Paypal Policy Update for Diablo 3 Release Date?

Hey everyone, this is a special announcement post. If you would like to read today's normal post, go to RMAH Guide: 4 Economic Principles.

Could the Latest Paypal Changes be a sign of release? As you all know by now, Paypal will be the method gamers use to cash out from the RMAH. I have been actually waiting and hoping for a policy change at Paypal, because it has been inevitable ever since Paypal accepted the  opportunity to integrate with Blizzard Entertainment / Activision.

What was discussed in Paypal's recent policy update?

Well, Paypal added some new concepts to their policy, such as the "mass payer" category. If you are a mass payer (Blizzard basically), then you will pay a 2% fee per transaction up to $1. This is why Blizzard has chosen to go with a $1.25 posting fee. They are basically making a quarter or more on every sale. That's for the United States, but for foreign currencies, mass payers will owe 2% up to $20.00 (after converting to US currency of course).

Unless Paypal will have a special user aggreement for Diablo 3's RMAH, these changes mean that Blizzard could actually lose money on foreign transactions. If the fee is $1.25 and a foreign player outside of the United States sells any item for more than $64, Blizzard actually loses money!

I'm sure this won't be an issue though, as the vast majority of transactions on the RMAH for all countries will most likley be under $10.

What do you think about these recent changes? Are they related to Diablo 3?
Again, this is a special announcement. Today's normal post is RMAH Guide: 4 Economic Principles.

17 comments:

  1. Hello Markco,

    I didn't really understand your article.
    Certainly because i'm not currently a Paypal User.
    But maybe you could enlighten me.

    Basically, did you say that for every transaction from the RMAH to a paypal account, Blizzard will pay the fees?
    Because, I thought it would be charged to the player.

    Let's go with a sample:
    - I'm a foreign player (French in my case)
    - I sell an item on the RMAH for 10 Beta Bucks (Yeah!)
    - Let's say 1 Beta Buck equal 1$
    - How much money will I get on my paypal account if I'm cashing out?

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  2. You will get $10-$1.25
    Blizzard will pay PayPal $10.00 * .02
    Blizzard receives $1.25 - ($10.00 * .02)

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    1. Ok!
      Thank you for the answer, that's cristal clear (and seems pretty good) for me now!

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    2. I could be wrong about this though. That fee could be on us and not blizzard! It's hard to read the legalese lol.

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  3. The best part about this for blizzard is the removal of the standard $0.30 per transaction that PayPal usually takes out on top of 2%.

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  4. Also, April 1st is the day this change goes live!

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  5. As I have posted on the Diablo 3 Gold Secrets Forum I am pretty sure that Blizzard won't pay the paypal fee for you. The 1.25 $ to Blizzard per successful transaction is irrespective of where the money goes (paypal or BattleNet account). The paypal fee is on top of that. However, it is not clear if the 2% paypal fee are calculated before or after substratction of the 1.25 $ transaction fee. Usually there is also a small fixed fee associated with paypal transactions (~0.25 $). Even worse, there have been rumors that there will be another cash-out fee that Blizzard collects on top of the transactions fee as soon as you use paypal and not the BattleNet account system. To my knowledge this has never been confirmed by Blizzard, but also never denied.

    @Clément for your case this means:
    transaction fee: 10$ - 1,25$ = 8,75$
    possible cashout fee: 8,75$ - 0,5$ = 8,25$
    paypal fee: 8,75$ *0,98 -0,25$ = 7,83$

    ----> 7,83$ into your pocket

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    Replies
    1. Glad you showed a different interpretation, we'll have to see where things go from here. Maybe an official announcement will come out soon.

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  6. I agree. I don't think Blizzard will foot the bill for the PayPal cash out. They should at $1.25, but they will probably want a bigger chunk.

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  7. I can't find anything at that link indicating that there is any kind of "mass payer", or anything about 2% up to $1.00.

    Can you help me out here, Marcko?

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    Replies
    1. Try logging in first. It may only be visible to members.

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  8. Found it... you now have to click "View past policy updates" to see it, or use the following URL:

    https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/archive_policies_full&fli=true&locale.x=en_US

    How I read this announcement in context is that we now likely have a good idea about what the additional "Cash Out" fee will be that will be assessed if we select our payments to go out third-party instead of to our Battle.net balance:

    I surmise that the additional cash-out fee (that has been mentioned before but never clarified) will be 2% of whatever is left over after Blizzard deducts their $1.25 fee (which the will get regardless), and what that extra fee caps out at will depend on the region.

    In other words, I suspect they'll pass those extra cash-out costs directly on to us as a wash, and they'll end up with a fixed $1.25 profit, regardless of whether you go Battle.net or PayPal for your option.

    So, to make the math simple, if you sell something in the US region, and the final sales price was $51.25, Blizzard would take their flat $1.25 fee, and the gross would be $50. If you had elected at listing time to have the proceeds go to your Battle.net balance, you'd see your total go up $50. If you had elected PayPal, your cash-out fee would be $1.00 (the maximum for the US), and $49 would be forwarded on to PayPal.

    Now, you'll still pay your personal PayPal fees on top of that, since you are receiving money. So PayPal will take $0.30 from you, and 2.9% as well, so you'd see your PayPal balance go up by about $47.29 on that sale.

    In non-US regions, it would work similarly. Blizzard will deduct whatever their fixed fee is in whatever currency is in use for that region, and then likely assess a cash-out fee of 2% to cover Blizzard's "mass payer" costs, and things will proceed from there.

    PayPal has extra work to do associated with the expected huge number of payments that could be generated, so they charge both the mass payer and the payment receiver as well. It seems likely that Blizzard will just pass that extra cost on, and their net proceeds will remain the same.

    This change at PayPal just tells me that non-US RMAH cash-out players will pay slightly more in cash-out fees than US players will on really big-ticket items (because they have to go higher before that 2% fee caps out).

    I can't imagine that Blizzard would do it any other way... it seems unlikely to me that they'd take their own profits down 80% if you cash out instead of going with Battle.net, and even more silly that they'd be willing to lose money in order to have non-US players able to cash out on bigger-ticket items.

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    Replies
    1. Thanks for this enlightening post, Barry.

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  9. The PayPal updates have nothing to do with a game release. PayPal has frequent updates with thier service agreements.

    The way Sony/Livegamer worked is the fees for PayPal were covered on thier end (seller paid a similar fee to Blizzard's current structure), so do not count out Blizzard handling the same way.

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  10. hi i cant logg into the forums is it just me or are they down?

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    Replies
    1. Shoot me an email and I'll trouble shoot for you.

      Markco at diablo3goldguide dot net

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  11. Nvm works today i got "domain dosnt excist" evey time i tried it yesterday.. and the day before it worked wierd.

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