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To: Doug Soon who wrote (140933)	3/26/2002 11:10:36 PM
From: Glenn D. Rudolph	Respond to of 164684

"Thanks much for the very thorough review on Paypal. How does Paypal get paid? Do they charge the buyer and seller a fee? Any fees would be in addition to the usual VISA fees that are charged to the seller wouldn't they?" There is only a fee for the seller. Paypal is actually a charge card processor so the transaction fee and discount rate is all they get. They are no different than the processing firms for brick and mortar retail firms except the transaction takes place on-line. There appears to be little negotation available as to the fees both the transaction and the discount. They have two fee structures. One does not have a transaction fee and it is a lower about 1.5% discount fee for "large volume" users. That is defined I believe at $10,000.00 per month. Thos with lower volume pay 60 cents per transaction and a discount fee of 2.5%. It is a little different world than in the competitive environment for processors for non on-line business. Most will negotiate a fee based on total volume and average ticket price. There has to be at least 50 if not a 100 competing firms firms for regular business. This gives the seller or in my case the retailer, some negotiating leverage. My rates through my regular card processor are far lower than Paypal or Billpoint (eBay Payments). We try to get our customer to call our toll free number with their credit card. Even though we are paying for the call we are way ahead. Most people on eBay do not have regular stores with a basic card processor with which to compare. These sellers do not know that Paypal and eBay payments are pricy. That goes for Yahoo pay direct too. To make sure I was clear, the usual "VISA fee" is the discount rate. True for Mastercard etc. I do want to point out there is some reasonaing for these on-line processors to take a larger fee. They clearly are taking more risk by possibly handling insolvent or fraudulent sellers as well as buyers using fraudulent cards. Someone has to pay for that<G>