PayPal

Why does PayPal impose very low limits on the total credit card spend in a given period and then say that you can only have the limit removed if you add your bank account details :

It all sounds somewhat dodgy to me

I would suspect that it's cheaper for them to take money via direct debit than it is to accept credit cards. I know retailers are charged when they take a card payment.

A asked Paypal about it when it happened to me. The way I understood it using your credit card only was paypal allowing you a limited trial. If you like it and wish to continue you have to sign up in full with your bank details.

I agree, and if the charges are anything like those that retailers get then I'm not surprised.
Quite a few busineses are now charging something like 2.5% extra if you want to pay by credit card, travel agents are the first that spring to mind and online booking agencies do it too.
THe only people that win are the banks

But I would point out that once you have given your bank account details you can then carry on using your credit card to pay, without any restriction

It's all about making sure you are who you say you are. There are EU regulations that cover money laundering and other illegal activities.

After you have confirmed your bank account and location then all should be fine.

Too right John, we dont want the ink running on the banknotes if theyre done on the wrong setting

Seriously though, is that the real reason? I would have thought a credit card just as valid a form of ID as a bank account.

I think EU regulations are a core reason. The process of testing a user's location does prove where we actually are. The possession of a tallying bank account probably clinches our identity.

My paypal account is not linked to my bank account at all, I only have my credit card connected to it. I never had any problems paying so far, but maybe I have not reached the credit limit. What is the credit level that would trigger the requirement of the bank account?

It could also be a risk management matter, as you you have protection with your credit card that you do not have when you pay from your bank account. This means that in case of a dispute you can ask your credit card company to stop the payment, effectively bypassing PP resolution process?

Apparently the UK limit is £1900 in any one year.

Once you reach the end of the year, it resets and you get another £1900 limit for the next 12 months.

So if you are using Paypal for small items, you may never hit the limit, but equally you could try and buy something for £1950 as your first transaction and find that PayPal rejects it.

PayPal could verify the credit card by sending a small refund (99p) with a four digit code. Once received on your next credit card statement, you enter the code on the Paypal website and the verification is complete.

However, despite this system of verification appearing as a solution on their website, you can't actually access it and the only option is to add your bank account details.

Not a satisfactory way for a company to behave so I think that I will just have to kick PayPal into touch.

As soon as there are more competitors in the marletplace the better.

There's a charge of about 3.6% on gifts sent to friends/relatives
via a card. 0% using a Bank Account.

You can now buy Pay as You Go Cards which would make money
laundering possible, so I suppose they have to control it.

Things must have changed, when I had to register my bank account it was because I had reached a total limit over somthing like two years

Since registering my bank account, payment comes from my bank account by default without the option to pay by card any more, which is annoying because it takes a lot longer! Is there a way to choose card payment rather than bank account payment? I have tried to find a way, but failed

There is a way to change. I can do it when paying for ebay items. from memory when I first login to paypal the screen comes up telling you how much you are paying and the source, just to the right I think there is the word "change" in blue. If I use that it gives you options to select where to pay from

Ah OK I'll look out for that... thanks Barrie.