PayPal (Pay After Delivery)

wiseshark

I received an email from PayPal this afternoon offering a new service of Pay after Delivery (PAD).

When purchasing goods via PayPal, there is now an option to click on PAD in which PayPal will send a payment to the seller for you and allow you 14 days grace before they debit your account.

This allows you to see the goods and if not satisfied, then PayPal will resolve the issue within the usual 45 days of raising a dispute.

I have read the terms and conditions which are quite short and activated this new feature. The only thing that bothers me is that PayPay mention, although they won't take a fee for the service, they say that your finance company or bank may impose a small charge.

I am curious to know if any of the MSE have used the service and what you make of it?

Gromitt

I don't see why your bank would make a small charge compared to how it was before.

It just seems like a way of Paypal incurring less fees whilst looking like they are doing something good for their customers. Ie, you make a payment and instead of Paypal taking funds from your CC or bank account, they delay making that payment for 14 days. In that time you could start a dispute with the seller (Item not arrived, etc) or you may have received a payment. If the later happened, then they may not bother to debit your CC or bank account.

Also, chances are the seller will leave the money in their Paypal account for a while, so Paypal don't even have to suffer the loss as the payment is only virtual until the money is deposited in their bank account.

mojod

Interesting idea.

I do think sellers will need to be careful. A 14 day "no risk trial" is going to boost sales dramatically, but a percentage of the buyers will have no intention of ever paying, another percentage will "half-heartedly" buy it just to see if they want it or not with the remainder being the customers you really want - those that want to buy and like the extra reassurance that the no risk brings.

So long as sellers are willing to expect and tolerate a higher return rate than normal and don't "count their chickens" on the sale actually existing until the 14 days are up, I reckon that overall it's good thing all round.

wiseshark

I would be surprised Gromitt if my bank did make a small charge and obviously would be unhappy. If that were the case, I would not use the PAD.

In the email from PayPal, they state, "that your finance company may impose a small charge". Perhaps they are not referring to banks.

rb10

Gromitt wrote: »

I don't see why your bank would make a small charge compared to how it was before.

Agreed. It's just a get-out clause of Paypal's, just in case one bank suddenly decided to charge for direct debits etc.

Gromitt wrote: »

It just seems like a way of Paypal incurring less fees whilst looking like they are doing something good for their customers. Ie, you make a payment and instead of Paypal taking funds from your CC or bank account, they delay making that payment for 14 days. In that time you could start a dispute with the seller (Item not arrived, etc) or you may have received a payment. If the later happened, then they may not bother to debit your CC or bank account.

Also, chances are the seller will leave the money in their Paypal account for a while, so Paypal don't even have to suffer the loss as the payment is only virtual until the money is deposited in their bank account.

I think the net cost to Paypal will be quite significant.

Under the 'normal' system, Paypal gets the money when the transaction takes place, and then gets to keep it until the seller withdraws/spends it.

Under PAD, Paypal doesn't get the money until 2 weeks later - so they will have less time to earn interest on that money.

Atidi

wiseshark wrote: »

I received an email from PayPal this afternoon offering a new service of Pay after Delivery (PAD).

When purchasing goods via PayPal, there is now an option to click on PAD in which PayPal will send a payment to the seller for you and allow you 14 days grace before they debit your account.

This allows you to see the goods and if not satisfied, then PayPal will resolve the issue within the usual 45 days of raising a dispute.

I have read the terms and conditions which are quite short and activated this new feature. The only thing that bothers me is that PayPay mention, although they won't take a fee for the service, they say that your finance company or bank may impose a small charge.

I am curious to know if any of the MSE have used the service and what you make of it?

I see you are required to have a confirmed bank account on file as that is where they will attempt to take the payment from 14 days later (assuming no dispute is raised)

I'm sure any dispute will involve the usual you returning the goods at your expense to the seller and obtaining an online proof of (returned) delivery.

I'd rather continue to pay by paypal funded by credit card where I can:
(a) earn cashback on my purchase from the credit card company,
(b) pay in the sellers currency (where not GBP)
and
(c) pay the credit card next month at a date to suit me (albeit by the payment required by date). If the product has to be returned, the paypal credit usually hits before I am required to pay the credit card anyway.

MoneyMate

I have used this feature for some time now had no problems whatsoever .

jimjames

I also prefer credit card. If I buy something today I won't need to pay for it until after 15 January. That is a lot more than 14 days away.

Gromitt

mojod wrote: »

I do think sellers will need to be careful. A 14 day "no risk trial" is going to boost sales dramatically, but a percentage of the buyers will have no intention of ever paying, another percentage will "half-heartedly" buy it just to see if they want it or not with the remainder being the customers you really want - those that want to buy and like the extra reassurance that the no risk brings.

The seller gets paid immediately, the 14 days is simply the time before your bank account is debited by Paypal. The only way to get out of paying is to open a dispute, the same as the existing system. There's no "14 day risk-free trial" unless the seller specifically offers it.

rb10 wrote: »

I think the net cost to Paypal will be quite significant.

Under PAD, Paypal doesn't get the money until 2 weeks later - so they will have less time to earn interest on that money.

It could be swings and roundabouts. We don't know the statistics of disputes and people leaving money in their accounts, so the loss of interest could be offset by not having to pay CC/DD fees. Remember that if you use PAD, you can't fund the payment with a CC. For most people, a seller accepting Paypal gets charged the same regardless of the method of payment, so this means more money for Paypal.

dotdash79

I've used it a couple of times, and once I'm happy I allow the payment to proceed before the 14 days are up.

Once I've not received the goods and it's allowed me to cancel the order with our the hassle of waiting for a refund.

wiseshark

Gromitt wrote: »

It could be swings and roundabouts. We don't know the statistics of disputes and people leaving money in their accounts, so the loss of interest could be offset by not having to pay CC/DD fees. Remember that if you use PAD, you can't fund the payment with a CC. For most people, a seller accepting Paypal gets charged the same regardless of the method of payment, so this means more money for Paypal.

Yes, I think it's all about PayPal generating more profit and at the same time trying to discourage CC use which costs them more.

On the few occasions when I have used a CC to fund a payment through PayPal (secondary funding source) I got a message asking, "are you sure you want to pay by CC":rotfl:

It is good for us to have a third payment option and as you have said, by using PAD, it most likely means that the funding will come from a bank account rather than a CC thus saving PayPal money.