Skype and PayPal – A Different Set of Rules

As a freelance writer I work from my home office. This means added expenses, but with an equal amount of tax deductions (which of course I always notice this time of the year). Thanks to e-mail, mobile phones and Skype I’m able to keep my communication costs down.

This week, I’m starting to work on a story that involves calls to Sweden, and Skype makes those calls quite affordable. Instead of racking up a phone bill that could possibly rival the pittance that I might be paid for the story, I can call Stockholm for a dollar or two. Not surprisingly, I highly recommend Skype to any small business user who needs to make a lot of international calls. Best of all, calls made Skype to Skype are free, with added benefits of having multiple parties on the line at the same time.

But while working on my story I experience the flip side of the coin. Skype can be a little frustrating to use. First of all when using Skype if you don’t have a speedy connection you’re likely to experience a lag in communication and even break up. When calling Skype to Skype, it’s best if all parties have fast broadband. This, however, is an acceptable part of the technology.

What isn’t acceptable for this small business user is that payment options have become far less flexible. Part of this is my own problem. I woke up early to call Sweden only to find that I have inadequate credit on my account. I should have checked this the night before, as it isn’t the easiest process to add funds, requiring multiple steps.

I typically have opted to pay directly by a credit card, which is normally simple enough, but Skype billing is still done in Euros despite the fact that eBay now owns Skype. Why the company hasn’t changed over to dollars for American users is still unclear to me. This means I don’t know exactly how much I’m paying, and due to currency fluctuations I could pay more one day than the next. Cost of doing business I decided, and I moved on.

Skype always seems to have some minor issue when I try to use a credit card, and after repeated tries I gave up. Normally, it eventually goes through. The other options are a bank transfer or PayPal. Considering that both bank transfer and credit card are offered you might wonder why PayPal is part of the equation? Well, eBay owns PayPal too. This allows those with funds on their PayPal account to use them to make calls. Convenient? Possibly. Devious, more likely!

Since the credit card wouldn’t go through I decided to opt to use PayPal. For me it is practically the same. I pay the same amount and the seller (in this case Skype) is still stuck paying the fees. And this is where the payment options have little flexibility. To pay with PayPal I was informed that I must agree to PayPal’s default payment structure, which means money comes first from the PayPal account, then a bank transfer and finally from a credit card. This is unacceptable to me.

I don’t like the idea that I am forced to do a bank transfer. The credit card option wasn’t working and with PayPal I should have the right to choose how I want to supply the funds. The exception is that PayPal generally takes any funds in the account first, but I should still have the right to pay with a credit card rather than a direct transfer. For one thing I don’t use a debit card. I pay my credit card balance in full every month—actually I pay it multiple times a month. But I like the protection that a credit card provides and I really like the frequent flier air miles I get!

What is actually worse in my opinion is that PayPal provides its sibling company at Skype a service few other PayPal users get to do, namely say “no to credit cards.” In most case PayPal charges a high fee to sellers (the receiver of money) when a credit card is used. This is because PayPal passes on the credit card company fees.

According to the PayPal rules, sellers (again the receiver of money) are not allowed to pass these fees on. It happens a lot, but when I buy something I typically like to point out this is against the user agreement. On eBay sellers are generally not allowed to say they’ll take PayPal and then refuse to take credit cards. I’ve had conversations with eBay about this matter and while it happens I’ve been informed it shouldn’t.

So this means that if eBay sellers who take PayPal aren’t allowed to say, “you must use a bank transfer first,” but Skype is allowed, than eBay’s family of companies are playing by a different set of rules.

None of this will make me stop using PayPal, eBay or Skype. I love all three, and frankly find these almost as important in my life as e-mail and the mobile phone. But it is interesting to see that the rules for the little guy don’t always apply for the bigger guys.