Digital Transactions Authoritative, insightful and timely information for payments professionals
In an effort to make amends to sellers that were affected by its recent service outage, PayPal Inc. will credit all seller transaction fees incurred between 12 a.m. and midnight Pacific time tomorrow. Accounts eligible to receive the credits, which PayPal will distribute by Nov. 25, are premier and business accounts anywhere in the world except 17 countries in Europe, including Germany, Italy, and the United Kingdom. PayPal says it will run separate programs in those countries to reward users. The fees will be automatically credited to eligible accounts on all domestic and cross-border payments, including those performed with e-checks on the automated clearing house. PayPal, a unit of online auctioneer eBay Inc., is not limiting the amount it will credit any account but is excluding fees charged for withdrawals, currency conversions, chargeback settlements, and shipping. The total amount earned in credits tomorrow may well total more than $1 million. PayPal in the third quarter took in an average of $1.8 million a day in various transaction fees worldwide. A PayPal spokeswoman will not comment on how much the company expects to rebate in transaction fees. “We don't expect it to have a material impact on our business,” she says. The credit to sellers is an effort to mend fences after the San Jose, Calif.-based online processor sustained six days of intermittent outages earlier this month, affecting the ability of buyers and sellers to complete retail and auction transactions and of PayPal cardholders to withdraw funds from their accounts at ATMs (Digital Transactions News, Oct. 12 and 14). The outage, caused by problems with new code the company installed, drew protests from steady PayPal users and dented the company's reputation for reliability. Separately, online song merchant Napster LLC earlier this week agreed to accept PayPal for music downloaded from its service. A unit of Santa Clara, Calif.-based Roxio Inc., Napster says it will continue to accept credit and debit cards as well as payment based on its prepaid cards, which it sells in retail locations in the U.S. and the U.K. Napster sells single tracks for 99 cents as well as albums from $9.95 and monthly subscriptions for $9.95. PayPal last December introduced new, reduced merchant pricing intended to encourage online song downloads (Digital Transactions News, Dec. 9, 2003).
