Comments on: A PayPal Christmas

By: Kate Litvak

Kate Litvak — Wed, 21 Nov 2007 02:38:19 +0000

As I tell my students in Payment Systems class, a consumer should never, never, NEVER use any payment system other than credit cards if a merchant accepts credit cards. Federal law provides substantial benefits to credit card users (the strongest available protection against fraud and other unauthorized use, broadly defined; protection in billing disputes; unique protection in disputes with merchants). People who use debit cards, PayPal, eMoney of various sorts, etc. get much weaker rights. Plus, credit card networks usually provide additional protections contractually, beyond what’s required by the government.

Giving up all those rights just to spite credit card issuers is, ahem, unwise.

By: KipEsquire

KipEsquire — Tue, 20 Nov 2007 22:27:59 +0000

Almost forgot: Since I use a cashback credit card, PP needs to offer me something far more tangible than “it’s cool” to lure me away from my plastic.

By: KipEsquire

KipEsquire — Tue, 20 Nov 2007 22:25:03 +0000

Of course, when I pay for something through PayPal, I am still funding it through my credit card — so the fees are merely shifted from the merchant to PP, which is utterly irrelevant to me. And until PP gives me a reason to use direct debit instead, I will continue to use my credit card to pay for PP purchases.

Another consideration: When I pay with my credit card (AmEx, in my case), I know that I will almost always win in any (legitimate) dispute with a merchant. AmEx has never denied any dispute I have ever filed over merchandise or services — never delivered, arrived damaged, not as advertised, not shipped via overnight, etc. This is not an immaterial consideration, especially when buying via smaller merchants and double-especially when using eBay (which owns PayPal, incidentally).

With PP, meanwhile, you must deal with their (far from excellent and hopelessly slow) dispute resolution process.