PayPal is no Panacea

Rule-of-Business #1: He that hath the Gold maketh the Rules.
Rule-of-Business #2: There is no Free Lunch.
(Write to me for the other 3 rules).

Until recently, PayPal allowed you to accept credit card payments
for free from most 'major' countries.  As of Jan 1, 2001, you may now
only receive up to $100/month from anywhere "for free".  To be able
to accept more, you must now step up to their "Business Account"
status which charges a $0.30 + 2.2% fee on all credit card incoming
transactions, and a slightly less percent for non-credit-card incoming
transactions.

PayPal allows the sender to send money either from their credit card
(which appears on their statement as a regular 'charge' rather than
a cash advance, which is good), or directly from your bank account.
Your choice.  A recent experience showed me that the sender also pays
a conversion fee if they draw money straight from their non-US bank
account.

I recently needed to receive many hundreds of dollars from someone
in the U.K.  They sent the transaction via PayPal, and without being
notified at the time of the transaction they were simultaneously
charged a "currency conversion fee" from their bank.  The story gets
better.  For other reasons, I needed to refuse this particular payment,
and in doing so the sender was again charged a conversion fee to undo
the transaction that materially never happened.  In retrospect, this
makes perfect sense that this would happen with those banks that would
charge for foreign currencies anyway.

But what about credit card payment?  Does Visa/MasterCard ever charge
conversion fees?  Are conversion fees dependent on the issuing bank?
Perhaps as an experiment, someone from a non US country can send $1 via
their credit card through PayPal, to a US PayPal user, just to see what
charges appear on their statement next month.

You really can't get cranky about PayPal's new policy.  How long could
anyone expect a free currently exchange/transfer mechanism to remain
free for very long?  Obviously the free period was to generate
customers and to beta test their software.

Karl Ellison