If you don't routinely sell stuff on ebay, or aren't verify familiar with, but use paypal, read on.

As you probably know, paypal tries very hard to upgrade everyone to a premier account so that they can scam you 2-3% for each and every transfer you do (even paypal account to paypal account, or from a bank transfer which costs them virtually nothing). In other words, if you send $100 to your coworker for a recent dinner, they keep 3%, and so on.

Obviously, the idea is to never upgrade to a premier/business account.

That said, they (somewhat recently?) changed ebay so that if you sell anything on Ebay, and the seller happens to use a credit card, you are totally screwed.
You are not allowed to refuse the payment and ask the seller to use a paypal funds or bank account funds. They flat out removed the deny payment button.
At that point, you are forced to upgrade to a premier account, unless you wait 60 days for the payment to time out, your auction to go down the drain, and the buyer to get pissed at you.
After that, your paypal account is tainted and you can't use it to get money from your buddies anymore. The only workaround is to open a new and separate paypal account that you never use for auctions.

So, if you sell on ebay, you get dinged twice: first on the auction fee (ok, that one is for the service), and then the needless paypal fees behind it.

The fine print, which is of course well hidden, is in this page


I also suspect (although haven't verified), that paypal will auto-switch your default payment type to suit you: if you're paying a premier member, they'll use your bank account so that they can pocket 2-3% (they do this for me every time, then denying me my credit card payment protection and especially the 3 month loss protection and 1 year warranty extension I'd get with my credit card).
If you're paying an regular member like me, I'm guessing that they default the payment to credit card to then force that member to upgrade.

I hated them before, I hate them even more now..

(update later) I found out that you can actualy downgrade from a premium account down to a regular account if you call their support, as a one time thing. They still scammed me the money for the two ebay transactions, but I was also able to call them about a bad seller who sold me fake nokia batteries, and they refunded me the amount of my payment, which made up for the fees they took me.
I was able to downgrade to regular account this one time.
For next time, I'll know not to put a paypal address directly in an auction, but to ask the seller to contact me first and only pay from bank account funds (and not a credit card)

(second update: reply from paypal, and my reply)

On Tue, Oct 23, 2007 at 10:22:43AM -0500, webform@paypal.com wrote:
> Hello my name is Jim, I am sorry to hear about the situation regarding downgrading your account, and I understand your frustration and concern over this issue. I am happy to assist you with your questions.

I called in friday and got my account downgraded.
Should this happen again, I'll just close my account next time.

> Personal accounts, as the name suggests, have always been intended for personal use only, and are not designed to be used for business purposes. PayPal considers the receiving of funds from eBay, Auction, or Website sales in excess of the Personal account limits to be beyond the normal level of personal use. By requiring Premier or Business accounts for all accounts that receive a large volume of payments from eBay, Auction or website sales, PayPal ensures that all high activity selling accounts are treated similarly.

That would be fine if it were the complete truth.
The part where paypal is being totally unfair and greedy is:

• I had only ebayed one item, and the buyer used his credit card by mistake instead of his bank account. Paypal forced me to upgrade to premier just for that one payment, and purposely removed the option to receive a credit card payment, or to have the buyer resend me a payment from his bank account through paypal.
  Note of course that you conveniently make it illegal by your own rules to accept paypal for an auction, and request not to accept credit card payments.
  What paypal is doing here to force me to upgrade against my will is despicable. What you are doing is that I will look elsewhere than ebay next time, and you will lose money instead of making more through so much greed.
  
• of course, charging 2-3% for person to person payments from paypal funds or a bank account, is close to theft. I will never use a premier account as long as you steal money that way.
  

I realize that you didn't make those rules, but feel free to forward my comments to your management.