I used to work for a bank and also work as an E-Commerce Consultant. Hadn't got an e-check payment in a longtime until now and was shocked to see PayPal no longer just charges a flat $5 fee but charges the same fee as when payment is made by Credit/Debit Card.
All Payment Processors for credit cards charge the merchant a fee like PayPal typically in the 2-3% range. This is because VISA, Mastercard, AMEX, Discover, etc charge a transaction fee and this is what is largely making up that transaction fee your bank or payment processor is charging you. The fee is charged to the merchant accepting the payment and it is typically in the 1.8-3.5% range (AMEX typically being on the high end which is why many merchants don't accept AMEX).
An e-check is an ACH transaction (Automated Clearing House). Google it if you want to learn about it. The fee schedule for 2012 for merchants like PayPal is $.000145 per transaction and $144 annual fee. This is why if you setup yoru mortgage payment as an automated debit, you are not charged a transaction fee because the payment is made through ACH which costs the bank virtually nothing. See for yourself: http://admin.nacha.org/userfiles/File/ACH_Rules/2012%20Network%20Admin%20Fees.pdf These are much lower fees than the credit card networks. This why you can earn mileage/rewards on your credit cards but not on the checks you write or the ACH (e-check) transactions you conduct because the network/bank isn't charging high enough fees to pay for the rewards. This is also why debit or check card mileage programs give you much less 'mileage' or rewards as a percentage of the transaction size than credits card rewards program do.
I am completely surprised the government is not regulating ACH transaction fees, or if they are, they are allowing companies like PayPal to charge the same fees on ACH transactions as on credit card transactions as their ACH transaction costs are MUCH lower. This is actually pretty incredible to me.
I thought $5 was a bit high considering you can use your check-card to make a purchase with no fees, but I thought $5 is in the realm of being reasonable for the PayPal convenience. Charging the same fees as credit card payments is in my opinion WAY out of line and probably should be looks at by the FTC.
