Bitcoin Forum

PayPal's Stance on Selling BitCoin:


Source: From one of our users who sell's the BitCoin he generates with our website with PayPal (not recommended, obviously, for the charge-back reason alone!).

I bet that a lot of people use PayPal as a medium of exchange for BitCoin between trusted parties, and this could impact that.

Just giving a heads up to all those who sell via PayPal. This was brought to our attention by one of our users and we thought we would share. Did a search and no results came up, so this must be something PayPal is just starting to do. It may be an isolated case, but am interested to see if more cases pop up.

Its pretty severe. I have found out the hard way in the past trying to push the limits selling items on ebay.  Big pain in the arse trying toget back in their good graces. THey made me jump through hoops but at some point you just need it to be there. I've had pleny of situations were is was a life saver. Doesnt look good.

Not really surprising, considering Bitcoin is a superior competitor to them in many ways.  Using Paypal to exchange for Bitcoin is expecting them to willingly intentionally contribute in their own potential demise.

The amount of fraud, charge-backs, scams, bait-and-switch will be the lasting image PayPal has on its memory. This will be the reason for it never being implemented, in ANY way EVER on eBay or Paypal or related websites.

Does paypal lose money? Isnt the seller the only one who would loose and he couldn't cry to paypal. so they should just let people sell.

This is why i tell people not to withdraw to Paypal on exchanges, i would be pissed if i withdrew money and they froze my account.

I am sure PayPal would lose out on a huge amount of money, as they make about 2.9% on each transaction. The reason I believe for this is the amount of fraud going on with related eBay auctions.

There are some situations where they end up just stuck, unable to come at someone who scams.  At least there used to be.  One reason why they now make people wait up to 3 weeks before they are able to use/access payments that have been already paid yet expect the product seller to ship without access to the money is because it was easy to list things for sale that one does not currently have and then go buy them when the item sells.

Back in the good old days I had figured out how to predict in advance when certain items at a major electronics store would end up going on sale.  The store was not a national chain, so it wasn't like every person on eBay could just go to a local store and buy at the prices I was getting.  That meant that I could list the item on sale on eBay and sell it, then use the retail outlet as "inventory" and just walk in and buy the item off the shelf and then ship it.  It worked for me because I could list the item PRIOR to the sale, sell it and obtain the money, then go to the store and use customer money to buy the item and ship it because I had a Paypal debit card that I used in order to pay for the product.  And yes, I actually turned a profit doing it that way because many times I had lower prices than my competition for the exact same model number product, so I got more sales.  And ironically, this store had a price-match policy that matched even their own prices within a 30-day window so if I was off by about a week or two I could just pay the little bit extra and then when it came on sale get the money refunded through the price match.

Well eventually somebody must have ruined it by not shipping the product but just skipping with the money because Paypal changed the rules and fixed it so you had to have sold a certain minimum of that item or something close to it otherwise they would put a 21-day hold on the funds, expecting you to ship the product when the money came to your Paypal account without being able to access even the shipping fee money to ship it.  If proof that the item was in the customer's hands showed up either through positive feedback or by a signature in the delivery system on shipments with a confirmation then sometimes they would release the money a little earlier, but it killed the golden goose on using store inventory to ship from.

But if you think about it, if someone were to scam and used Paypal and ran off with the money, they could just close the bank account they connected to their Paypal account after they transferred the money out of Paypal, or if they had a debit card they could just spend it or pull it out the wall at the ATM, again going to their bank and closing the account before Paypal figured out something was wrong.  But now that they have a 21-day hold policy in place any problems with non-delivery are likely to show up while the money is still in their possession and control unless it happens with a trusted seller who has been selling the same type of product for a while, which is much less likely to happen.

There is a certain dollar limit that, if the scam is below that amount, are not always pursued with legal action because the costs to do so don't justify the attorneys fees and other efforts so they just let it go.  But those little dollar amounts add up to a lot for a company like Paypal.

Plus, Paypal ended up under investigation because they got caught up in a money laundering situation a year or two back.  Some employees at HSBC were setting up companies and bank accounts using customers' information and then depositing and moving money through accounts that the customers did not know they had.  The money would get deposited into the shadow accounts from Paypal sales, and then eventually be either spent from the bank accounts or wire transferred out to other banks.  It was an ugly situation because HSBC, American Express, and Paypal were all involved in the thing and so each ended up under investigation.  There were several different things going on...

One of our lawyers has a connection with someone in PayPal's compliance department. There response was that the amount of fraud is "astonishing" and that they are "scrambling" to cancel all the transactions from accounts that have been hacked.

It seems as if they are spending a lot of resources on fraud related to BitCoin, and it is not worth it. Also, it is hurting PayPal's reputation.

Best thing paypal can do is incorporate bitcoin wallets to their services but they won;t.

I guess they will want to start profiting from Bitcoin soon!  :-\

Paypal using BTC is just setting up a middleman for BTC, which is what we dont want.. Easier to deposit funds but still going to charge you fees for sending, why not just stick to promoting BTC.. plain and simple, Paypal is treading water with toothpick these days...

Paypal has always had that stance on exchanging currencies as long back as I can remember so I don't see it as anything new. Still, its interesting that they take such a harsh stance on things like that, I personally don't think its a good thing for them to do, but they still do it.

paypal is like the horse buggy .... only people that don't know any better use them

this is probably true, but in US there's no other better choice. OKPay, Liquidpay etc all on other countries.

If this ever happened....  :o wow

Wont happen

it is good

maybe later paypal will ally with bitcoin

That means if I live for example in Nigeria, I don't have any option!?

What I wanted to say is that it doesn't have to be in US to be good :o)

I'm just using international service which is better..

Pfft, PayPal will never have Bitcoin integration, irreversible transactions = massive potential for fraud.

This goes will all merchants, eBay, Amazon, etc.

I get paid through Paypal, so if they integrated with Bitcoin, then perhaps I could just withdraw whatever USD I needed to the bank account, and send the rest to my bitcoin wallet.  Saves me the trip to the middleman.

PayPal has always been about the buyer, not the seller. They will do whatever it takes to get a buyer to use paypal. and in a lot of cases, that means screwing over the seller, whether fair or not.

In what way? Fraud by buyers or sellers?

They said publicly recently that PayPal is looking at Bitcoin as a funding source. That doesnt' mean they'll handle BTC transactions from user to user.

I hope it happens; Paypal is an internationally recognized brand.

I hope PayPal gets friendly with BTC.  That sure would improve the BTC adoption rate.

Fraud can go both ways, but it is most likely the buyer. The buyer can receive the BitCoins and then file a charge-back say they never got them. The seller could just never send them, if the buyer paid as a 'gift' or there was nothing in the notes saying it was for 'e-currency or bitcoins' then they seller could say it was a 'service'.

but if they came up with some kind of escrow service

PayPal is lame. They are run by corporate hooligans who could care less about you or your family. They fly around on corporate jet's eating salmon and patte.

From what I understand, selling e-currency is against their policy - always has been (acting as an exchange). Instead of just closing accounts they are working with most sellers who violated their policy and letter them move on. This seems fair to me.

haters gonna hate

paypal is scum