New Discover Feature...Send Money Via Paypal From Your CC

[Anonymous]

why would discover advertise soemthing that loses them money and makes ebay money?

[DI]

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@Anonymous wrote:

why would discover advertise soemthing that loses them money and makes ebay money?

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They're not.  They teamed up with PayPal.  There is some confusion regarding if PayPal charges a fee.  I imagine Discover is looking into it. 

[Anonymous]

I strongly reccomend against anything over 2k. Doing it today got my 2 year old account limited with Paypal asking for confirmation of ssn, address, photo id, transaction details, tracking number, supplier info, and more. Upon calling them they said they believe its an item and not simply sending money and wont release the limit till they have this info. They also told me it will take an average of 14 days to finalize the review of the supplied info. Just a warning.

[Anonymous]

Are any other CCC doing this too?

[kbell]

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@Anonymous wrote:

Are any other CCC doing this too?

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Amex owns www.serve.com that has Paypal-like service. Fee-free CC funding is available until September and you can use any credit card. The daily and monthly cc funding limit is very low, however.

[Walt_K]

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@Anonymous wrote:

why would discover advertise soemthing that loses them money and makes ebay money?

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It's not clear that Discover would be losing money.  They may be making in enough in fees charged to PayPal to cover the cashback they are offering.  But the point is that someone would be losing money if there truly are no fees.  Why would they set it up that way?  There could be lots of reasons.

Perhaps they figure that not too many people will take advantage of the system and that overall they will make more money from people using it normally than they will lose from people gaming it to maximize cashback rewards.  Or they are viewing it as a loss-leader hoping it brings more customers to PayPal who will engage in other transactions where they will make money. 

Or it could be more simple, someone didn't think it through.  Look at the direct ship program from the Mint and all the frequent flier miles people were (are?) able to rack up buying cash from the Mint.  Look at all the loopholes people are able to take advantage of in booking airline tickets by taking advantage of fuel dumping.  Sometimes these things simply aren't thought all the way through.

[kbell]

I am reading on slickdeals.net that interest charges may apply if you use this service, according to one person who heard it from a Discover CSR. Sending money will still count as a purchase and not a cash advance, but there is no grace period, so interest will begin on day 1. Anyone who has already used this service may want to look at your next statement closely.

[Walt_K]

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@kbell wrote:

I am reading on slickdeals.net that interest charges may apply if you use this service, according to one person who heard it from a Discover CSR. Sending money will still count as a purchase and not a cash advance, but there is no grace period, so interest will begin on day 1. Anyone who has already used this service may want to look at your next statement closely.

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Wonder if you could push a payment to your card so you have a negative balance and avoid interest.

[kbell]

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@Walt_K wrote:

Wonder if you could push a payment to your card so you have a negative balance and avoid interest.

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ha...I haven't thought of that. Discover would have grounds for adverse action.

[Ron1]

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@kbell wrote:

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@Anonymous wrote:

Are any other CCC doing this too?

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Amex owns www.serve.com that has Paypal-like service. Fee-free CC funding is available until September and you can use any credit card. The daily and monthly cc funding limit is very low, however.

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It might treat as cash advance if you use your credit card as funding source. It depends on the issuers of the credit card. I only used my debit card or my checking account as my funding source of the serve account.

Ron.