Consumer complaint received 2016-03-28
Company: Paypal Holdings, Inc
State: AZ
Product: Money transfers
Sub-product: Domestic (US) money transfer
Issue: Incorrect/missing disclosures or info

Complaint:
On Friday XXXX XXXX, 2016 ( evening hour ) while utilizing a mobile device, I attempted to make a purchase of a product ( Parrot Food ) from XXXX. Once the item had been selected and placed into the purchase cart, XXXX has XXXX methods to check out for the consumer to pay for the order and for XXXX to receive their payment. 
# 1. Using their payment gateway the consumer can enter and submit the necessary credit card information to pay for the goods if the credit card information is approved. 
# 2. PayPal or Bill Me Later ( now known as PayPal Credit ). 
I chose to utilize my PayPal account for the method of funding source to checkout to remit my payment. Since I chose PayPal I was given the option to log into my account using a web browser or the PayPal app on my phone I chose the app. Once I logged into my account I was given a page for the purchase amount and the method of payment was utilizing my PayPal account balance as the source of funding this payment. There was also a link which I could change the method of payment ( funding source ) which took me to the apps wallet. The only methods I could use for funding the payment was my PayPal balance or PayPal Credit. I could not choose any of other PayPal confirmed approved methods of payment ( funding source ), such as my attached checking account or multiple credit cards. I called PayPal and spoke with a Rep. XXXX who stated if there is a PayPal balance PayPal will automatically use the balance first to fund the payment and if the balance is not sufficient then another form of payment method will be presented to you in order to pay the remaining balance. XXXX also stated if I transfer my PayPal balance to my attached checking account I will then be able to utilize any of my confirmed methods of payment ( checking account or credit cards ) .as a funding source. 
( Below is the section of PayPal 's User Agreement # 3. SENDING MONEY ) Personally, I do not think PayPal should have the legal right to force account holders to first use their PayPal balance as their chosen method of payment or funding source. As indicated in their Terms of Service it states ( If you have not selected a Preferred Payment Method, PayPal will fund your transaction in this order : ( see the order below ) My account does have a chosen pre-selected method of payment funding source as confirmed by PayPal Rep. XXXX who was called and confirmed this on XXXX/XXXX/16. All PayPal account holders should always be given the opportunity to chose any method of payment funding source which PayPal has verified and confirmed all financial accounts as the funding source prior to being used by account holders, such as checking account or credit cards which belonging to the account holders and have been previous vertified by PayPal as being a valid funding source in order to remit payments to persons or companies for goods or services, regardless if their side notations indicate ( *If you have a PayPal balance, we 'll use it first. ) This information controdicts their User Agreement ). 
XXXX PAYPAL USER AGREEMENT : # 3. ( SENDING MONEY ) 3.3 Default Payment Methods. When you make a payment, if you have not selected a Preferred Payment Method, PayPal will fund your transaction in this order : Balance Instant Transfer from your bank account PayPal Credit PayPal Cards Debit card Credit card eCheck *Note : If you do not want to use your Balance, you can withdraw it before making a payment. 
XXXX I will await for PayPal 's response to the information contained within this complaint and will respond to any further information if necessary.

Company response to consumer: Closed with explanation