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PayPal to add a $20 ANNUAL Inactivity fee!

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questccg
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I just got the latest "Terms & Policy Updates" and as of September 2021, PayPal will be charging a $20 ANNUAL Inactivity fee! What does this mean??? I don't know... But I think it's probably VERY STUPID. All I need to do is send $0.01 to somewhere and I save $19.99 for the ANNUAL Inactivity fee...?!

I don't understand why everyone wants to charge us ANNUAL fees like the Credit Cards, Banking Statements, and other PAYMENT-related entities. To me it's a freaken GORGING because they are already making a TON on monies on our money and/or credit balances...

Ridiculous.

I Will Never Gr...
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This went into effect in 2020 ..

From PayPal's help articles;

"Notifications to inactive accounts began on 30 September 2020 and advise simple actions to take before 16 December 2020 to avoid the fee:

- Log-in to your account; or
- Shop wherever PayPal is accepted; or
- Send money to friends & family, or vendors for goods & services; or
- Withdraw money from your account; or
- Donate to a charity with your account"

so really .. just log in once a year and you're considered active.

questccg
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I was wrong it is November 2021

I Will Never Grow Up Gaming wrote:
From PayPal's help articles;

"Notifications to inactive accounts began on 30 September 2020 and advise simple actions to take before 16 December 2020 to avoid the fee:

- Log-in to your account; or
- Shop wherever PayPal is accepted; or
- Send money to friends & family, or vendors for goods & services; or
- Withdraw money from your account; or
- Donate to a charity with your account"

so really .. just log in once a year and you're considered active.

Quote:
Effective: November 20, 2021

We are introducing an annual account inactivity fee of $20 CAD.

Doesn't say anything about "logging-in only" or what they consider to be "inactivity" either...!

https://www.paypal.com/ca/webapps/mpp/ua/upcoming-policies-full

I Will Never Gr...
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\-O-/

They enacted this fee last year for most of the rest of the world, Canada was delayed (for whatever reason).

The list I quoted above is *their* list of actions required (any one of those) to be considered active.

In addition to that, according to news sources, "PayPal says it will consider the account to be inactive if the user hasn't sent, received or withdrawn money, or logged in for a year or more. Customers who don't have money in their PayPal accounts won't be charged, no matter how long their accounts have sat dormant."

I'm just quoting news sources and PayPal's help center pages.

larienna
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Well for me, I have a more

Well for me, I have a more important issue with Paypal. I can't login because they now force people to have a mobile phone linked to the Paypal account in order to send SMS authentication code. And I don't have a mobile phone.

So it seems I'll have ask them to close my Paypal account since I cannot do it by myself.

The timing is very bad, as I wanted to use Paypal to sell my Play Station one video games. So I'll have to find another digital payment method unless they decide to revise their policies.

X3M
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No problems here

I pay monthly for things through Youtube and the Playstore.

larienna
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Well, I think the problem is

Well, I think the problem is when you want to exchange money between 2 people. I used paypal in the past, yes to buy in certain stores like steam. But I also paid board game convention fees, I sued it for board game sales, furniture sales, etc.

If I want to sell video games from my collection on Ebay, I need to have a digital money transfer account. There are apparently many alternatives to PayPal, many have subscription fees. I'll have to do my research and evaluate which one is the best according to my needs.

Or simply hope that PayPal finally offers a non-mobile authentication system. But I would not bet on that to happen.

let-off studios
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Quick Questions

How many people do you know who have a PayPal account that don't use it once in a span of 365 days?

How many times have you gone for anywhere close to 365 days in a row without using your own PayPal account?

Is this really something for you to get all worked-up about?

FrankM
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Like a Gift Card

This sounds like the maintenance fees that used to be common with gift cards in the US. After a year, they would decrease the balance by a certain amount per annum until the balance vanished.

Gift cards are promotional tools, but they also represent "unearned income" that blights the company's balance sheet. The idea of a maintenance fee was that it would allow the issuer to eventually get lost/forgotten cards off their books.

Banks also used to pull a similar trick to get abandoned accounts off their books.

Not sure exactly how the regulations changed, but I haven't noticed any maintenance fees on gift cards recently, and banks now turn their abandoned funds over to the state.

My guess is that someone with too much time on their hands is going to sue and say that PayPal needs to treat its accounts like bank-deposit accounts. There will be a class-action settlement a few years from now, and we'll all get $0.09 checks in the mail.

larienna
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I understand a bit your gitf

I understand a bit your gitf card story.

But for paypal, is there really a cost in leaving the money there?

Banks do the opposite, they give us interest and charge us when you do transactions.

Paypal does not pay interest, and now want to charge us for making no transactions.


By the way, I successfully logged into paypal. It seems that they added a second type of phone authentication that does not use SMS.

FrankM
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Uninteresting

The reason for the gift-card and bank-account maintenance fees doesn't have anything to do with interest, it has to do with holding money that the company has not "earned" in an accounting sense.

In essence, accounting rules treat a gift-card balance as a debt owed by the company. Having a bunch of debt on the balance sheet can mess with the company's credit rating. For a company that issues a lot of gift cards, having the lost ones accumulate forever as an unpayable "debt" can be disastrous.

(If I were to hazard a guess, the deal with regulators is probably that companies can't charge maintenance fees, but they get to write off the "debt" after a certain length of time. The company still needs to honor an old card, but its mere existence doesn't damage the company's credit.)

The accounting rules for banks are different, and a lot more complicated. For them, tiny accounts are a problem because it costs them a bit of money each year to maintain each (reporting requirements, FDIC insurance, fractional reserve, etc.). Regulators told banks they need to eat those expenses for a number of years, then can dump the accounts onto the state.

PayPal's situation is unlikely to be exactly like either of the above, but for some reason they don't want small balances parked in their system indefinitely. From the outside it seems like bank rules ought to apply, but nothing in financial regulation is ever simple.

X3M
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larienna wrote:I understand a

larienna wrote:
I understand a bit your gitf card story.

But for paypal, is there really a cost in leaving the money there?

Banks do the opposite, they give us interest and charge us when you do transactions.

Paypal does not pay interest, and now want to charge us for making no transactions.

By the way, I successfully logged into paypal. It seems that they added a second type of phone authentication that does not use SMS.


It costs me money to store my money at the bank this past few years.

I Will Never Gr...
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Interest??

larienna wrote:
I understand a bit your gitf card story.

But for paypal, is there really a cost in leaving the money there?

Banks do the opposite, they give us interest and charge us when you do transactions.

Paypal does not pay interest, and now want to charge us for making no transactions.

I think it's been at least 15 years since I've seen interest paid to my bank account but I've most certainly been paying them about $10 a month for the privilege of having my money moving through there (even if I make zero transactions). :/

I would say there likely *is* a cost to PayPal to hold money, if only in data storage and upkeep. It does seem stupid to charge a fee for inactivity, but if all it takes is logging in once a year, it's not very onerous on the users end.

larienna
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Tangerine stills gave you

Tangerine stills gave you interest ... before the pandemic. Now the interest are ridiculously low. But they don't have maintenance fees, or minimum amount.

It's a bit ironic, there is some local story where I live than in the past, people did not trust bank and stored money in their wool socks. Now since they introduced all sort of fee to keep your money, which was not there 40 years ago, the wool socks seems like a good solution now if you have a small amount of money.

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