920?ref_src=twsrc%5Etfw] ?Earlier this year, PayPal updated its User Agreement to change our refund
policy. In line with industry practice, and according to our updated policy, we
do not charge fees to process refunds, but when a seller refunds a transaction
to a buyer, the fees originally paid will not be returned to the seller. The
policy change is going into effect beginning on October 11, 2019,? a PayPal
spokesperson tellsThe Verge.
?We believe that this policy change is in line with industry practice. We know
businesses depend on us and the decision to update our policy was not made
lightly. The policy change allows us to align more closely to our cost
structure, to the policies of our payments partners and to industry practice,?
the spokesperson added. ?We only adjust our policies when we are confident the
changes are fair and aligned with the value that our services provide to
PayPal is one of the most used online payment and financial services companies
on the planet. Originally co-founded by Silicon Valley titans like Elon Musk and
Peter Thiel, the company had a successful initial public offering in 2002 and
was that same year purchased by eBay for $1.5 billion, at the time one of the
largest tech industry acquisitions in history. Ebay eventuallyspun PayPal off
a separate public entity
2015, and the company has remained a major player in the online payments sector.
In addition to providing the financial infrastructure and checkout process for
millions of merchants and websites, PayPal also owns Braintree, the parent
company off peer-to-peer payments app Vemmo and a substantial player in mobile
But PayPal appears to be cutting costs with its new fee policy, just asprimary
competitor Stripe is emerging as one of the most valuable privately held tech
[https://techcrunch.com/2019/09/19/stripe-is-raising-another-250m-at-a-35b-pre-money-valuation/] in the industry. PayPal remains many times larger in valuation and market share
than Stripe, but the San Francisco-based company has grown considerably in the
last decade and is now a significant challenger to PayPal alongside Square and
Amazon?s digital payment arm.