New PayPal Fees - What Next?????

PayPal Adds Fees, Sneakily

By Jared Newman

Aug 7, 2009 12:22 pm

When it comes my personal finances, I like to stay informed, so imagine my dismay when PayPal quietly tacked on fees for a service I'd previously enjoyed for free.

As a writer, a significant chunk of my earnings come through PayPal. For all parties involved, it's faster and more convenient than sending a check. I hold a personal account, rather than a premium one, which means I previously didn't have to pay any fees as long as the money was transferred directly from another PayPal user's account balance.

But when money started rolling in last month, I noticed that a fraction of it (2.9 percent, plus 30 cents) wasn't making the jump from my employers' accounts to my own. In June, PayPal had started charging for payments classified as "Goods" or "Services," even if you have a personal account. It's possible to send money for free as a personal transfer, but this is only intended for friends and family.

As I explained to Charlotte Hill, PayPal's PR manager, the fees themselves don't really bother me. PayPal can run its business as it pleases, and I have every right to take my business elsewhere. What's really infuriating is that there was no warning about the new fees, and no notification once they were instated.

Hill protested. An e-mail did go out, she said, and there were news articles and a post on PayPal's official blog.

Well, not really. Coinciding with the new fees, PayPal started allowing people with premium accounts to make personal transfers for free. That's great for users who do a lot of business on eBay, for instance, because they no longer have to pay for transfers to friends and family. Thing is, that's all PayPal talked about when the changes took place. The news articles Hill cites make no mention of new fees.

I did get an e-mail along the lines of what Hill showed me, but it says nothing about changes to the fee structure for the sale of goods and services. If you want real confirmation that the fees changed in early June, you'll have to look for grumblings on random Internet forums. (Of course, this is nothing compared to some of the previous controversies PayPal has stirred up among customers.)

"We didn't want to make a huge formal communication out of this pricing change, because we weren't really adding any fees, and we were hoping it would be a more useful experience for people," Hill said.

Maybe, but in any situation where you're taking more money from customers - even if it's a small amount - a formal communication is what they deserve. Otherwise, you're just being underhanded