Paypal 'Clarifies' New Fees

Hearing the anger over new fees introduced months ago with minimal notification, Paypal is now looking to set the record straight.

In an official blog post, director of product marketing Heinz Waelchli explains the reasoning behind what anyone who happened upon Paypal's terms of service since mid

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-June has known: If you have a Personal account, you'll pay a fee of 2.9 percent, plus 30 cents, to get transfers from other Paypal accounts filed as "Goods" or "Services."

Money transfers to friends and family are free, even for people with Premium accounts. This is what Paypal focused on when announcing the changes to its service, staying relatively quiet on the new fees for Personal account holders.

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Illustration: Lou Beach
The issue isn't so much the added cost, but the lack of notice. After speaking to other Paypal users, I know I'm not the only one who didn't spot the changes until I saw the money coming out of my incoming funds.

Waelchli said an e-mail went out "to all customers who asked to receive this information," so I guess I must have clicked a box that said "Please don't tell me when you intend to charge me more money, but definitely tell me about all the great new services you're offering."

What really seemed to rile people up after the original story was a quote from Paypal PR Manager Charlotte Hill: "We didn't want to make a huge formal communication out of this pricing change, because we weren't really adding any fees, and we were hoping it would be a more useful experience for people," she said.

I think what Hill meant was because Paypal had eliminated friends and family transfer fees for Premium accounts, but added goods and services fees for Personal accounts, the sum total was nothing additional (never mind that Paypal made a big to-do about one of those changes, but not the other).

Whether Hill's logic is flawed or just straight-up PR spin, the point remains that every Paypal customer, or at least every Personal account holder, should have been clearly notified of the changes, without the marketing hype. I hope for Paypal that it's a lesson learned.

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