Using PayPal for 'backdoor' Super Balance Transferring?

DrScotsman

Instant Bank Transfer is Direct Debit. If you were paying by debit or credit card, it would say "Credit/Debit card".

Paypal asked for your bank details a while back (or you volunteered them, e.g. to withdraw money) and they set up a direct debit. You gave them the details of your Halifax current account - the same account your debit card is tied to, which is why you have been assuming you've been paying with your debit card all this time. The money comes out of the correct bank account, so you do not question how.

Notice how the numbers you've X'd out are the last 4 digits of your bank account number, not the last 4 digits of your debit card. Notice how when you do any other online transaction with your debit card they NEVER ask for any digits of your bank account number, only the card number. Why would Paypal have those digits? Because they've set up a direct debit.

If you log into Halifax online and look at the direct debits set up on your current account (easy to do, I bank with Halifax), you will see a Paypal one there (unless by coincidence it's happened to be cancelled recently).

Also, go onto your Halifax online and look for a Paypal transaction. Do you see any mention of the words "Direct Debit"?

Back to Paypal, if you click the "Change" button and change the funding source to a credit or debit card - even your Halifax debit card - a fee will be added, and it will no longer say "Instant Bank Transfer"

As for the other individuals, they likely have the same set up. Direct Debit is cheaper for Paypal, and they strive to get all of their customers to set it up. They make it the default funding source where people who never notice it (like you) just leave it as is. Under certain circumstances like paying for an eBay transaction, Paypal will/would try to convince you otherwise if you attempted to pay by credit/debit card.

Have I convinced you yet?

DrScotsman

In case you don't believe me that Instant Bank Transfer = Direct Debit:

http://pages.ebay.co.uk/paypal/bankaccount.html

eBay wrote:

Speed - send money instantly from your bank account

Having set up Direct Debit with PayPal, your bank account becomes your default payment option. You then have the option to make payments by Instant Bank Transfer. This is when your money is debited from your bank account and then transferred into the recipient's PayPal account instantly. In the event that there is not enough money in your bank account to make a payment, your debit or credit card acts as a back-up funding method

Or just having a Google for "Paypal" "Instant Bank Transfer" "Direct Debit" in general will turn up a lot of info.

If you still don't believe me, my only conclusion is that you don't actually know how a direct debit works, and falsely assume you would know if you were using one. I'll concede that Paypal do avoid using the words direct debit as much as possible for some reason, but the fact is that's what an instant bank transfer is.

Nine_Lives

It must be then that i thought i knew what a direct debit was & clearly didn't.

I thought it was a payment you set up with an organisation where money would be debited from your account on an agreed regular basis (e.g. broadband subscription payments)

Just sending from one persons account to another was what i would've called a bank transfer or something along those lines

I thought there was a difference.

DrScotsman

K_P83 wrote: »

I thought it was a payment you set up with an organisation where money would be debited from your account on an agreed regular basis (e.g. broadband subscription payments).

They can be regular or irregular.

A Direct Debit is an authorisation for your bank to pay the company in question whenever they request the money (subject to the safeguards of the Direct Debit Guarantee, which are pretty pro-consumer). You authorised Paypal to collect money from you using this Direct Debit every time you made a purchase, and they did.

Once a Direct Debit is authorised, can Paypal "pull" the money from your account, similar to a debit card transaction. What most people call a bank transfer (a BACS or Faster Payment) is a "push" method of payment - you tell the bank to give it to them. That's the difference.

Fiddlestick

K_P83 wrote: »

I thought it was a payment you set up with an organisation where money would be debited from your account on an agreed regular basis (e.g. broadband subscription payments)

That's one type yes.

However companies can vary the frequency and payment amount so long as they tell you that they are doing so and I can promise you that this is what Paypal are doing.

I sometimes bank with Lloyds and if I look at my direct debits then I see one from Paypal.

Whenever I make a purchase using what Paypal call an "instant bank transfer", I see the DD update a few days later with the payment date and the amount.

Trust me, they are taking the money via DD.

~Chameleon~

DrScotsman wrote: »

Your memory is faulty. Paypal says so, and I have checked myself - if you try to gift with a debit or credit card there is a fee (like the page says, can be paid by either).

When you added your bank account to Paypal (which I'm assuming you must have done since you also sell things), they make it compulsory to set up a direct debit on it (or at least they make it very difficult not to). It is the default funding source with every transaction, you have to manually select your debit/credit card if you want otherwise. You have most likely been paying people by this method and not noticing because you selected the same bank account as your debit card.

What bank are you with? You can see if there's a direct debit set up to Paypal online with many banks...

My Paypal (and Ebay) account is funded by my credit card by default. I have 3 cards listed to use for payment, two of which I have to manually choose, the 3rd is the default card. My current account is linked purely for withdrawal of funds from Paypal.

I'd be interested in this too as I've never (yet!) incurred any charges when paying via credit card.

DrScotsman

~Chameleon~ wrote: »

My Paypal (and Ebay) account is funded by my credit card by default. I have 3 cards listed to use for payment, two of which I have to manually choose, the 3rd is the default card. My current account is linked purely for withdrawal of funds from Paypal.

I'd be interested in this too as I've never (yet!) incurred any charges when paying via credit card.

Paying for what exactly? eBay transactions?

~Chameleon~

DrScotsman wrote: »

Paying for what exactly? eBay transactions?

Both Ebay transactions and to send money to people for various other things.

DrScotsman

~Chameleon~ wrote: »

Both Ebay transactions and to send money to people for various other things.

For eBay transactions the fee (if any) is always paid by the seller. You are not informed of its existence.

For the "various other things", still need more info. If you mean other shops online, same principle as eBay applies.

Bear in mind that a few years ago things were different. This is from memory so I might be wrong, but I'm pretty sure that the person sending the money was *never* informed of the fee, and the existence of one entirely depended on what account type you were sending money to (Personal/Premier/etc.).

I think it used to be: Personal accounts never had fees, but couldn't receive credit/debit card payments. Premier accounts had fees for receiving EVERY transaction.