eBay's PayPal to collect fee on deposits

[MaineDem]

BOSTON (Reuters) - eBay Inc. <EBAY.O>, the online auction house, will start collecting a fee to manage money that customers have on deposit in its PayPal Money Market Fund, the company said in a letter to customers.

PayPal, an electronic payment service with some 87 million customers, sweeps funds that customers keep in their accounts into the money market fund.

The fund currently pays a 7-day average yield of 4.38 percent, the highest rate of any money-market fund in the United States, according Peter Crane, managing editor of IBC's Money Fund Report.

Starting March 1, PayPal will cut that yield by one-quarter of a percentage point to help pay expenses for managing the money, PayPal said in the letter that it started sending to customers via e-mail on Monday. A copy was obtained by Reuters on Tuesday.

http://www.boston.com/news/local/massachusetts/articles/2006/01/31/ebays_paypal_to_collect_fee_on_deposits/?rss_id=Boston.com+%2F+News

[ronnykmarshall]

1. Glad I pulled my $$ out.

[benburch]

2. That sounds fair to me.

I can't see the problem here.

[Egalitariat]

3. I think you're right, but alot of people expect something for nothing***

nm

[Kagemusha]

4. The article is written poorly in some aspects.

There's confusion that can be blamed on reporters... ah well.

[ronnykmarshall]

7. I agree ... pay pal pays almost better than market interest.

But when I saw they aren't FDIC .... I pulled my money out.

ING right now is kicking ass for interest.

[benburch]

8. I run the business through them...

But I build to a small balance that covers the server payments that are due, and don't keep any more than that on deposit there.

[CountAllVotes]

12. try EmigrantDirect

No minimums and presently paying 4.25%. Can't beat it!

On edit and ... no fees and FDIC insured as well! :D

:kick:

[karlrschneider]

14. I second that, I use them too and been very pleased so far.

:D

[ronnykmarshall]

15. Also

HSBC bank.

They have the same rate.

I'm taking all my savings out of the regular banks and moving them into internet banks.

I wish my bank would wise up and do the same.

[CountAllVotes]

16. I see that ING is at 4.75% until April 15th ...

then it drops to 4.02 I believe it is and also early acct. closure penalty it sounds like.

I wish my bank had the rates too, but they don't. I think they are giving about 2.5% at the moment. :(

:kick:

[shain from kane]

5. How can you tell whether the e-mail is legitimate or not?

There are so many phishers on the web, especially using Ebay and PayPal associations, that it is almost impossible to tell what is real or not. I still get e-mails from both Ebay(?)and PayPal(?) trying to update the information on accounts that I closed years ago. I think that their whole system is on the verge of collapse.

[Raine]

6. If they don't use

your full real name for sure it's nothing but a scam. Both EBay and Paypal always say if it doesn't have your real name on it than it's not from them.

[shain from kane]

9. Thanks. I feel so much safer now.

now, where do I get one of those sarcasm symbols?

[Raine]

20. Here's a couple...

:eyes: :sarcasm: Click on the Smilies lookup table where it says "Message Options". :-)

Seriously I was getting that crap continually about updating my EBay and Paypal accounts and I didn't have any account with either of them. I forwarded the stuff to EBay and Paypal and they responded by telling me that unless it had my real name on it it was not from them, anyway that's what theysay. :shrug:

[peacetalksforall]

10. They are going to have to have plenty of money for the lawsuit filed

against them my Tiffany's, I believe. Claim is that E-Bay won't do anything about forgeries. They will need money for lawyers or a new program that reduces loss to victims.

[napi21]

19. They may need to pay lawyers to defend the claim, but

Ebay will win this one. Read the agreement sometime. They are very specific on stating they are a vehicle to put a buyer together with a seller, and cannot vouch for anything that is sold!

I think Ebay is right on this too. "Let the buyer beware" is something no-one should ever forget!

[high density]

11. That leaves a rate that's still pretty high considering savings acct rates

??? I'm not sure why this is news! If people can't stand that cut then they can move their money to an account like HSBC Online Savings or ING Direct.

[Sgent]

13. Not FDIC

but no consumer has ever lost money in a money market fund (some institutional investors have in riskier ones).

They lend money to the US government, foriegn governments (in dollar denominated loans), large banks, etc. The maximum they lend for is 360 days, with the average length being 7 days.

Edited to add:

0.25% annualized fee is very reasonable, and much lower than most competitors.

[pitohui]

17. the fee is reasonable

and the fee for withdrawing money from foreign (asia and european) ATMs is much better than what my other debit card charges, which doesn't give such a good interest rate on savings

in fact i'm probably going to close the other debit card that i used to use for foreign withdrawals because despite the scare stories paypal works as well or better for fewer fees and greater interest payment

i almost don't know how i traveled before paypal, anyone remember those stupid traveler's checks you used to have to fool with

[CountAllVotes]

18. yeah I have them!

and they were absolutely indispensible while I was overseas this summer! None of the stupid ATMs worked!

Without those stupid traveler's checks, I WOULD HAVE BEEN SCREWED!

:kick: