The Oz Round Table boards > PayPal

Paypal taking money from my bank account

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--- Quote from: *CountessA* on September 27, 2014, 02:44:43 AM ---
It appears to have reset after some PayPal update.

--- End quote ---

This statement points to a possibility which annoys the heck out of me.

Having worked in the IT industry of the financial sector for several decades, the prospect of user defined preferences having been "inadvertently" changed just wreaks.  Changes to financial systems should be tested to a high standard, not only to safeguard the customers, but to also safeguard the business.  Mucking around with people's money enters into the realm of criminality and if that occurs through improperly tested changes, then the word "negligence" gets added.  If the change results in program code not looking up the customer's preference as it should, but using a value derived through some other means, then someone needs to be horsewhipped.

While I have no concrete evidence to support the following theory, the circumstantial evidence easily allows for it...
* As part of an update, PayPal could go through their databases and change everybody's payment source to "bank" instead of "credit card"
* It is almost certain they will be using a relational database, which can be updated using SQL - and the SQL statement to achieve the abovementioned change could be written on one line.

Benefits to PayPal are:
* Bank transfers incur no fees, whereas card transactions do.  PayPal holds on to more of the money.
* Bank transfers take longer to "process" and PayPal seem to extend this time by a number of days over my experience of the time it takes for bank to bank transfers to be completed.  As a result, the funds "passing through" PayPal are available to them for a couple of extra days.  A figure I found for this (from 2011) was over $300 million per day. So, if you could slow up the movement of money for 3 days, you would have a sum approaching $1 billion sitting under PayPal's control at any one point in time.  Sure the first day's $300 million would have to be passed on eventually, but the fourth day's $300M would come in and top up the kitty.  This gives you a rolling balance of around the $1 billion mark - and it will be sitting there every day of the year.  (Sure there will be seasonal variations and they will average out - but you can see the magnitude of what we are talking about.)
* Oh, and in addition to this "rolling balance", you can ADD the amounts held as a "PayPal balance".  That is money people explicitly leave in the hands of PayPal - and I'm sure PayPal loves every cent of it.
* Now, can you imagine PayPal (or anyone for that matter) sitting on $1 billion in liquid funds and not get some sort of benefit...?  (The short term money market springs to mind)

I point to the value of this for PayPal when the exchange rates plummeted a couple of years ago.  As we all know, PayPal offers it's own exchange rate for overseas transactions and, like all such financial bodies, will seek to profit through that by adding a margin.  They can also make money when exchange rates change - and they can also lose if the movement goes the wrong way or moves too quickly for them to respond, which is what I can imagine may have happened a couple of years ago.  For any of you who may remember, funds passing through PayPal in the following weeks took a few more days than normal.  This would have bumped up the "rolling balance" for a time that would have been useful...

Now, I do admit this is conjecture - but it has a logic about it.


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