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Comment by abalone | Hacker News Reader

The worst mainstream example of this I know of is PayPal.

Their entire business is predicated on steering you away from using your credit or debit card (better for you) to a direct bank withdrawal (better for them).

Bank withdrawals carry a risk of overdraft fees, have fewer consumer protections, and lack the rewards programs and other benefits of cards. But they cost less for PayPal. Merchants don't pay any less though -- it's how PayPal makes money.

Each and every time it defaults to bank withdrawals. You have to hit "Change" to select your card, every time. There's no way to change the default to your card. The only reason for this UI is to steer customers away from their best interests.

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> Their entire business is predicated on steering you away from using your credit or debit card (better for you) to a direct bank withdrawal (better for them).

You're being hyperbolic, or don't know what predicated means. This defaulting to bank transfers is a relatively recent thing in their history; they've been profitable for more than 10 years without that. Their fees are also sufficient to make a profit on credit card transactions, so their business would not fail should everyone opt-out of paying by ACH.

There are reasons for PayPal to want you to use ACH over a credit card beyond simply increasing profits, too. They're just as much victims of credit card fraud as their merchants. It's the card networks' fault that almost anyone in the world can pick up a Visa/MasterCard card, use it to buy something on eBay, then charge back the payment after they get the item. PayPal's the one getting the chargeback, and they're not exempt from the card networks' requirements on maximum chargeback rates. It's an existential threat to their business, always has been.

This defaulting to bank transfers is a relatively recent thing in their history;

I've had a paypal account since before Ebay bought them and they've always used sneaky user interface tricks to push customers into using bank transfers over credit cards. It was the first thing I noticed about them after signing up.

That's right, PayPal has always worked this way. In fact, it's only fairly recently that it let me switch to a credit card without putting up a warning page about all the benefits I'd get by using my checking account instead of a credit card.

I think you're wrong on the facts. PayPal has always steered towards bank withdrawals as long as I can remember.

Your note on chargebacks supports my point: Paying by card is better for the consumer. PayPal's trick UI steers them away from that.

Taking your point, I wonder if honestly would be a better policy.

Credit Cards essentially cost paypal more. A more honest solution might be pricing in the cost of credit card transactions fees and chargeback/fraud risk to the customer. I have no doubt this would be bad for conversion rates. It introduces huge friction, going from 0 cost to small percentage costs.

The way they do it now allows users to segment themselves. If you have a strong preference for using credit cards, it's available. If not, well then paypal does. They choose if you don't.

It's like an opt out system. In a lot of cases, thats a good system. For example, I think organ donation should use that system.

The PayPal equivalent would be if you had to opt-out of organ donation every morning and it never remembered your preference. That is a bad faith system.

I'm no fan of PayPal, but I interpret this as a reflection of the state of the banking industry rather than scummy behavior on PayPal's part. Cards skim a ton off the top and are generally designed to gouge the merchant (i.e. PayPal) so customers remain blissfully unaware and keep using them; banks aren't making much effort to compete with direct transfers, probably because they get kickbacks from debit card use.

That argument would make sense if PayPal charged a lower fee for bank withdrawals. They don't. They "gouge" merchants just the same.

It's literally a case of using UI to steer customers towards a method that's worse for customers and no better for merchants.

I only have my credit card associated with my PayPal account, so I don't even get the option to use a bank withdrawal.

+1. That's the only way to use PayPal as a consumer. If you're just a buyer and not a seller, there's no advantage to you to tell them about your bank account. They make some noise about a sending limit until you verify with a bank account, but I've never had any transactions run into that.

I had my bank account connected to PayPal once, but deleted the association a few years ago. Somewhat surprisingly in the modern world of phantom deletion, there's never been any sign of it reappearing or Paypal trying to use or access it for anything. Each Paypal purchase uses only my credit card with no accidental way to do anything else.

Consequently PayPal make no shortage of effort to get you to add your bank account.

I'm surprised they don't allow people to transfer money to you (and then force you to connect your bank account to get the money).

Every frakkin' time, they have to ask. But whatever, I only use PayPal for donating to charities and other non-critical stuff.

I can confirm PayPal are douchebags in this regard. So much so that I couldn't donate to Lavabit because of it.

In hindsight though, this was probably a good thing. You would most likely have been on an NSA database if you had donated to Lavabit.

Politely, I know you think you're helping people by maintaining awareness of the NSA, but a passing mention of Lavabit on a PayPal thread doesn't warrant a a tangent about the NSA and privacy. It seems kind of obsessive.

Sometimes a cigar is just a cigar.

Can you elaborate on this? Why did the practice of preferring bank withdrawals prevent you from just choosing a card...or paying some other way?

If you've subscribed to some service via Paypal, try and find a way to unsubscribe and stop payments from within the Paypal interface.

You may just end up pulling all you hair out before you find a way to do so.

* Logged in, "My recent activity", clicked a recent recurring payment

* Third line of text on the page: "You can see all of your recurring payments on the [My preapproved payments].". Clicked the link.

* Hair intact.

This assumes your last subscription was in the last 7 days and you know when the money gets withdrawn. Some subscriptions are not monthly, so you end up having to search for a specific subscription you know of to click on to get to the secret My preapproved payments page.

Of course, the polite way of handling subscriptions would be having a link to this page in the menu. Sort of like how there are links to all of the other things you can do.

Does this feature honestly not seem hidden to you compared to the other things you can do on PayPal?

GoDaddy and VistaPrint also come to mind.

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