RealTime IT News

PayPal's Restitution

Some of PayPal's 50 million account members are getting a break on their transactions Thursday as an apology from the company for a service outage that hobbled the site earlier this month.

After six days, officials at the eBay-owned company restored functionality to the Web site, which crashed because of an architecture update -- but not before derailing transactions made during the outage.

So, as a way of making it up to its customers, Thursday is "PayPal Thank You Day."

"We're taking the opportunity to thank our customers for their ongoing business and also to apologize for the inconvenience we might have caused during the recent site issues," said Sara Bettencourt, a PayPal spokeswoman.

Until midnight PST Thursday, business and premier account members in eligible counties can rack up as many domestic and cross-border transaction fees as they want; the sum of Thursday's transactions will be credited to members' accounts by Nov. 25, the Web site's FAQ states.

There is a list of exclusions, however. Withdrawal, currency conversion, chargeback settlement, expanded use, buyer credit and any other types of fees garnered Thursday will not be credited. Also, 17 countries are excluded from PayPal's Thank You Day, including the United Kingdom, Germany, Spain, France and Italy (see complete list here.

Bettencourt would not divulge how much of an effect the transaction fee payback would have on the company's financial sheets. In the third quarter of 2004, she said the company's total payment volume -- or the total value of transactions -- was $4.6 billion, or roughly $50 million a day.

According to David Blunt, a PayPal customer and owner of a domain services company called Splinternic, the fees assessed vary, whether from size of the transaction or the volume.

"I'm not sure what the exact formula is but I can see on a $10 payment they deducted 62 cents, on a $20 payment 74 cents, but I see on two $15 payments one had a fee of 78 cents and the other had a fee of 63 cents, so I guess it has to do with the way the payment was made, whether by credit card or from a PayPal balance," he said in an e-mail.

Bettencourt said initial feedback from the online community has been positive, but Blunt isn't convinced everyone's entirely satisfied.

"I didn't suffer any losses as far as I know because orders come in separately from PayPal so payments were just delayed. But I imagine for those who did lose sales, one day's free transactions are an insignificant compensation," he said. "Some problems continued for almost a week, so they should offer a free week of transactions."