posted on May 22, 2002 09:04:00 AM new
This is just a quick note of warning to anyone who is thinking about using PayingFast to send payment for an auction (or for anything else).
Background: PayingFast.com is an online payment service similar to PayPal or BillPoint. However, PayingFast physically mails a money order to the seller. They charge the buyer a fee for this service. The buyer can have the funds withdrawn directly from a bank account or charged to a credit card.
My situation: I won an auction where the seller, for whatever reason, would only accept PayingFast for credit card payments. So I joined PayingFast (quick & painless) and followed through with sending payment via credit card. The PayingFast transaction summary showed that I had bought a money order in the amount of $18.00 + $2.89 PayingFast transaction fee. Kind of expensive, but it was worth it to me at the time.
My credit card statement arrived in the mail about 2-3 weeks later. As I scanned through the transactions, I noticed a finance charge. This was odd, since I always pay off the balance in full each month. Furthermore, it appeared as a “Cash Advance” transaction fee ($5.00) plus interest charges ($.08) that had already started accumulating.
Further investigation revealed – you guessed it – that all of the transactions on my credit card statement were listed as “Purchases” except for the one to PayingFast.com. That one was listed as a “Cash Advance.” Puzzled by this, I first e-mailed PayingFast to see if they had known this would happen. Quite frankly, they were clueless.
My credit card company wasn’t much help either, but at least they removed the fee/interest when they couldn’t explain it.
It was kind of a freak coincidence that I happened to get a credit card offer in the mail within the next day or so. As I was looking at the “Terms & Conditions” that came with it -- lo and behold -- under the description for “Cash Advances” it said this:
"Cash Advances are any transaction that involves the purchase of items convertible to cash...including but not limited to wire transfers, money orders, travelers cheques, gaming transactions, and tax payments." It also went on to state that Cash advances are assessed a 3% (minimum $5.00) transaction fee and begin accumulating interest charges immediately.
I looked through the Credit Card Member Agreements for my other credit cards, and most of them include the same statement regarding money order purchases being treated as Cash Advances.
Yowza! This came as a complete surprise. Although after thinking about it -- using your credit card to buy “cash” should be treated as a Cash Advance.
After this discovery, I really found it hard to believe that the Customer Support folks at PayingFast were unaware of this drawback to using their service. Surely they had heard about this from other PayingFast users besides myself? Although maybe most folks aren't paying attention to their credit card statements – especially those who are used to paying interest charges each month?
So I e-mailed PayingFast.com’s Customer Support again and laid out the details of my research. Their answer was, “We do over 500 transactions each day, and we honestly have never heard of this happening before.”
Do I believe them? Maybe. But the cynic in me is more inclined to believe that they don’t really care, just so long as people keep using their service. And I guess that I won’t be one of the people who continue to use them.
Thanks for taking the time to read my long-winded diatribe.
posted on May 23, 2002 07:44:32 AM new
Transactions to Paypal are treated as purchases. They are actually cash as well. I would say that PayingFast is being honest in saying that they have not heard of this happening.
posted on May 23, 2002 08:23:36 AM new
BIPAY.com will take customer cc and send out a western union money order ,the fee is 5.00.
intl customers use them more than domestic ones for online purchase.
wonder if there is any bidpay user here who can explain how it works -is this treated as cash advance??
posted on July 17, 2002 06:33:53 AM new
Hello,
After we received the complaint from this user, we investigated on why our transaction was showing as a cash advance. Certain credit card companies were showing us as a cash advance because of the "code" our processor was sending them. We have since have had this code changed so this would not happen again. We do apologize for the extra cost that you incurred and are willing to give you two transactions free of any fees. Please contact us if you would like to take advantage of our offer.
posted on July 20, 2002 10:32:16 AM new
I do not use a "credit card" but use a "debit card" ... ie. American Express, for PayPal and BidPay/Western Union - no additional charges from Amex for the priviledge. Cash advances are not permitted ever from a debit card, so it could never happen even accidentally that Amex could be billed as a "cash advance".
However my Mastercard bills me for currency conversion per transaction in addition to the usual currency markup - so I wont use Mastercard, especially for alternate currency transactions.
