Can PayPal Be Your Pal?

By Laura DeHaan
July/August 2004

She had spent all afternoon searching online for it.  She had finally found it.  It was the perfect gift for her Aunt Sue.  That colorful Tiffany lamp would be just the thing to sit on the end table to finish off the living room of her aunt's new house.  The convenience of shopping right from her living room through eBay and the popularization of online shopping left her feeling confident and happy with her afternoon's accomplishments. Without a second thought, she authorized her PayPal transaction. 

Shopping online through eBay has been made even easier the past couple years with PayPal.  According to their Website, PayPal is a system that "can be used to send and receive payments through the Internet."  Many of us have heard about PayPal, but what exactly is it, how reliable is it, and how can it be used in the call center industry?

According to the user agreement for PayPal, the company "acts as a facilitator to help you accept payments from and make payments to third parties."

EBay hasn't always used PayPal.  Originally, they used the company Billpoint to make online payments, but in the two years that the corporations worked together, Billpoint struggled to compete against PayPal.  In July of 2002, eBay decided to give up the fight and they purchased the rival payment company.  The deal was made for $1.5 billion and "with the acquisition, eBay gained control of the popular electronic payment service favored by many of its customers," according to www.news.com.

PayPal provides a lot of convenience for its users.  Using PayPal, "you can send money to anyone with an email address using money from your PayPal balance or another funding option of your choice, such as a credit card, debit card, or your bank account," stated the PayPal Website.  Plus there is no fee for activating an account.

In order to be as user friendly as possible, PayPal offers a number of different ways to handle the money that goes into your account.  According to PayPal, the money can be used to:

• Send a payment to someone else

• Use your virtual debit card to shop anywhere online

• Sign up for the PayPal Money Market Reserve Fund to earn a return on your PayPal balance

• Withdraw the money to your bank account

• Request a PayPal ATM/Debit Card and withdraw the money from an ATM or spend it anywhere the MasterCard or Cirrus logos are displayed

PayPal also offers a protection policy that is available to users who met certain qualifications.  As indicated online, "PayPal protection is offered to buyers in an effort to make our online trading community a safe and secure place."  The protection policy also "helps you buy with confidence on eBay.  When you use PayPal to pay for a qualified listing, PayPal Buyer Protection provides $500 USD of additional coverage at no additional cost," states the eBay protection plan.  Furthermore, with this policy, PayPal "works hard to ensure that transactions made within [the] community are safe."

To borrow the cliché though, not everything is a bed of roses regarding the services of PayPal.  The user agreement leaves some room for ambiguity.  Opponents of PayPal have their own Website, www.nopaypal.com, which states, "According to PayPal, accepting their Terms of Service in effect means you waive your rights to credit card consumer protection laws, and that you may not issue a chargeback for anything you purchase using your credit card and PayPal account."  Because your rights are waived concerning normal credit card protection laws, if the transaction between companies doesn't go smoothly, you could be left either without your money from someone or without the credit that you paid.

Problems also arise when doing business internationally.  In the instance of eBay, "if you choose to ship internationally, you do so outside of the Seller Protection Policy.  Furthermore, shipping to a country not listed on the list of PayPal approved countries is a violation of [the] service and may result in termination of your account."  If a person does not follow through with payment, then there is no protection under the policies of PayPal.

Although PayPal offers customer service, many people are left unhappy by the accessibility of help.  "[PayPal's] customer service is horrible," stated an anonymous detractor on an anti-paypal Website.  "They hide their telephone number, (intentionally – by their own admission) and only provide support via ‘form' emails."

Users of PayPal have varying levels of satisfaction.  According to an online forum on eBay's site where consumers are allowed to freely offer their opinion about PayPal, one user is completely satisfied with his results from engaging in the use of PayPal.  This customer applauds PayPal by saying, "I've been with PayPal for about three years now and I love it.  I am primarily a seller with over 1,100 transactions, most paid by PayPal and never [had] a problem."  At the other end of the spectrum, there was also a customer who is left unhappy, "For some unknown reason you have locked my PayPal account.  I have done everything you require, to the letter.  I have followed your user agreement to the letter.  Yet according to the email I received from your customer service (in response to my inquiry) you say that you believe I am (or you suspect I am) committing fraud!  On top of this you cannot tell me why you think I am committing fraud (or refuse to tell me)!"

So despite all the benefits and flexibility of PayPal, there are also some concerns and possible risks.  With the ubiquity of Internet, the growing popularity of online transactions, and the high visibility of eBay, it is a safe assumption that PayPal will become more commonly used and generally accepted.  Time, no doubt, will resolve some of the concerns and overcome some of the weaknesses.  It becomes not a question of if your call center will make use of this promising payment option, but rather when and for what purposes.

Laura DeHaan is an English major at Hope College and is planning to become an Elementary Teacher

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