Paypal ‘not able’ to comply with new EU Law
Jane Bell is one of the top eBay Education Specialists in Brirtain and provides consultancy to a host of eBay businesses. Today she looks at PayPal:
Watching BBC Breakfast news this morning, it’s been reported by Paul Lewis of BBC R4′s MoneyBox that Paypal is unable to comply with the new EU law requiring electronic bank transfers to arrive in the recipients bank account by the following day. Paypal say they will not have the system in place until later in the year so it will still take 2-3 working days for money to transfer. Paul Lewis advised people who have complaints regarding Paypal (who declined to comment on the programme) and these later payments should contact the Ombudsman. Pod cast of programme here (article 6:35 in Paypal 11:38 in)
I have to ask why Paypal didn’t get this sorted out in time and why they should be the exception to the rule of law? I can’t think of any excuse, if other financial businesses managed to sort it in time why haven’t Paypal? Oversight? This just isn’t good enough, perhaps the amount of interest they will gain by late implementation of this should be forfeited. I would be interested to see what happens on this one and if anyone claims compensation via the Ombudsman. Rather embarrassing for Paypal methinks.
Update, Monday 9th January 2012, 14:56pm.
This comment was supplied to us by PayPal today:
PayPal customers can already send money between PayPal accounts almost instantly – these payments already go well beyond what is needed under the new rules.
For payments outside the PayPal system, we’ve already implemented changes across the EU, except in the UK, that meet the new European standards for faster payments.
We are in the process of implementing Faster Payments in the UK, to allow PayPal customers to move money from their PayPal account to their bank account. Of course PayPal will only be able to use this method of transfer when the customers bank supports Faster Payments – a number of UK payment service providers are not yet able to receive Faster Payment transfers.
Within the UK, the process of implementing Faster Payments has been more technically challenging, which unfortunately has delayed our launch. However, we are planning a phased launch later in the first half of 2012.
The way we are implementing Faster Payments in Britain is significant. We are in the process of becoming the first ever “Direct Agency” member of the Faster Payment scheme. This will mean that although PayPal is not a UK Bank it will give its UK customers the same almost instant real time money transfers to bank accounts as offered by UK banks in the Faster Payments scheme. Other organisations use the Faster Payments system in a different way, delaying the transfer of funds by a number of hours. PayPal took the decision to be the first non-UK bank to provide near real-time transfers to give our customers the best possible experience. Unfortunately building and testing this has been significantly more complex and lengthy than expected, which is why we have not met the January deadline. However, we are working very closely with the Faster Payments scheme and our sponsor bank to complete the project, while ensuring the system works well given the large volume of payments handled by PayPal on behalf of its 14m UK customers. It will also mean that PayPal customers enjoy a far faster service than the new rules require.
We have explored other options in order to meet the January deadline. Unfortunately, using Britain’s traditional faster payment service, CHAPS, is not practical given PayPal’s scale – CHAPS is designed to handle a small number of high value transactions, rather than PayPal’s large number of relatively small value transactions.