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10/20/21: As of 2021, PayPal is offering similar services to PayPal Here under its new PayPal Zettle brand. Existing PayPal Here accounts remain active, so we will continue to provide this review, but those looking for new service should check out our PayPal review.
PayPal’s Mobile Payment Processing
PayPal has thrown its hat into the mobile payment acceptance arena with its launch of the “PayPal Here” mobile payment app and line of card readers. The service is yet another carbon copy of other mobile credit card processing services like Intuit’s GoPayment, Square, and North American Bancard’s Pay Anywhere, but, of course, PayPal Here has its own spin on the idea.
PayPal Here Payment Processing
PayPal Here’s chief innovation is that it is integrated into a regular PayPal account and, therefore, merchants have access to a wide range of other features not found with most competitors. Funds from PayPal Here transactions that fall within normal risk tolerances will be available immediately to the merchant within his/her PayPal account. Merchants have the choice of transferring the money into an attached checking account or using an attached debit card to make purchases and ATM withdrawals.
PayPal Debit Card Features
PayPal advertises that by accessing the funds through purchases with its “PayPal Business Debit MasterCard,” merchants will get same-day access to funds and receive a 1% cashback bonus -bringing their effective processing rate down to as low as 1.7%. PayPal Here only offers automatic fund transfers to the attached checking accounts.
PayPal Location & Ownership
Daniel Schulman is the CEO of PayPal, which is headquartered at 2211 North First Street, San Jose, California 95131.
PayPal Here Review Table of Contents
- Costs & Contract: PayPal Here offers a month-to-month contract with no early termination fee.
- Complaints & Service: PayPal Here has received more than 100 public complaints.
- BBB Rating: PayPal Here has no independent BBB profile. Its parent company PayPal has an “A-” rating and has received 27,150 complaints and 2,221 reviews in the past 3 years. The company has been accredited by the Better Business Bureau since 2001.
- Sales & Marketing: PayPal Here does not hire independent sales agents and has not received any complaints about its sales practices.
- Rates & Fees: How Merchants Got The Best Rates With PayPal Here
Should You Trust PayPal Here?
Lawsuits, Reviews & Complaints
Here's Who We Trust.
Total Online Complaints
Live Customer Support
Most Common Complaint
We have located more than 100 negative PayPal Here reviews, some of which accuse the service of being a scam or ripoff. By far the most common issue encountered by merchants appears to be funds held by PayPal, which is a problem that PayPal Here has in common with its parent company. Merchants should know the steps to take when dealing with fund holds and are cautioned to understand PayPal’s fraud prevention policies in order to avoid having accounts frozen or funds withheld in the first place.
PayPal Here Lawsuits
In 2017, PayPal was sued in the matter of Zepeda v. PayPal Inc., a class-action lawsuit that alleged the company had improperly handled disputed transactions, placed holds, reserves or limitations on customers’ accounts without notice, and closed merchant accounts without notice. The company agreed to pay a sum of over $4 million to plaintiffs who were part of the class action.
2021 saw a flurry of legal activity concerning PayPal. It began in February 2021, when the company announced that it was under investigation by the Securities and Exchange Commission and the Consumer Financial Protection Bureau.
According to Bloomberg, “The SEC is investigating whether the swipe fees paid to the banks that issue PayPal’s debit cards are consistent with Federal Reserve guidelines, the San Jose, California-based company said Thursday in a quarterly regulatory filing. The agency is also investigating how PayPal reports marketing fees earned from its branded-card program. […] Separately, PayPal said it received a civil investigative demand from the CFPB in connection to the marketing and use of PayPal Credit in connection with merchants that provide educational services. The regulator asked PayPal to produce documents, written reports and answers to written questions. The company said it is cooperating.”
Following the announcement of this investigation, PayPal Inc. stock dropped significantly. This led to a bevy of class-action suits being announced against the company, including one here, here, here, here, here, here, and here. With such heavy legal action underway against one of the world’s largest and most well-known payment processors, these cases are sure to set standards for the industry going forward.
Customer Support Channels
One of the biggest frustrations merchants have with PayPal’s competitor Square is the lack of live customer support and communication regarding reserves and fund holds. PayPal Here has both live phone and online support; however, it is difficult to determine how the company handles communication regarding holds and reserves, and how the customer support fares with the service. PayPal itself has a very high volume of online complaints, but it is also a huge company that services many merchants, some of whom might be uninformed and easily frustrated. The comments located here and elsewhere that specifically discuss PayPal Here do not describe inaccessible customer support, so PayPal Here will receive a “B” in this category until further information is available.
Is the BBB Rating for PayPal Here Accurate?
