Paypal’s financial services scam


The operative word in a lot of  South African big business ventures is racketeering. PayPal’s local partnership with FNB may avoid some of the fineprint in local legislation against organised crime by appearing to be a method of helping citizens to comply with forex laws, but the scheme is nothing more than a double-dipping scam.

That’s right, where is the OPT OUT from the service? Anyone with a PayPal account already gets billed everytime forex is deposited. This is known as a service.  FNB it appears, wanted in on some of the action. So what did the shysters do? They partnered their financial services to local PayPal customers on the basis of superstition without an escape clause.

For starters, there is nothing illegal stopping South Africans from holding foreign currency. The issue is how much and and what size in terms of the amount of the transaction. This is not rocket science, buying goods in one country and importing them into another will already draw attention from South African Customs and Excise. Consumers will pay VAT on certain items, and on others, various surchages according to an import schedule. We all know this, and you wouldn’t be reading this posting if you are the kind of person who thinks the Internet is a parallel universe when it comes to stuff like money and consumer goods. A person shifting money around to fund international terrorism isn’t going to use PayPal, at least not in the same way.

Here is the problem illustrated by my first experience receiving money via the PayPal service. My ill-gotten gains of $20 earned from writing an online article for an Indian website is not exactly the kind of figure that would draw interest from the Hawks or the FBI, so this story is not about some of those nasty rules governing money-laundering, which would mean amounts at least in excess of $10 000.

No, it is all about what happens to capitalism when a local bank starts hitting a foreign company and a misinformed company at that.

Take the way the unions went for Walmart, as if suddenly the rules for doing business in SA are different if you happen to eat hamburgers and sing Yankee Doodle.

Okay, nothing wrong with leveraging labour legislation and buying local, but look what happens to my $20 when us consumers are forced to turn over precious forex to the Rand economy because management at PayPal are impressed with FNB junkets.

Instead of helping Mr Joe Average to pay for a hard to find item that might make or break ones social life, and which is NOT AVAILABLE ANYWHERE IN SA, the piddling amount is hijacked by FNB in its enthusiasm to provide over R240 worth of forced accounting. Come again? You mean I received $20 and now owe FNB  at least R106.40? Yes after converting $20 into R133.60, I will end up with a great big minus in my account book, thanks to more service fees, more paperwork consuming nothing but R240 pa because the incentive to use the system just died.

Ergo receiving $$$$ via PayPal, less their service fees now equals additional service fees to FNB without them providing anywhere near a meaningful service. Top Up? Not likely, I already have a credit card and want to OPT OUT FROM A TOTAL FINANCIAL SERVICES  SCAM.

Here is the letter from PayPal, informing me that I basically  don’t enjoy any rights as a consumer, since lo and behold, the executive behind PayPal, Scott Thompson et al,  have decreed that I am a dumbass South African who wants to pay twice for everything I do. Why would anybody want to convert forex in this kind of low denomination anyway, and why can’t I simply spend it online like any normal people would do? If you are as mad as hell as I am, then write letters to Bonehead Thompson and the regulators in South Africa. For starters there is the Public Protector. Then there is the Advertising Standards Authority. I letter citing some law would be good, especially if it points out that nowhere, but nowhere does the letter below cite any relevant legislation. Plain superstition is what it is.

Dear David Lewis,
Thank you for receiving your online payments with PayPal.
Now that you are using PayPal to receive payments, we want to be sure you’re aware of the following important South African exchange control regulations:
1.   Funds you receive via PayPal can’t be sent to other PayPal users.
2.   You need to withdraw the received funds from your PayPal balance to a South African bank account within 30 days of receiving these funds.
In order to help you quickly and easily withdraw funds from your PayPal account, we have partnered with First National Bank (FNB). Together, we created the Top Up and Withdraw service with PayPal. To register for this service, follow these 4 steps:
1.   If you don’t already have one, open a FNB account by visiting the online FNB Product Shop or the FNB Branch nearest you.
2.   Once you have a FNB account, register for FNB Online Banking.
3.   Log in to your Online Banking profile and register for the Top Up and Withdraw service with PayPal.
4.   Link your verified PayPal account to your FNB Online Banking profile using the ‘PayPal services’ link on the ‘accounts’ tab.
Once you have registered, you can transfer funds (U.S. dollars) from your PayPal account to your qualifying FNB account in rands. Please note that FNB charges a small fee for each Withdrawal.
For more information regarding this service and how to register your PayPal account, go to: https://www.fnb.co.za/online-banking/pay-pal.html
You can also call FNB at 0861 PAYPAL (729725), or send an email to paypalenquiries@fnb.co.za.
Regards,
PayPal
UPDATE: After complaining endlessly on the FNB Paypal hotline, and raising the issues above,  I was finally allowed to open a Smart Account and link to my Paypal account. Even though several employees said it couldn’t be done. The basic savings account, unlike the cheque account they want you to have, has no monthly fee. Minimum deposit is R10. It takes up to four working days for the transfer to clear.
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