Paypal confusion - it not using my credit balance.

[tomos]

A payment was made to my paypal account recently (i.e. it's in credit). I made a purchase, expecting the credit to be used - but it wasnt. When making the payment I was just given my usual payment options (direct from bank account / cc).

I use my Paypal ac very little and only once before had it in credit - that time it was used up immediately on my next purchase.

Now I wanted to make a donation here, I'm directed to my paypal account, I login and this is what I'm presented with -

Paypal confusion - it not using my credit balance.

i.e. I dont even get the usual payment-method choices. Only relevant link is [Pay Now] - so I dont know from where the payment will be taken...

Anyone know what the story is? I'm in Germany, dont know if that makes a difference to the paypal "structure"

[eleman]

Governments woke up to the use of paypal as a means of circumventing national tax mechanisms. For instance, assume that you work freelance, get paid over paypal, and spend it on newegg. Your government does not know anything about these, so they cannot tax it.

So they force paypal to use credit card instead of your paypal balance for payments. Therefore the money becomes traceable in your country as well, in addition to being transparent to the government of Hong Kong.

That is at least what happens in Turkey. I am not sure about other countries, but that's a theory that works.

[tomos]

^ thanks eleman
that explains it

Probably handy enough for paypal too - they presumably take yet another cut when transferring it to your bank.
They really must be making a fortune.

[tomos]

Re donating to dc with paypal -
I'm still not sure do I get presented with "choose payment method" after clicking the [Pay Now] button...

[justice]

No according to the screenshot the payment method is 'Paypal balance' ie the money in your account.
Yor paypal balance must be higher than the money you are paying out so there is no mention about a 'alternative payment method'.

Paypal AFAIK always will try to use your Balance before charging you, however each currency has its own balance, so if you have $50 in your account but you pay in euro's it will charge your credit card. That's how I understand it anyway.

[wraith808]

Yor paypal balance must be higher than the money you are paying out so there is no mention about a 'alternative payment method'.

-justice (December 06, 2011, 07:11 AM)

So they force paypal to use credit card instead of your paypal balance for payments. Therefore the money becomes traceable in your country as well, in addition to being transparent to the government of Hong Kong.

-eleman (December 06, 2011, 06:12 AM)

Neither one of these happens to me; I'm in the U.S., so that could explain it... but this is neither of these is a uniform policy.  Paypal always uses my balance before any of my funding sources, subtracting that amount from the amount to be drafted if necessary.  I can't even tell it to do otherwise.  And if something comes in before my funding source is drafted, that new balance will still be used before the payment source.

[tomos]

Paypal AFAIK always will try to use your Balance before charging you, however each currency has its own balance, so if you have $50 in your account but you pay in euro's it will charge your credit card. That's how I understand it anyway.

-justice (December 06, 2011, 07:11 AM)

that must be what it is:

• The credit is in US$
• the purchase that did *not* use my credit was in GBP
• Now it looks (as you say) like the dc donation (US$) *will* use the credit (US$)

[4wd]

Paypal AFAIK always will try to use your Balance before charging you, however each currency has its own balance, so if you have $50 in your account but you pay in euro's it will charge your credit card. That's how I understand it anyway.

-justice (December 06, 2011, 07:11 AM)

Not here, I was just paid in AU$ and then just spent it all in a mix of AU$ and US$ - it all came off the PayPal balance that was in AU$.  I can choose what my PayPal accounts primary monetary unit is out of AU$, US$ or Euro and the balance will be displayed in that but any transaction will just use their conversion rate and take it off the balance available.

Credit card isn't touched until my PayPal balance is 0, this includes using whatever balance is in PayPal plus credit card to pay for something greater than available PayPal balance.

Neither do I get a choice on where to pay from if my PayPal balance is greater than 0, it will come off of that balance first.

[tomos]

EU?
It could be that if I purchase from local or EU sites - they only use my bank/cc - as eleman says above (post #2)

Then if I purchase outside the EU, paypal is allowed to use the credit.

Will have a look at treating myself to some non-EU software and see how I get on.
I think paypal is being used less and less by sellers, and lately I've seen german sites charging a surcharge if you use it - I can see why because of their charges.

[mahesh2k]

If paypal is letting you use GBP for GBP/EUR item purchase then it's working fine as you're in EU zone if i'm not wrong. That's how paypal works for non-us folks. It uses native currency for respective purchases and uses USD for US based shops and services. This change is applied to paypal since second quarter of 2011 for many countries in EU and asia using paypal.

[tomos]

@mahesh yeah, I think that's right
the credit/payment-in was in US$ and I thought I could spend that anywhere. Just that I didnt know what was going on. (Still not 100% sure - a lot of places you have to actually click the purchase button before being sent to paypal.)

[wraith808]

I wonder what the reasoning behind that is?

[Deozaan]

Sometimes I receive a PayPal payment in Euros (I'm in the USA) and whenever this happens I always have to manually accept or reject the payment. When I accept it, I am given the option to convert it to USD or create a new balance in EUR. I always convert to USD.

[mahesh2k]

Wraith, that is not a bug or something that is causing it. It's common Forex exchange routine that is going on with payment processors. e.g. If I accept 10EUR in my paypal account then paypal forces me for the currency conversion. They make money in this process too. As per market rates, 1EUR=70bucks(for me) but paypal converts it as per their own rules and make rates something like 1EUR=68bucks and eat the remaining funds. Other than that they also charge few more bucks as a service tax and blah. Nobody notices that but when you're dealing with foreign currency you lose anywhere between 2% to 10% in currency conversion and transaction charges with paypal depending on your country.

[wraith808]

I didn't think it was a bug or anything- I was wondering what the reasoning was behind not letting non-US users convert their currencies.  Like I said, it works in the U.S., and they have charged me conversion fees before.