Negative Changes To PPBDC On October 19th, 2016 (Debit Transactions To No Longer Earn Cash Back) – Paypal

Paypal has announced that they will be making changes to their user agreement on their Paypal Business Debit Card Agreement. These new terms will go into effect on October 19th, 2016.

Of interest is the following:

Eligibility. To be eligible for cash back:

  1. You must have a PayPal Premier or PayPal Business Account, and you must have enrolled in the cash back program.
  2. Your Debit Card purchase must be authorized as a credit transaction and processed via MasterCard.  Some merchant locations offer you the option of choosing “Credit” or “ATM/Debit” when making a payment. To qualify for cash back, you must choose the “Credit” option if shown at the merchant location.
    1. Transactions eligible for cash back include: Credit transactions which you sign for and which are processed via MasterCard; online transactions processed via MasterCard; and phone transactions processed by MasterCard.
    2. Transactions that are not eligible for cash back include, but are not limited to purchases processed via a debit network (including PIN-less debit transactions); cash withdrawals; and cash advances.
    3. Please note that merchants ultimately determine whether to process your Debit Card payments as credit or debit transactions, and PayPal has no control over the merchant’s selection.

This means that if the transaction isn’t processed as a credit transaction, you won’t receive cash back on these charges. A lot of companies (e.g RadPad/Plastiq) offer lower fees for debit purchases because they are charged a lower fee by their payment processor. This means that the card issuer (in this case Paypal) also receives a lower interchange fee (due to limits on what fees can be charged on debit purchases because of the Durbin Amendment), prompting this change.

It’s likely that Paypal were happy to lose money on some transactions, as they were making enough money on the transactions processing as credit and this is no longer the case due to the volume of these debit transactions. Earlier in the year Paypal also made it so that PIN-less debit transactions wouldn’t earn cash back as well.

Hat tip to reader Vic J & /r/churning

 

Subscribe
Notify of
guest

11 Comments
newest
oldest most voted

Ted
Ted (@guest_314305)
November 10, 2016 23:46

Datapoint: I had a RadPad transaction charged on 10/18, but the receipt date & transaction date on paypal shows 10/19. I received an email on 11/4 saying cashback this month would be delayed and I received my 1% cashback earlier today (11/10).

Ted
Ted (@guest_314306)
November 10, 2016 23:47

Correction: Should be Plastiq, not RadPad.

Jason
Jason (@guest_312214)
November 4, 2016 11:56

Some suggestion. maybe it’s better to replace or add the keyword paypal on the subject because I run the search today using keyword paypal but couldn’t locate this post. I had to go google and came back to this post and realize now it used PPBDC at the first place.

Anyway, the effective date was 10/19 but I done $1000 bluebird load at the beginning of October, haven’t seen the pay-out as of today 11/4. I still keep loading BB with PPBDC, one $200 transaction on 11/2, login to account today and seeing current earning this month is $2, and the description says Debit card signature purchase. That being said, it looks like it is still working to load BB. Maybe I have to wait next week for the bonus posted for October’s BB loading.

Jason
Jason (@guest_314126)
November 10, 2016 12:04

Confirmed that PPBDG load to BlueBird still gets Cash Back for transactions before and after the effective date 10/19. Cash back posted today for Oct and Cashback for this month counts towards 1% for BB loading: Debit card signature purchase. So I assume loading Serve is also getting cash back since it is the same platform as BB.

JASON
JASON (@guest_316804)
November 18, 2016 16:51

Confirm that loading into BB and Serve still earns 1% for this month (November)

Nov17
AMERICAN EXPRESS SERVE|8009540559|FL Debit card signature purchase $200.00
Nov16
AMERICAN EXPRESS SERVE|8009540559|FL Debit card signature purchase $200.00
Nov07
BLUEBIRD|8774865990|FL Debit card signature purchase $200.00

Jason
Jason (@guest_323417)
December 5, 2016 15:49

Paypal posted cash back $20 on 12/4 for my November load on BB and serve

Max
Max (@guest_295902)
September 16, 2016 10:05

Hey,

I’m not sure why they added this to the T+C now, this seems to have always been the case. Paypal never gave me any cashback unless the transaction was processed as credit, if i ever had to enter my pin, I was not credited with any cashback in the past (I’ve been using this card for 2+ years) I think they more or less just added this in writing. This has been the case for quite some time

Chuck
Editor
Chuck(@chucksithe)
September 16, 2016 13:42

The thinking is that now even online debit transactions won’t work anymore, like Radpad, Serve, etc.

I’m not positive it’s true, but it might be.

Jason
Jason (@guest_296020)
September 16, 2016 16:41

That’s very true. I use PPBDC to load Bluebird, that’s some easy $10/month. It looks like I cannot do it anymore.

Michael Belisle
Michael Belisle (@guest_295882)
September 16, 2016 09:02

Are you sure it’s a debit transaction vs debit card?