PayPal have announced some changes that will affect their US customers, although we can also expect them to roll this out on a global basis shortly after.

Here are their announced changes. It goes without saying that sellers are livid about the latest changes, as they will start incurring significantly more fees.

• We’re removing the flat rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States and introducing a new variable fee of 5% based on the amount you send with a minimum of $0.99 and a maximum of $4.99 per transaction. We’re also removing any variation depending on the recipient’s country. 
• We are changing the currency conversion spread to 3.25% over a base exchange rate in situations where you are a sender of money in a PayPal transaction.
• We’re changing how we treat refunds. If you refund (partially or fully) a transaction to a buyer or a donation to a donor, there are no fees to make the refund, but the fees you originally paid as the seller will not be returned to you.

As you will have noticed, the biggest issue is that when someone requests a refund (which in some businesses happens quite frequently) you, as a seller, will not be refunded the PayPal transaction fee. This is a hard hit for sellers and there are various petitions asking PayPal to reconsider.

Of course, PayPal will totally ignore those requests and go ahead with the changes. The company does not really care what its users think as the bottom line is it still has no serious competition. It’s a maddening situation but PayPal users ultimately have to bear whatever PayPal decides to implement.

Withdrawing your funds from PayPal to a debit or credit card can be annoying if you have significant funds. The reason is that you can only withdraw up to $2,500 at one go, and every time you make a withdrawal you are charged $2,50.

So let’s say you need to withdraw $50,000. You will need to go through the withdrawal process 20 times for a total cost of $60. This sounds ridiculous; a time-wasting activity and also a money-grab by PayPal. It is, there’s no other way of looking at it.

The other way of withdrawing is to send the funds directly to your bank account. There are no limits when compared to withdrawing to a card. Sounds like we solved our problem right?

Well, not so fast.

If your bank account is in a different currency than the funds you have stored on PayPal, be prepared to lose a significant amount of money due to PayPal’s horrible exchange rates. PayPal does not let you send, say, USD directly to a EUR-denominated account. This is a limitation on their end, and I suspect an intentional one to fleece their users. There are no such limitations when using other payment gateways such as 2Checkout.

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All you need to do to access the IPN history in your PayPal account is to login to the account and then click this link.