Paypal payment guide -NOT as 'instant' as you may think

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Despite Popular belief, paypal is not always an INSTANT funding method, and thinking that it is may lead to dissapointment in some cases.
Paypal offers 3 different types of funding methods in Australia:
- Credit Card
- Instant Bank Transfer
- eCheque
and how quickly the funds are available to the seller, varies heavily on the payment method chosen.

Credit Card
Credit Card is by far the safest and quickest method to pay by if using paypal. A credit card payment will deduct instantly from your available ballance, and will be posted instantly to the sellers paypal account...... What you may not be aware of however, is paypal has the ability to hold funds from release in the sellers account, which means even though you have paid, the seller may not be able to access funds for a period of time determined by paypal. The other thing to remember, is the seller still needs to withdraw those funds from thier paypal account into thier bank account before they can be spent in the real world, and this is a process which takes 3-7 days depending on which day of the week, and which bank is involved.
Also: Despite all the warnings paypal might show you to encourage bank payment instead of credit card, the only party that has extra protection from the bank transferr option is paypal itself. If you use bank transferr instead of credit card, you give up all the protection your credit card provider offers, and get no extra protection from paypal in exchange - please keep this in mind.

Instant Bank Transfer
Instant bank transferr is not actualy instant at all as the name suggests. The way it works is: paypal credits the sellers paypal account instantly, with a temporary 'loan' which is provided to you. They recover this 'loan' by debiting your bank account, and this can take 3-5 days to reflect at your banks end. If your bank account has insufficient funds, paypal will try again (which may incurr dishonour fees for you from your bank), and if that fails, they will charge the ammount to your 'back up funding source' which will normaly be your credit card. If your back up funding source has insufficient funds paypal will show a negative ballance in your paypal account, and may restrict your account. If you do not have a back up funding source, paypal will not allow an instant bank transferr and instead will offer an eCheque option.
Again, even once the sellers paypal account has been credited, it will still take 3-7 days for those funds to be withdrawn to the sellers bank account.

eCheque payments are the slowest funding method available. The seller is notified of a PENDING transaction instantly, and advised by paypal NOT TO SEND any goods untill the payment clears. Paypal will then deduct funds from your bank account, which can take 4-10 days to show at your banks end, and can take as long as 15 days for the eCheque to clear and release funds to the seller.
It then takes another 3-7 days for the funds to withdraw to the sellers bank account.

In the past, sellers have traditionaly been happy to send items as soon as they can see thier paypal account has been credited. However, due to the increased number of fraudulent buyers around (as a result of the eBay and paypal policy changes), you will beginn to notice (if you havn't already), more and more sellers requiring payments to be withdrawn to thier bank account before they can dispatch.

Paypal is not regulated by the government, and they are not a bank. Paypal accounts should not be treated as bank accounts even though they act in a remarkably similar way, and as such you should never hold money for extended periods in your paypal account, and you should never consider your payment recieved and cleared untill you have the cash in your hand (or in your regulated bank account). Paypal accounts can be limited or frozen at any time, and transactions can be reversed at paypals discression, with none of the normal legal protective rights you would have with a regulated bank

Having said that, paypal is a very easy to use payment system, and is fantastic for buyers - just as long as you are aware of the timeframes involved................. the quickest your payment will ever reach your sellers bank account is in 3 days, yet it could take as long as 22 days (and the seller has no control at all of this) or longer if there are other problems.



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