Bye bye PayPal

[Wayne]

You may have noticed that we no longer accept Paypal. While a lot of our customer's prefered to use Paypal, their new terms simply are not compatible with any sort of a business model.

Paypal will no longer refund seller’s fees when a refund is processed.

When someone sells goods or services, they are charged a flat transaction fee ($.30), plus a percentage-based commission on the sale (2.9% domestically). If a refund was issued, everything except the small transaction fee was returned, but now PayPal has said it will keep seller’s fees too. I have never heard of any other processor keeping this fee. In other words, when we issue a refund, that 2.9% is paid by Aloft, not Paypal. Basically, once Paypal takes in money, they will never release any.

Sadly, refunds are part of business, no way around it. For Paypal to keep these fees is outlandish.

They already charge much more than any other processor. This is downright insane considering the funds are usually already in the clients account, or they are supplied via an ACH transaction that is usually very low costs. Paypal has made more and more profits each year, something over 2 billion dollars last year. Do they really need to stick it to the small guys even harder?

So we are looking at other options. For now we accept Amazon Pay (works very similar to Paypal, so you don't need to type in your address, etc) and we take all the normal credit cards also. We are looking to add google pay, apple pay, perhaps an option for ACH payments too.. Got a favorite, let us know.

Paypal has simply become too greedy and priced themselves out of the market..

PayPal has said that anyone who disagrees with any of their new terms is free to close their account.

 

[Konrad]

As you know I hate banks!! If it was practical I'd pay in gold! But for now cash will have to do!

 

[HENNY]

I don't have any gold would copper do?

 

[thenated0g]

I usually only use paypal as its convenient or if i'm getting something from somebody like banggood that has problems with "quality control" and than paypal's refund policy is a nice hammer over there heads to get your problems solved when they inevitably have a problem.

I have seen a lot of places use the amazon pay which from a buyers perspective is the same as paypal or google pay. You just click a couple buttons and your done. Actually those are easier than paypal as it doesn't take you to another webpage like paypal does, you just authorize the payment and done. I havent had to ever to a refund on a amazon payment so dont know what that's like.

short version: everything will be fine

 

[Wayne]

Amazon pay is pretty easy to work with for refunds. I've had no issues there.

Really do not understand what Paypal is thinking.

 

[gquiring]

I'm glad to see you took action against Paypal. I read all the issues about them on the Reddit forums. They need more businesses to pull the plug and then maybe they will start to change for the better.

 

[Hazegry]

Just to put it in perspective, lets say Aloft gets 2000 dollars in returns a day, that's 21,170 in fees a YEAR at the rate of 2.9% Do you think Aloft is going to pay that? No, to continue to provide that service they would have to pass that along to you the customer to keep the bis operating in the black. Aloft is not running a charity, and if you want there to continue to be places to buy items for your hobby you should still support them.

 

[Glenn Beer]

I won’t miss the PayPal button at all. I almost signed up but started reading the buyer side TOS. When I got to the part where they could take money from my linked bank acct, and the only recourse was by binding arbitration, with an arbitrator chosen by PayPal, I just couldn’t believe that would end well.

 

[Wayne]

It never does..

Thanks guys!!

 

[karolh]

As a regular PayPal user I was not aware of this seemingly new twist from them, so thanks for bringing it to my attention. Will be checking out Amazon Pay as a viable alternative.

 

[Diceman]

I have to say I didn't know as well, but I have had no issues as a buyer with PayPal. They secure anything I buy by allowing me to get my money back if the seller fails on sending the item etc. I think they are great for the buyer. I have send money internationally with absolutely zero hassle what so ever and they even change the money for you right away (for a fee of course). Plus I can send money to anyone for no fee to either one of us as "friends and family" which works perfectly for private party sales like off RCGroups.
I have no problem switching to Amazon if they do this system just as well (or better of course) but it will be hard to beat. I agree that PayPal is getting greedy for sure.

 

[Diceman]

Um..... I just found this about PayPal vs Amazon pay, to me it looks like PayPal is a bit cheaper for the small business owner? Am I wrong? This is as of March 2019.

• PayPal - For business in the U.S., you pay 2.9% + $0.30 per transaction while outside the U.S., the transaction fee varies from around 3 to 4.5% of the amount plus a fixed fee based on the currency. Also, you may have to pay more for the micropayments, transactions under $12, that are charged at 5% to 6% + a Fixed Fee based on the currency per transaction.
• Amazon - Amazon payment gateway charges 2.9% + $0.30 per transaction for domestic U.S. transactions, plus tax where applicable. They also charge for Cross-border transactions that are subject to an additional fee of 3.9%.

