Paypal 'instant bank transfer'

Porcupine

Can anyone explain how Paypal's 'instant bank transfer' works, to take money out of your bank account?

I know it's backed up with a credit card, so they have authorisation in case anything goes wrong, but how do they pull money from a current account? Is it a direct debit? In which case doesn't it take about 10 days to set up each time?

I don't think I've ever used this facility since I got Paypal in 2001 or whenever, always paying by card, so won't the direct debit bounce due to expiry? If it does, will they re-establish it? It's not on the DD list at my bank.

(I had ebay's direct debit bounce due to non-use when I sold something for the first time in 5 years, and they had the temerity to charge me a £5 'bounced payment fee'... after much wrangling they credited it... so I now have a £5 credit on my ebay account waiting for another 5 years)

Or do they have some other mechanism...?

davethorp

They use direct debit to get the money though its quicker than 10 days. I made an instant bank transfer on Tuesday and it was taken from my bank by direct debit today. As you say the transaction is backed up by card.

The system is of course wide open to abuse especially when in my experience paypal will allow instant transfers of near to £1k without knowing for sure that someone has this amount in their bank or not

Porcupine

That's interesting. I wonder how they manage to action the DD so fast. Most other places say that a DD is fixed about 10 days before it goes out, and then can't be changed. That's the point that they have to give you notice that something is going out, too. Am interested in how Paypal can take money out at such short notice.

HeadAboveWater

My paypal balance sits at zero all the time (unless someone has paid me through ebay or something).

If I was to make a purchase through ebay, I use paypal to pay for it, and it takes the money directly out of my bank account and pays the seller there and then. It's essentially like paying via debit card but without actually having to input the details every time so added security.

The paypal account will show the money being transferred from my bank to paypal, then paypal to the seller, and it's all instant.

It will show up on my bank account as a direct debit but it's not set up as a regular payment as such.

epm-84

PayPal do phone you up and ask you to confirm the transaction if it's flagged as a large payment or unusual activity.

Lansdowne

I think there is confusion about 10 days. It may be standard for setting up a new DD, that it takes 10 days, but that is only the setting up. Once it's in place, payments can be taken from it as required.

lovinituk

Porcupine wrote: »

Is it a direct debit? In which case doesn't it take about 10 days to set up each time?

They only set the direct debit up once. Then that agreement is used to get the money from your account as and when.