Quote:
Originally Posted by rats60
These aren't remotely close to the same thing. Paypal doesn't make its money off fees. When they started out, everything was free and they said their profit came from holding people's money. With the increase of rewards credit cards, credit card fees became an increasing expense and so they moved to collecting that fee back from the user. When you pay with paypal friends and family, you have to pay from your bank account, which costs paypal nothing, or the sender pays 2.9% + .30. .30 is the swipe fee which goes to the credit card company. The % is negotiated between paypal and the CC processor. I don't know what if paypal pays that, but they do pay most of it on rewards credit cards. I have a CC that gives me 3% back on paypal, so if I pay with F&F and add 3%, it is a wash. If I pay with goods it is still a wash. Paypal is out very little if anything and on F&F they don't have to worry about fraud. If Paypal does away with F&F, I could care less, I am never paying the fee. It is Paypal charging me 3% to cover the charge from the CC company for the CC company giving me 3% for using their CC.
Ebay is a completely different matter. They make their money off final value fees. Most people are getting free listings, getting to advertise their cards for free, doing a deal off ebay is costing them all of the income from you using their platform. For the seller, they should price their item with the fees built in. I pay 9% (some pay less) Ebay and 3% Paypal. The buyer should be getting 1% Ebay bucks + 5% CC rewards or 6% off at a minimum. By doing a little work and timing, the buyer should be able to recoup the 12% plus more from ebay bucks, CC rewards, ebates, store rewards, etc. So why would anyone do a deal off ebay and assume all the risk and deny ebay income for using their platform?
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The real money is in the customer data and being able to figure out what percent of people that buy X also buy Y. That way they can more effectively target ads and coupons. Target does lots of data work**, and prints coupons on the back of the receipt. When the kids were small, the coupons for formula
always was there just before the supply we'd bought before ran out. It kept us coming back regularly because the discount was very good. We started going to Market Basket for groceries after they decided to seasonally stop carrying bacon. (And save probably $50-100 a week. )
Any large company that's successful does that now.
Paypal probably sells that raw data with no customer specific info to another company that can use it.
Using F+F removes that data from them.
**
Other examples of this data gathering.
Coke put soda machines that let you mix your own flavors in Wendys and a few other places, then after a couple years was able to select flavors to test in retail based on how popular they were in the machines.
Another Target one. From a friend who works there, but not at the exact store.
Mom comes in with teen daughter, very angry about her daughter getting an ad in the mail for baby registry stuff. After much yelling and carrying on "how dare you send my kid baby registry info!!!" while the daughter is mostly quiet, eventually
"Ummm Mom.... they aren't wrong"
The registry ad was sent right near the end of month 3... when chances of early problems were less.
The computer had figured it out based on previous purchases, which included among other stuff, a pregnancy test followed by certain vitamins within a particular timeframe. Both a bit scary and cool all at once.
05-01-2020, 06:49 AM
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