Subject:
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Re: Another paypal horror story
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Newsgroups:
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lugnet.market.shopping
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Date:
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Fri, 6 Apr 2001 17:45:00 GMT
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Viewed:
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511 times
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In lugnet.market.shopping, Amy Hughes writes:
> Seems if you use a debit card, paypal will tie up twice your purchase amount • in
> your checking account for several days, causing bounced checks. And it's not a
> glitch - it's how it's "supposed" to work, according to paypal.
>
> Here's the cnet story...
>
> http://news.cnet.com/news/0-1278-210-5509285-1.html?tag=bt_pr
I think I understand why Paypal does what they do. The bank drafts are not
processed immediately, so, in order to pay the payee immediately, they put a
hold on the credit/debit card associated with the account. This assures they
have a way to collect from you should the bank draft fail. Once the bank draft
is confirmed, they release the hold. Of course the problem is that for some
amount of time, the money is both gone from your bank account, and the hold is
still in place. Some ways the system could solve this:
- If Paypay could use an ATM card, an immediate transaction could take place,
this would obviate the need for a hold
- Banks could allow bank drafts to be immediate
- Paypal could delay confirmation of the transfer until the bank draft goes
through
- Banks could support Paypal's needs by allowing a combination transfer where
the hold is put on the card and then the bank draft initiated, the completion
of the bank draft would immediately release the hold.
These problems just highlight the whole complexity of banking. As soon as you
aren't lugging around and handing over something which is physically worth the
amount you want to spend, you have problems with trust. In any case, the
transfer of wealth is never free (even if you're using gold bars, each time the
gold is transferred, someone either has to assay the gold, or trust a previous
assay).
In the US, we don't fully understand all these issues because we have for so
long been a cash economy for day to day transactions, and there is an extreme
level of trust in the money distributed by the treasury. The result of this is
very reduced costs. Electronic banking does hold hope of eventually virtually
eliminating costs, but it won't happen for some time now.
Frank
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Message is in Reply To:
 | | Another paypal horror story
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| Seems if you use a debit card, paypal will tie up twice your purchase amount in your checking account for several days, causing bounced checks. And it's not a glitch - it's how it's "supposed" to work, according to paypal. Here's the cnet story... (...) (24 years ago, 6-Apr-01, to lugnet.market.shopping)
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