PayPal Kills a Key Benefit of Its Business Debit Card
Users who prefer using their PayPal balance as a partial funding source for certain payments through a special PayPal debit card that earned them cashback learned of some disappointing news this week. They will no longer be able to use backup funding from a linked bank account on purchases using the PayPal Business Debit Mastercard, effective September 12, 2023.
That means they will have to have enough money in their PayPal account to fund purchases using the card. As a reader explained, “After 23 years of using PayPal, they are closing my backup bank account. So if I want to send a payment and I do not have funds in my PayPal account, it now takes 5 days to transfer money to my PayPal account from my credit card or bank.”
Users can still add money to their PayPal balance with their bank account, cash at a store, or by cashing a check (check the updated fees sections for each funding method), but as Reddit users pointed out, a primary reason for using the PayPal debit card was so they could use it without having to have 100% of the funds in their PayPal account before making purchases – it could be withdrawn from a linked bank account.
“I relied on this pretty heavily, because it meant I didn’t HAVE to keep a balance in PayPal but could still use my PPBDMC (PayPal Business Debit Mastercard) for … everything,” a user wrote on Reddit. “I don’t want to have to maintain a balance at all times in PayPal, they’re not my bank.”
The user said that as a result of the change, they would be going from using the card for 99% of everything they use a debit card for to 0%. “I guess I have about a month to switch all my automatic charges and bills to my bank debit card. Really disappointed this pretty big feature is just, poof, eliminated.”
When asked how they learned of the change, another user said, “Of all places, it was in the PayPal Legal Agreements that was emailed out today. Such a terrible way to announce the removal of big feature.”
As we reported yesterday, PayPal has been sending an email notification of changes to its user agreement and numerous other legal agreements this week.
The notice linked to a page containing an unwieldy number of agreements that would be undergoing numerous changes (and differing dates those changes would take effect). It was pretty easy to spot a change in fees for QR code transactions, but it was up to users to figure out which of the other numerous changes might impact them and how.
In a section of the page titled, “Amendments to PayPal Business Debit Mastercard(R) Cardholder Agreement – Effective September 12, 2023,” it stated:
Please review the updates below, which take effect on the date noted above. You can also review the updated Cardholder Agreement for additional detail.
- The Backup Funding Source linked bank account feature of the PayPal Business Debit Mastercard will no longer be available.
- “Debit Card” and “Activation” sections – updates clarifying certain provisions.
- “Using your Debit Card” section – updates to clarify the use of your Card to authorize transactions.
- “Additions to PayPal Business Balance” section – Adding a reference to the ability to use your Card to add funds to PayPal Balance at participating stores, including associated fees.
- “PayPal Business Debit Mastercard Fees” section – Clarifying certain other fees.
- “Amendment and Cancellation” section – Clarifying the manner in which notices may be provided.
If you prefer not to accept these changes, please contact us at the customer service number provided in your Cardholder Agreement to close your Card Account.
Review the updated PayPal Business Debit Mastercard® Cardholder Agreement
Note that the page also included a section that covered “Amendments to PayPal Debit Mastercard® Cardholder Agreement – Effective September 12, 2023.”
PayPal is making changes impacting a dozen legal agreements. As we advised yesterday, take the time to read through them, and contact PayPal if you have any questions.
However, PayPal sent an email notice about the changes to the debit card agreement to at least some users. The reader referenced above forwarded us the following email notification he received:
Updates to your PayPal Account
Hi (name redacted),
We want to make you aware of recent changes that are relevant for your PayPal account. Your updates are summarized below.
Capability & Feature Updates
PayPal Business Debit Mastercard(R): Backup funding from a linked bank account ends 9/12/23. You can still add money to your balance with your bank account, cash at a store, or by cashing a check. Learn more.
Our ongoing focus is to help your business thrive. For additional resources, check out the links below.
Thanks for being a valued customer,
The PayPal Team
Changes to Cryptocurrency Fees and Privacy Policy
The notice that went out to users this week about changes to PayPal’s legal agreements also included news of a change that could make it cost more to users who buy or sell cryptocurrency effective October 23, 2023: “The spread (or margin) PayPal will include in the cryptocurrency exchange rate when you buy or sell cryptocurrency is being increased. This spread applies when you buy or sell cryptocurrency in exchange for USD. This update may result in a higher overall amount paid by you when buying or selling cryptocurrency.” Earlier this month, PayPal announced a stablecoin tied to the US dollar.
Among the many other changes PayPal is making to its legal agreements are changes to its privacy policy, including describing how PayPal account holders can adjust what personal information may be seen by other Users via their Account Settings.
Ina Steiner
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