So, what does this mean? Well, I’ve calculated an example monthly fee for each service to give you an idea of which payment gateway is the most cost-effective. For my calculation, I am assuming your business is based in the US, and you are getting 50 transactions of $10 and $100 each in a month. So, the transaction fee you pay will be:

Now assuming you have 50 such transactions in a month for each amount, so the fee charged for $10 transactions (the total amount you receive is $500 per month) on PayPal will be $27.5, and on Amazon Pay will be $29.5. Whereas the fee you pay for $100 transactions (total amount $5000), on both PayPal, as well as Amazon Pay, is $160.
We can say, PayPal is cheaper if you are dealing in low-ticket items or services. However, do remember that the cost calculated here is from a US perspective and may vary from country to country, so be sure to confirm and estimate the cost in your country before committing.

 

[Jim Snodgrass]

I like using PayPal .. but have an Amazon account too so fortunately am still doing business with Aloft for that reason.., but from an end user's perspective PayPal has a set of capabilities that are far superior..

 

[Wayne]

Diceman, that all falls apart when you consider that a % of all transactions will result in a refund. This could be for any number of reasons. Paypal does not return the fees when there is a refund. Suddenly you are paying a lot more for their service.

Now let's look at another source of their greed. Paypal tends to be tied to bank account or ACH. This costs them VERY little to get the money from your bank account. Paypal prefers you use your bank account as they make more money that way, MUCH more. Not only that but many people also carry a balance at Paypal, this costs Paypal even less to process. Amazon does not do this, it is always tied to a credit card unless you happen to have some gift cards or balance with them (rather rare). Since the majority of their payments are tied to a credit card they actually have higher costs as credit cards do costs more to take as a payment source.

We also have a credit card processor. It is our least expensive payment option.. Go figure.

I really do hating paying these processors to allow us to be paid. None of them really offer me any protections against fraud despite what they may claim. I have been stuck with fraud from all of them. I will say that Paypal offers limited protection for buyers (I use it myself) but I have also been stung with it when I attempted to buy from a fraudulent seller on ebay last year. Paypal told me sorry, there is nothing they could do.. That is the reality.. They are happy to help if they have another customer the cen send the bill to and force them to pay, but if that other customer has disappeared and they can't bill them, then the other guy is stuck with the expense.

Don't even get me started on the total crud that is the credit card business! Credit Card companies pretend they have a secure payment method. They bill the card owner and the merchant for the ability to use the card. The reality is the cards have almost no security and as a result they cost the merchants great amounts of money in fraud, and we are stuck with the bills. Guess what, we have to pass those bills onto our customers with higher prices.. The credit card companies actually make more profits thanks to fraud!

That is the reality of today.. I am always looking for the better payment setup..

 

[Konrad]

...
We also have a credit card processor. It is our least expensive payment option.. Go figure.
...

Is this true? I pay with cash (Federal Green Stamps) to try to mitigate these bank charges. It wouldn't surprise me to learn that banks would have a higher processing fees having to move physical paper!

The bankers will have their pound of flesh! My apologies to Bill (Shakespeare)-Merchant of Venice

It is a sad comment on our monetary system when banking (financials) makes up 28% of the USA GNP. This is just shuffling paper* from one pile to another!

* Today it isn't even paper! Heck, it isn't even backed by anything! Too big to fail, - My ass it has failed!

 

[Jim Snodgrass]

Wayne,
Sorry PayPal is such a sore spot.. I'd no idea returns and fraud were such a problem. I never see that aspect of it, and I've never had any issue sending or receiving funds thru them ( or Amazon which I return stuff all the time without any issues) .. so my perspective is completely different.. JimS

 

[Wayne]

No worries, it is a different perspective. Like I said, I am happy to use paypal when I am sending money out, but when receiving it as a business it is another matter.

I do feel that these payment gateways are all very expensive compared to what protections we actually have. I guess I should be happy that you all don't need to mail me checks for your purchases.

All I want is a low expense solution that is actually secure, reliable and easy for customers.

 

[Wayne]

OK - time for a round a bout. We had too many people asking for us to bring back Paypal, so as of yesterday it is back. But we have new terms as a result. Since Paypal does not refund their fees, we will have to pass this expense onto the Paypal customers should they need a refund.

We have updated our terms on our site to reflect this change. I imagine it will lead to some fights.

I do not like this, but it allows us to offer Paypal and make a large portion of our customers happy.

 

[Konrad]

I hate it when the big guys (PayPal) can dictate terms! Can you do that per your user terms with Paypal? I hope so! I as a cash and carry consumer hate to be subsidizing the credit markets and such. Those that use these financial tools should carry the full cost of these tools!

I'm sorry to see PayPal back on the docket!!!!

All the best,
Konrad

 

[jbblunck]

Too much ado. We used to have different charge cards for different retailers. Remember gas cards?

it’s the 21st century. Makes sense to use a variety of pay schemes depending on the vendor. Silly to browbeat the seller.