Paypal ending "Funds Now"

[rideswings1]

I got an email from Paypal that they are ending Funds Now. Anyone know how this is going to affect me?

"We hope that you enjoyed the benefits of the Funds Now program but, unfortunately, we regret to inform you that this program will cease within the next 60 days.
 
We are continuously evaluating the services we offer and have decided to retire Funds Now and to replace it with an improved program which will launch in the near future.

Further details will follow closer to the launch date including the benefits and eligibility for enrollment.
 
Thank you for being a valued customer."

[Wellnesscn]

I think they are just notifying all their users that they are retiring the service and replacing with something new in next 60 days. Correct me if I’m wrong please. Thank you

[busydude]

From what I've learned Paypal does not have a replacement for Funds Now before they are retiring the service and it's features. This is very problematic for merchants that have utilized these features to grow and maintain their business. As of this writing my notice is 30 days that the service will not be available for me.

This leaves some questions.

How will transactions that occur before the retirement be treated should a dispute (for example) occur after retirement notice date?

Will the new product service that replaces Funds Now be ready before Funds now is retired (my understanding is no)?

Can Paypal extend the Funds Now service continuation to satisfy merchants until the new program and terms are available?

I have discussed issues of the retirement of Funds Now with Paypal Technical Support and they were unable to give any information about the upcoming program. No information on timeline of launch time, No information on changes or features of a replacement product.

As such, if you rely upon the funds dispute protection (the major reason we needed the program) then you may need to adjust your business sales practices (limit card transaction size to something you're comfortable losing to be held during a dispute) or consider other service offerings for card processing or payment systems. This change for us has Shifted both funds acceptance by cards and who will be processing cards for us in the future. At this juncture that is.

[PayPal_JonK]

Hello @busydude, @Wellnesscn, @rideswings1,

Thank you for you interest in our Funds Now program. As of the date of this post, no new information has been released regarding a replacement program for Funds Now. Once Funds Now has been retired on your account, normal Seller Protection would activate in it's in place, regardless of when the transaction was received during when the Funds Now program was active on your account. You can read more about that here: PayPal Seller Protection . 

Apologies for any inconvenience this has caused,

 - Jon K

[Plabels]

It's ridiculous that a buyer can open a case for "item not received" only 4 days after placing an order (eBay is time limited for example). It's even more unfathomable that there is no way to respond to a case other than to initiate or default to refund. No way to give any input for "review". It's unacceptable that the only complaint escalation procedure to management is a call back in under 11 days. It's no wonder eBay gave PayPal the heave ho, after they said to me so many complaints about how PayPal handle things.

[digitalmediacs]

Use something different or go with a merchant account that provides a lot different options. I don't understand why people us Paypal as their main processor anyways especially since they are not a bank and your money is governed differently. I use Paypal as a "alternate" option but always viewed it as a second class option. Go with a bank and you have a lot more recourse, sure you will have to pay for it but if it is such an issue, you shouldn't have a problem paying for it.

Banks as long as you have your TOS in place and follow it you can dispute and give your response and if you did everything, you won't be liable unlike Paypal that will always favor a customer because they have to follow different rules or they won't be able to service these accounts.

[busydude]

Having solid TOS in place is required for proper business, and protects you with any merchant account. The part of funds now that is no longer available when the program ends is the financial protection it provided in the event of either a Paypal disupute or a Chargeback. During either one of those situations, the money would not be pulled from your operating account during the dispute. This is different from all other merchant accounts. All other merchant accounts will immediately remove the money from the account that they make deposits in, and they keep it through the duration of the dispute. No a big problem is we're talking small transactions, but say you have a 10k sale, that changes everything. Take the following example to heart:

I sell a product online at retail 10k, have a modest 20% markup on that item, so profit is 2k. Item is delivered to customer, I then replace that item for stock, at cost of 8k, to do it again. A chargeback is filed on the item you sold for 10k for any number of reasons. A traditional processor will then remove the 10k from your account while the dispute is open. You lose 10k worth of operating capital for around 90-days, and the further insult is you've also invested another 8k in replacement product. Now how was that 2k profit sounding now? Not good.

Without a tool like Funds Now, you have to take the risk with your operating capital, decide on how much risk you are willing to take. For the more expensive items, you have to use traditional payments, like cash, check, wire, ach. Not every customer can afford to make a large purchase at once, and may need the credit card, which helps you sell now as well.

I actually structured two e-commerce web-pages that I'm using to Paypal exclusively with for processing (Payments Pro and regular Paypal) and enabled products to allow full purchase of items up to 30k in value. With this program ending, I have to restructure all large ticket items back to how I operated with the traditional merchant account. Limiting sales to 5k and below a card is possible, and beyond manual payment method only.

Due to Paypal's removing of this program without a proper replacement (even at a fee, which I would be glad to pay for the protection) we will be removing Paypal completely as the processor and no longer accepting Paypal alternatively either. This change will sharply be executed at the end of this FY. I will go back to Auth.net

I also had extensive issues with Paypal buttons on another website I operate, that system is falling apart and Paypal has labeled it Legacy, and I can tell you they don't provide any fix support for issues you uncover any more. So it'll be replaced with an e-commerce website by the end of the year.

It very much appears that Paypal's usefulness has ended and I can't see how they are going to be sustainable.