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Paypal is changing policy?

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May 19, 2004
Messages
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Hello,

Can someone explain in layman's terms to this ole blue collar country boy, how pp is changing in March and how will it affect our using pp? I got an email saying that starting in March my account will become a "Paypal Cash Plus account"? What does that mean? I knew my account is tired to/backed by my a bank account I have. You had to do that IIRC to go over a certain limit but what's this new change they want to do? They tell you that if you don't like it, quit! close your account!

I need help from all you accountant/lawyer/CPA types.

Thanks.

Vr
Mark T.
 
It doesn't really make sense to me either. Looks like it's gonna work virtually the same as before, just 2 separate accounts for some reason. I tried researching the new government regulation to see why they're changing things, but it just looked like a bunch of gibberish to me. So I don't know if what Paypal is doing is supposed to be for our benefit or if they're just trying to side step the new regulation somehow.
 
It doesn't really make sense to me either. Looks like it's gonna work virtually the same as before, just 2 separate accounts for some reason. I tried researching the new government regulation to see why they're changing things, but it just looked like a bunch of gibberish to me. So I don't know if what Paypal is doing is supposed to be for our benefit or if they're just trying to side step the new regulation somehow.

Thanks
I guess I wasn’t the only one who was confused by it.
Being generally suspicious of any business or bureaucracy I’m sceptical that pp would do anything to “benefit” us but who knows. I guess we’ll find out in March.

Take care

Vr
Mark T.
 
I think it really only affects you if you keep funds sitting in Paypal, rather than either instantly spending it (like knife guys do) or transferring it to your bank account. Basically since by you holding funds at Paypal they are acting like a bank and the FEDs want them to really be like a bank in that case.
 
The way I understand it is that you will no longer be able to use money in your Paypal (balance) account to make purchases. You can still make a purchase with that account, but the money would have to come from your bank account/card linked to the account instead of the money in the Paypal (balance) account. So I'm guessing that when it kicks in, if you want to use the funds in the Paypal (balance) account to make a purchase, we'll need to make that purchase using the Paypal Cash account, which can withdraw/transfer money from the Paypal (balance) account. Just seems goofy to me.
 
It occurred to me that one thing to keep in mind if you choose not to have a PayPal Cash account .... if you choose to just keep a personal account, you will need to immediately transfer any funds received to your linked bank account. For some people (like me), any funds I receive for a sale of a knife ... I keep in my PayPal account until the buyer receives the knife and is happy with it. I then transfer the funds to my bank account ... putting my PayPal cash balance back to zero. I do this so if there is a problem, I can immediately refund the buyer. Since I will choose NOT to have a separate PayPal Cash account, I will need to immediately transfer the funds to my bank after a sale. If there is a problem where I need to refund the buyer ... it could take a little longer for the buyer to actually receive the refund, since PP would need to request funds from my bank before the funds return to from wherever they originated (PP balance, linked bank account, or linked CC) . I don't see this as a huge deal ... but something a potential buyer would need to know to prevent misunderstanding / confusion.
 
Ok, I’m starting to understand it a little better now but I wonder...

Since it takes 3-5 days (closer to 5) to transfer funds from your bank account to pp will that time be shortened?
Just wondering.

Thanks again for all the good responses.

Vr
Mark T.
 
From PayPal's explanation, it looks like the day-to-day experience of a user is unlikely to change. PayPal is doing this in order to become compliant with a new "Prepaid Rule" or "Prepaid Card Rule" issued by the Consumer Finance Protection Bureau, which covers mobile wallets like PayPal and Google Wallet, and which goes into effect on April 1, 2019.

The new rules are mind-numbingly long and boring. They have been in the works for a number of years now. Here is an Atlantic article from 2016 that describes the basic gist (although some of the specifics may no longer be applicable). Here is a more recent article on the final rule.

So, in summary, unless you're a regulatory compliance nerd, there's not too much to be interested in! Except it might be interesting to see how these supposed stronger federal protections for account holders play out in the real world.
 
Paypal emailed me, nothing much to add but they are requesting me to open a Balance Account to use my Paypal Balance. If you have some
Private money (knife money) as I do then you will need to:
1. Add your identification information
2. Open a Paypal Balance Account
Pretty much that is.
:cool:
 
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