Better Business Bureau Profile
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Product & Service Complaints
Billing & Collection Complaints
Advertising & Sales Complaints
Guarantee & Warranty Complaints
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
No Independent PayPal Here Profile
Since PayPal Here is an app created by PayPal, there is no Better Business Bureau report specifically for PayPal Here. The BBB report for PayPal, however, shows accreditation and an “A-” rating despite having 27,150 complaints filed in the last 36 months. Of the complaints, 21,248 are related to problems with the service, 4,130 with billing and collection, 602 with advertising and sales issues, 781 with delivery issues, and 389 concerning guarantee or warranty issues. PayPal has resolved 12,193 complaints to the merchants’ satisfaction, while 9,055 complaints either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant.
What Merchants Say
PayPal has also received 2,221 informal reviews, with only 33 being positive and 2188 being negative. However, many of these reviews are from customers, as opposed to merchants. One recent review from a merchant related to a poor customer service experience when using PayPal product Braintree:
The worst customer service ever. I am so frustrated with this company. I have a small business, and I sell online. I chose Braintree for my merchant account, and it was the worse decision. My bank account is incorrect, and I have been trying to contact customer service for the past three weeks. I wanted to call them, but they disconnected the phone line for customer service. I sent about four emails with a new bank account. All the replies I got from them are a link from the support page that asks me to upload a voided check which I already have uploaded at least three times, and they still have not changed my account. I had a $69 sale on my website, and I have no idea where the money went. They did not answer me when asked about the money, and they kept saying that someone would contact me to resolve the issue for the past three weeks. It is just the worse company to deal with. I cannot make any sales on my website, and I can’t cancel my account either because they will remove my access to my account, and I will lose the money from my sales. It is just unbelievable
Merchants should review their options for merchant accounts with a history of great customer service to avoid situations like this.
A “C” Performance
The BBB justifies its rating by citing the length of time PayPal has been in business, the complaint volume versus PayPal’s size, the company’s response to complaints, the rate of resolution of those complaints, and the fact that the BBB has sufficient background information on PayPal. Based on PayPal’s complaint count, resolution ratio, and size, we are adjusting this section’s rating to a “C” for the purposes of this review.
How Expensive is PayPal Here Service?
Rates, Fees, and Contract Terms
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3.5% + $0.15
2.9% + $0.30
Early Termination Fee
PCI Compliance Fee
Equipment Lease Terms
PayPal Here Pricing
PayPal Here, considered to be one of the best mobile processing options, offers a selection of four different card readers and an app that is compatible with most iPhone and Android devices. The swipe fee for processing a VISA or MasterCard transaction by sliding a card through the attached reader is a flat percentage of 2.7%, and the keyed rate is 3.5% + $0.15 per transaction. PayPal Here has no setup fees, monthly fees, processing minimums, or cancellation fees.
Updated Pricing Structure
PayPal Here formerly had some caveats in its pricing that apparently expired on April 15th of 2012. For instance, PayPal Here charged 3.5% for swiped American Express cards but was rebating merchants the difference to bring the final fee down to 2.7%. It appears that the rate for all cards, including American Express, is now lowered to 2.7%. Additionally, merchants who already use PayPal’s Virtual Terminal may see an increase in their pricing as all Virtual Terminal Transactions are subject to a rate of 3.5% + $0.15, which also applies to keyed-in PayPal Here transactions. Merchants who already use PayPal Pro products may also see a decrease in their pricing as all PayPal Payments Pro transactions are charged the 2.7% that applies to Swiped PayPal Here transactions. It’s a little confusing, but these rare cases may occasionally cause merchants to notice pricing discrepancies.
PayPal Here Readers
PayPal Here charges 2.9% plus $0.30 per invoice payment through the app and an additional 1.5% above its usual fees for international payments. PayPal Here offers a headphone jack card swiper free when you sign up for the service (MSRP of $14.99), though sales through this hardware are subject to the company’s automatic reserve policies. The reserve policy for this reader means that keyed-in transactions and sales over $500 in a 7-day period are subject to an automatic 30-day reserve where funds are held in your PayPal account to cover the high risk associated with these types of transactions. Merchants who wish to avoid holds of their funds under this policy may benefit from exploring high-risk merchant accounts better suited to process these transactions. Alternatively, PayPal Here’s most popular piece of hardware is an EMV-compatible Bluetooth chip and swipe reader which is also free when signed up (MSRP of $24.99). The company’s most comprehensive piece of hardware is an EMV/NFC-compatible Bluetooth swiper for $79.99.
Does PayPal Here Use Deceptive Marketing?
Advertising & Sales Strategy
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Employs Independent Resellers
Advertises Deceptive Rates
Discloses All Important Terms
Because PayPal is such a high-profile company, PayPal Here is marketed primarily through the PayPal website. The PayPal Here website is easily navigated and clearly outlines the terms of PayPal Here, including a notice regarding the keyed-in rate of 3.5% plus $0.15. Merchants are advised to bear in mind that key-in transactions almost always carry a higher transaction fee because they are higher-risk transactions than swipes. Merchants operating in high-risk sectors should consider opting for a dedicated high-risk merchant account provider to ensure their needs are met without issue.
The company’s use of direct marketing and its clear disclosure of pricing and contract terms have earned it an “A” rating in this category.