How Much Power Does PayPal Have Over Our Bank Accounts?

Posted on February 29th, 2008. Written by Rico.

An interesting development regarding PayPal was covered by contract-worker.com. The money transfer site reversed the payment to a freelancer after some conflict with the client. This was possible because the client paid the freelancer through PayPal using a credit card.

Contract Worker had some questions about the issue, and generated quite an interesting comment:

Paypal can use their direct debit authority to take money from your bank savings account due to a reversed transaction from your customer

Perhaps Filipinos who depend on PayPal should request that payments routed to their accounts aren’t done with a credit card? The prospect of PayPal affecting our bank accounts is scary, to say the least.

This entry was posted on Friday, February 29th, 2008 at 9:00 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. You can leave a response, or trackback from your own site.

Rico

Rico Mossesgeld is the founding editor of Technograph. Learn more about him at rico.mossesgeld.com/about.

http://www.tongits.net Rico Zuniga

That’s scary. But seems justified since PayPal has a 30 day full money back gurantee. And as a seller you have no choice but to comply. The only solution I can see with this is to not transfer the funds from your PayPal to your bank account within 30 days, unless you badly need the money.

“Perhaps Filipinos who depend on PayPal should request that payments routed to their accounts aren’t done with a credit card?”

I think even PayPal to PayPal transactions are not exempted from this. And besides excluding credit card payments will negatively affect sales.
The Technographist

The victimized freelancer asserted that the credit card company automatically sided with its customer, the client who withdrew his payment despite the completed work. There obviously has to be more protection for the seller!