New PayPal Policy and Fee Changes Take Effect in April

PayPal is updating its User Agreement (UA) and Privacy Policy effective April 19, 2018. The change that has sellers buzzing is the removal of its Seller Protection program for certain types of transactions. PayPal states: “We’re updating the additional requirements for coverage of Unauthorized Transactions for sellers under our Seller Protection program to require that the payment must have been made in connection with a transaction where the buyer logged into their PayPal account to complete the transaction in order for sellers to be covered under the program.”

Sellers are concerned about losing PayPal Seller Protection for those types of transactions – check the accompanying AuctionBytes Blog post. (Update 3/19/18: PayPal is not proceeding with that specific amendment after all.)

PayPal is also adjusting some fees (see below).

A change that may have been prompted in part by the changes coming to eBay this year as it transitions to a payments intermediary over the next 2 years, PayPal said it is adding terms “providing that a hold may be placed on a payment sent to you at the instruction of the marketplace, if you sell on a marketplace and accept payment through your PayPal account.”

PayPal is also reacting to new privacy laws in Europe – presumably the General Data Protection Regulation that takes effect on May 25, 2018 – by changing the UA to inform sellers that they have certain obligations around how they collect, store and protect user data of customers in Europe.

PayPal Fee Changes
PayPal has yet to publish the new UA, but has described the changes to come – here are the provisions we spotted impacting fee changes:

– For business accounts, we are changing the fee charged for our faster withdrawal option to an eligible debit card linked to your PayPal account to 1% of the transferred amount.

(NOTE: PayPal added a faster withdrawal option last year for a 25-cent fee. If you have a business account, you’ll want to revisit your settings if you have “faster” withdrawals of over $25.)

– We’re removing the variable rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States when you send money using PayPal balance or your bank account and introducing a new flat fee of $2.99 or $4.99 per transaction depending on the recipient’s country. However, when you send money using your credit card, debit card, or PayPal credit you will be charged the new flat fee per transaction depending on the recipient’s country + 2.9% of the transaction amount + a fixed fee based on the currency.

– We’re clarifying how we calculate transaction exchange rates where we perform a currency conversion.

Here’s the email PayPal sent to users this month:

NOTICE OF POLICY UPDATES
Hello:
Because you’re a valued PayPal customer, we want to let you know about the changes we’re making to the PayPal User Agreement, PayPal Here Agreement and the PayPal Website Payments Pro and Virtual Terminal Agreement that will go into effect on April 19, 2018. We’re also launching an update to the PayPal Privacy Policy that will replace the existing PayPal Privacy Policy on the same date. If you’re interested in more detail, please visit our Policy Updates Page.

What you’ll see in the updated User Agreement
If you want to get a better understanding of what’s different in the User Agreement, some highlights are:

– Changing some of the fees we charge.
– Changing the balance functionality for your PayPal account depending on whether we have been able to verify identifying information that you provide to us.
– Updating the additional requirements for coverage of Unauthorized Transactions under our Seller Protection program, so that they require that the payment must have been made in connection with a transaction where the buyer logged into their PayPal account to complete the transaction, in order for sellers to be covered under the program.
– Updating the eligibility requirements for the PayPal Purchase Protection program.
– Clarifying that certain checkout transactions will require a backup funding source.
– Clarifying how we calculate transaction exchange rates where we perform a currency conversion.
– Removing terms related to the Pay After Delivery product, as we will soon no longer offer this product.
– Adding terms providing that a hold may be placed on a payment sent to you at the instruction of the marketplace, if you sell on a marketplace and accept payment through your PayPal account.
– Clarifying that Sellers have certain obligations under applicable law around how they collect, store and protect user data of customers in Europe.
– Updating the user agreement to enable you to seek public injunctive relief in court instead of arbitration, if a court decides that you have a right to pursue that type of relief and it is not available in arbitration under the terms of the user agreement’s arbitration provision.

What you’ll see in our new Privacy Policy
We updated and streamlined our privacy disclosures in the PayPal Privacy Policy. This Privacy Policy, which includes a Consumer Privacy Notice, will replace our current Privacy Policy for PayPal Services and explains the information we collect, how we use it, and the choices and controls you have across our various services.

We reworded some content and added details to make our practices easier to understand. The ways we use and share your information will not change under our updated Privacy Policy. Our Policy Updates page contains highlights of the changes, as well as a link to the PayPal Privacy Policy. We encourage you to review the changes and the full Privacy Policy in advance here.

What you’ll see in the updated Pro/VT and PP Here Agreements
To clarify that PayPal is not acting as a money transmitter in connection with the PP Here and Pro/VT agreements, we added a section to those agreements stating that PayPal is acting as the merchant’s agent to receive payments on their behalf from their payers.

These changes, along with the others detailed on our Policy Updates Page, will become effective April 19, 2018 for all U.S. users. We encourage you to review the Policy Update and familiarize yourself with the changes that are being made. If you do not agree to these amendments, you may close your account before April 19, 2018.

Thank you for being a PayPal customer.
Sincerely,
PayPal

You can read more about the changes on this page of the PayPal website. And be aware PayPal has quite a few Legal Agreements for PayPal Services in addition to the PayPal User Agreement and Privacy Policy.

And you can leave a comment on the AuctionBytes Blog.

Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.