Paypal and Visa announced yesterday, July 21, a strategic partnership to expand cooperation between the two companies and launch numerous initiatives using their combined networks.
Here are the details from the Press release, with my italicized commentary.
- Enhanced Consumer Choice and Improved Experience for Visa Cardholders. PayPal promises not to push people toward a bank and away from their Visa cards; Visa and ACH will be presented as equal in all ways and Paypal won’t encourage Visa cardholders to use ACH instead of Visa.
- Sounds good to me…Apparently, they’ll continue pushing those without Visa’s to use ACH, but not if you have a Visa.
- Some Paypal accounts allow you to set a credit card as the default payment method, but not all accounts allow it. Hopefully, going forward, we’ll be able to do so, at least with Visa cards.
- PayPal will Join the Visa Digital Enablement Program (VDEP) to Expand Point of Sale Acceptance which will allow will Paypal to expand on their in-store payment processing.
- I never quite took to all these digital wallet schemes, swiping usually ends up easier for me. They also make it a hassle to add cards to some digital wallets, and that’s terrible for those with lots of new cards. Until they stop issuing plastic cards, I’ll keep using ’em. 🙂
- Instant Withdrawal of Money: Consumers will be able to instantly withdraw and move money from their PayPal and Venmo accounts to their bank account via their Visa debit cards leveraging Visa Direct.
- This sounds very interesting. It usually takes days for the money to land up in your bank account, now it’s supposed to be instant if you use a Visa debit card number. Won’t help for those banks who use the Mastercard network for their debit cards.
- Enhanced Data Quality: PayPal will ensure that data provided to issuers and their cardholders for Visa-funded transactions will be consistent with the information that is received with traditional Visa card transactions. This will ensure a better consumer experience, reduce cardholder confusion, ensure proper application of rewards, and reduce costly and time-consuming disputes.
- This might mean that Paypal transactions paid with Visa won’t come up on the statement as “paypal * xxxyyyzzz” and instead it will look like a direct charge.
- Economic Incentives: The agreement affords PayPal certain economic incentives, including Visa incentives for increased volume, and greater long-term Visa fee certainty.
To summarize: Paypal gives up their push to ACH and their specially coded transactions. Visa helps Paypal with in-store transactions, allows them to use their debit cards as bank transfers, and offers incentives for volume.
On a related note, I’ll mention that while I have no love for Paypal, I’ve been using Venmo, a Paypal company, for some time now to send money to friends, and it works beautifully. For months, I’ve been waiting for the ‘Paypal-headache’ to hit me, but it never did. So weird how the same company runs different policies on different payments websites.
Venmo is also much quicker than Paypal, in my experience, to get the money to your bank. Of course, going forward, if you use this new Visa debit option with Paypal or Venmo, it’s supposed to be instant.
Hat tip to pymnts.com
Chuck, I don’t see how this would improve the situation for Amex offers. The “enhancements” seem to be for Visa only.
Good point, not sure what I was thinking. Let me delete that part, thanks.
Hi Doctor, I purchased an ebay item, got the refund to ebay gift cards. I shredded the cards and do not have the codes anymore. I could not see the gift cards code in paypal account. Ebay could not help me. I called ebay and paypal six times. Nobody can help me. Any suggestion?
This is a big problem. Only thing I can think is to try escalating the issue with eBay (ask for supervisor, etc.). Otherwise, maybe try a CFPB claim.
https://www.doctorofcredit.com/keep-track-gift-card-orders-ebay/
Using paypal for any ms any some non ms will get your paypal acct shutdown (from various sources YMMV)
I don’t understand how you use a debit card, presumably hooked to your Bank Account to transfer money from PayPal to the bank. Do they mean using a PayPal Debit Card to transfer money to your bank? I don’t get it.
The way Square Cash does it is it’s processed as a “return” to your debit card.
Glenn, the bank will see it as if you got a return to your account, so they’ll add the money to the bank account.
Using debit cards online in any way to purchase of shop online is just asking for trouble.
Using it to deposit back to your checking account might be safe, if only paypal limits it to that. But using it for purchase (even via paypal) is very risky.
Definitely agree. I never link my debit card to anything and totally refuse to use these services, however, I have to admit I did in fact do this awhile back BUT ONLY w/ throwaway credit unions linked and barely any money in it. I dont even do that anymore.
sorry to ask the obvious, but would this mean pin-enabled gift cards could be drained to a bank account via paypal?
Not sure how that would happen?
I think there’s a misunderstanding here. You can immediately transfer money from PayPal to your bank account if you give PayPal your bank’s Visa debit card number. You can’t transfer money from any Visa debit card to your bank.
Worried that “Enhanced Data Quality” could close some loopholes like 5x Ink on PPDG, etc 🙁
Ooh, didn’t think of that…
Great, more ways for Paypal to flag and lock your account for using it’s advertised features.
I use Cash.me (a Square company) for person to person transfers. In my experience it’s faster and easier than Venmo – money goes immediately in and out if the proper accounts.
True, Square is fast. I just never got used to their system. It’s different than a traditional account.
They allow you now to have a Square Cash balance like a more traditional send money account. So instead of hitting your debit card immediately they hold it somewhere.
I don’t use it as that would defeat the reason I use Square Cash–to meet the 12 debit card transaction requirement for CCU.
Everyone should understand the risks of having technology deeply linked to your bank accounts. I dont use any of those ridiculous services even though my friends think im some old fart who still uses the pony express to send money. No. Its because I know its hacked. I offer semi anonymous securely encrypted BTC or ETH but their eyes gloss over. Wonder why.
When was the last time your bank account was hacked?
He’s worried about his bank account being hacked but not his fake money btc or the bitcoin ‘dealers’ being hacked. lol