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Originally Posted by OfficialGenius  Good thing we have Paymate! As far as the new ruling, how will it affect existing accounts? Looks like someone's going to have to make a thread in preparation for this.  |
It all depends on how PayPal implements this.
They MUST comply with the new regulations, they have no choice. So, they have to decide how to implement this at the lowest cost to PayPal.
The new rule states that only sellers with more than $20,000 and 200 transactions have to be reported.
So the issues for PayPal are:
1) Do they get everyone's SSN upfront, or do they only require sellers who meet the new criteria to divulge their SSN's? Which costs less?
2) In considering #1, how many users who will not meet the threshhold anyway will not want to do business with PayPal if they have to divulge their SSN? There are MANY LEGITIMATE reasons for not wanting to do so.
3) If they require the SSN's upfront, does it have any other benefit to PayPal? Maybe in fraud loss reduction?
So, the powers that be at PayPal will meet to discuss these issues. Each person will probably have their departments estimate the cost and effect of each scenario, so they will have numbers to discuss.
At the end of the day, they will do whatever costs them less, be it in employee salaries (someone would have to manage the process of getting the SSN's from individual sellers), lost business (it they just make it a requirement of all users upon signup), and then also taking any positive benefits into consideration.
That is how businesses operate. Everything is a financial decision.
I don't know the internal working of PayPal, so this is just a guess - they will only require sellers meeting the threshhold to divulge their SSN's. Why? Because they are probably a small number of accounts.
I also think that many, if not most, sellers already report their income, so I doubt the IRS will get as much of a lift out of this as they are hoping to.
Just my opinion...
