PayPal Inc. has changed the way it charges users, basing its fees on the reason for the payment rather than the type of account.
In a June announcement, the eBay Inc. payments unit emphasized that it would no longer charge business users for person-to-person payments. The flip side of that announcement, which has only recently come under scrutiny, is that personal accounts are now being charged for business transactions.
PayPal previously imposed charges for all transactions on business accounts, but only some payments on personal ones; people sending payments from a PayPal account must now classify their transactions as either a personal or a business payment. Those that are classified as personal incur no fee (unless paid by credit card), while those classified as business incur the fees PayPal has typically charged to merchants.
The change means that there is now little to differentiate business and personal accounts.
"There is no difference anymore," Charlotte Hill, a spokeswoman for the San Jose company, said Tuesday. "If you're a PayPal customer, you're a PayPal customer."
Heinz Waelchli, PayPal's director of product marketing, wrote in a June 19 post to PayPal's blog that the change was implemented to make it "easier for you to send and receive money between your family and friends," but he did not explicitly say that some users might pay more under the new setup.
On Aug. 9, a comment appeared under that post from a consumer named "John" expressing frustration at being pointed to that post for details on the fee changes: "So this is the 'announcement' you made for the new fees? You've made no comments on it what-so-ever."
Waelchli posted a clarification Monday, including a link to PayPal's updated terms of use, but still focused on the payments that would not be charged a fee.
"Prior to the updates, some people were charged a fee to receive personal payments because of the type of account held by the receiver," he wrote. "We didn't think this was fair, which is why [we] made this change."
For business customers, "we continue to charge a fee," Waelchli wrote. "This is how PayPal's business model works and how we can continue to offer our service."
The fee changes was the focus of an Aug. 7 article in PC World that characterized the fee change as sneaky. Jared Newman, who wrote the article, said he used a personal account to receive payments for his writing, and noticed the change only after the fees had been assessed.
"What's really infuriating is that there was no warning about these new fees, and no notification once they were instated," Newman wrote.
