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  1. #5
    under the oaks Original Poster Mary's Avatar
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    Default Why a payment is an eCheck vs Direct Transfer

    [this information added after the first 2 pages of posts]

    This is for PAYPAL only
    , not for any other sources of eChecks. Here is what I learned in a conversation with one of the senior Paypal people.

    First -

    • Most Paypal employess on the front phone lines are not up to speed on the esoterics of eChecks. They just know the basics.
    • The Paypal online help pages are in the same status.
    • You can waste a LOT of time trying to find more complete answers from those two sources.

    I pass that along to save someone else some time.


    So according to the senior Paypal guy Jerry -

    - An eCheck is far more likely to occur with a bank-account-source funds transaction than with other sources.

    - ​The sender does not determine if/when a payment will go as an eCheck.

    - ​An eCheck is sent when a payment meets certain risk criteria, as determined by a combination of factors coming from banks, Paypal and even other processing entities.


    The operative terms for eChecks are Risk, Risk Filter and Risk Mitigation.

    If that's all the detail you ever wanted, you can stop here and skip the deeper dive!



    More about Risk Filters and Risk Mitigation


    - If the risk auto-flags are not tripped, the payment will go as an instant transfer, regardless of funds source.

    - Payments from the Paypal account balance or from a credit card balance are the least likely to be flagged as an eCheck, but it can happen.

    - Risk Filters are complex
    , but fundamentally they are supposed to flag transactions that are at higher risk of coming up against either

    • unauthorized use of an account,
    • fraud, or
    • insufficient funds.


    - A key to understanding the risk flags that trigger an eCheck is the question "Is this transaction typical of your history?".

    - Sending funds as an eCheck gives the entire system more time to be certain of both a valid transfer of funds, and to give payors a chance to claim "foul" for an unauthorized payment before the funds are fully committed.

    Banks and transactions going through the ACH system that clears payments between separate financial entities have by far the most risk mitigation flags. But Paypal also has some risk flags, as do some of the amalgam of separate corporate entities that are involved in the transactions clearing process.

    Although transactions from one Paypal balance to another Paypal balance seem to be the easiest and least risky to process, there are risk flags alerting of possible unauthorized use of someone else's account.


    Some of the risk auto-flags include things such as
    • Unusually high payments compared with the past history for that account.
    • Certain types of goods that attract more fraud, such as computer games and electronics.
    • Unusual frequency or other pattern of transactions, compared with the past history for that account.




    Calling Paypal for more information about problem eChecks - ask for one of these departments

    Limitations Department -
    for limitations placed on your account, or that you want to place on your account, to help close it off from unauthorized use

    Security Settings & Payments Department
    - to better understand your options

    Disputes & Claims Department - with the caveat that Paypal can't always recover funds that are gone, but in certain cases they can take action to stop further problems of certain types




    Sellers: If you are suspicious about a payment you've received through Paypal (including an eCheck that doesn't clear)

    Ask Paypal for a Buyer Fraud Review of that transaction.

    Paypal encourages you to let them know if you are suspicious! Paypal can see a LOT of information about the transaction that you can't.

    Alert Paypal as soon as possible, before transaction records held outside of Paypal become less accessible, or are even discarded.

    If Paypal finds that the payment appears to have been manipulated with bad intent, they may not be able to refund you, but they can take action against the account that sent the funds. If they find sufficient cause to do so, they can place limitations on the account. They can even ban the account owner from ever using Paypal again. All based on Paypal's determination of the circumstances, of course.



    Paypal likes to remind everyone: If a payment didn't come from Paypal, it is not under Paypal protection! Jerry reminded me. In addition to the convenience, this is a big part of what the fees are for.
    Last edited by Mary; 03-16-2016 at 08:00 PM. Reason: add information

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