Digital Transactions Authoritative, insightful and timely information for payments professionals
PayPal Holdings Inc.’s Pay After Delivery service will end April 19 for U.S. buyers.
San Jose, Calif.-based PayPal included notice of the discontinuance in recent emails to account holders about the latest changes to its policies, and through a posting on the PayPal Web site. With Pay After Delivery, which launched in 2014, PayPal did not take a buyer’s payment until 10 days after the purchase, but the company paid the seller immediately. Buyers were required to provide a bank-account number for a withdrawal to fund the purchase. Accounts funding payments to a foreign seller would not be debited for 14 days.
A PayPal spokesperson did not answer directly when asked why the service is being discontinued for U.S. buyers, but noted that it isn’t going away entirely. “U.S. merchants will still be able to offer Pay After Delivery as a payment option for customers buying from Australia, Canada, France, Germany, Netherlands, Spain, and the U.K.,” the spokesperson says by email. “We apologize for any inconvenience this may cause, but eligible customers can apply for PayPal Credit, which gives them the flexibility to pay for their purchase now, or pay over time.”
Stamford, Conn.-based Synchrony Financial last November became the exclusive provider of loans through PayPal Credit, PayPal’s consumer-finance program.
PayPal would not disclose usage data for Pay After Delivery. But online-payments researcher Rick Oglesby, principal at Mesa, Ariz.-based AZ Payments Group, tells Digital Transactions News that he believes “usage was obviously very low for them.”
“Since PayPal already offers buyer’s protection, Pay After Delivery offers little utility, makes the transaction more confusing,” Oglesby says by email. “It’s really just a case of too many options.”
In another change effective April 19, PayPal is scrapping variable-rate pricing for sending money to family and friends outside the United States with PayPal accounts, and will instead charge flat fees of $2.99 or $4.99, depending on the recipient’s country. That pricing applies to payments funded with a PayPal balance or a bank account. Payments funded with a credit or debit card, or PayPal Credit, will be charged 2.9% of the amount, plus the recipient’s flat country fee and a fixed currency fee.
PayPal also said it will soon be rolling out its Instant Transfer service for business accounts. Customers who want to transfer money from their PayPal business accounts to a bank account using a Visa or Mastercard debit card will be charged 1% of the transferred amount. Consumers with personal or so-called premier accounts can do similar instant transfers for 25 cents.
