PayPal did not make up this policy; it's based on Visa and MasterCard's Operating Regulations, which predate PayPal's very existence. I have first-hand experience that not only is this in virtually every merchant services contract at every bank in the US, but it's actually enforced, exactly the same way PayPal enforces it.
8 years back I had a sudden influx of chargebacks from a single scammer that used a bunch of different cards on one of my websites to buy services, back before I knew how to spot that kind of activity. My real, regulated bank (First National Bank of Omaha) terminated my merchant account and held several thousand dollars for exactly 180 days with no recourse for me. They never saw another chargeback against my account, but I still had no access to that money for 6 months. Exactly the same as PayPal does when it terminates an account for activity it deems high risk.
Yes, think about that. A merchant account -- where they hold your company's money -- relies on your personal credit score.
Anecdata: I had two chargebacks in five years of web software sales. Both claims were buyers ripping me off. I provided signed FedEx receipts for boxed software shipments and IP addresses/dates/times when the customer registered the software and downloaded updates. I ate the full cost (plus investigation and chargeback fees) both times. (This is "cost of doing business" and not an opportunity for a blog post, IMHO.)
From the post: "And thank god I made that [five figure] withdrawal when I did, because yesterday came the second phone call, informing me that a reserve would indeed be placed on my account."
I believe this action is what actually triggered the issue. If he paid the costs of running his business out of his PayPal account and took consistent monthly paychecks, it would have been far less of a flag.
Sucks that you have to do it, and we software types are famously short-tempered when it comes to dealing with real-world bureaucratic nonsense, but sometimes a bit of careful planning and playing the game wins the race.
I always have mixed feeling on these stories.
On the one hand, if you operate almost entirely online, you're in amidst a mass of scammers and conmen, it's a much higher risk, hence everything being more draconian. So there's always problems. Brick and mortar businesses are much less as there's a real presence, etc.
On the other hand, this is a long established business. Are they really that high-risk any more? Why are they treated like someone who's just started? Why can't Paypal treat them more respectfully as there's plenty of trading history. Why are there no mechanisms for establishing real identities that are much stronger than what they seem to be doing?
8Faces has been in print since 2010. That's a great start. It's not a really long time. Issue 5 is ready to pre-order. (Weirdly the author claims that they don't really do pre-orders, but on the website there is a huge banner telling people that they can pre-order issue 5.)
Magazine publishing is notoriously tricky, especially in the UK.
> Why can't Paypal treat them more respectfully as there's plenty of trading history. Why are there no mechanisms for establishing real identities that are much stronger than what they seem to be doing?
This is an excellent point. I can understand why Paypal don't have customer reps for every little nickel and dime trader, but a magazine doing £15,000 per issue is reasonably substantial amount of money. It'd be great if Paypal could establish identities (interviews? documentation?) and build relationships with the honest traders that use the service.
>It is therefore not possible for UK customers to obtain legal redress from the company in the English, Scottish, or Northern Irish Courts.
So he's not getting his £600 back through the courts.
But I actually think holding an issues worth of revenue in reserve is a decent enough compromise. If the company goes bankrupt before an issue ships, for whatever reason, PayPal themselves are going to be on the hook for refunding every single payment, as well as chargeback fees that may apply.
PayPal's fees are around 5% - what's their gross profit on each transaction, 1-2% at most?
So if there's a 2% chance of an issue going awry and angry people starting chargebacks, a magazine 50 issues old could turn into a net loss for PayPal overnight, which is why even merchants with long and clean track records get stung by this.
PayPal's freeze on that money means their end is covered, and you can still bring the sales to a bank and get a line of credit to cover the printing costs.
The way PayPal handles the customer service end rightfully earns their horrible reputation. But too many people act like the risk itself is not there, or that there's a clear, obvious line between fraudulent businesses that con artists start and solid trustworthy businesses that we start. If PayPal wasn't as aggressive with their fraud prevention, they'd be skinned alive.
And, as other people are pointing out in this thread, standard merchant accounts are not immune from the same level of shoot first, ask questions later fraud prevention.
That's especially true for PayPal now. Before merchants didn't have much choice. If PayPal continues to be seen as difficult and risky, the better-qualified merchants will be the first to shift to other services. That will leave PayPal with a much more risky customer base than they have now.
Money transfer systems are different. They draw a lot of dark, evil forces that try not just to hack their systems, but to game and abuse it through normal operations.
It's unfortunate that legitimate businesses get caught in the crossfire sometimes, but we rarely hear about how many credit card thieves PayPal's system rightful stops. (Answer: It's a lot.)
How do you know it is a lot if we rarely hear about it?
Point being: The precedent of putting Paypal under the behemoth of banking laws/PCI/Frank-Dodd is more frightening than people still willing to do business with them getting shafted. Dare I say, if it were easier and less regulated to move money through the interwebs, Paypal wouldn't be an issue.
So your suggested way around this is to incur credit charges & pay for the credit risk baked into the interest rate all so that Paypal is covered?
The merchant is, if I understand the post correctly, taking orders, using the money to print a run, then shipping them.
The risk is caused by the merchant's business model. It may not be high, but it certainly exists. Either the merchant, PayPal or consumers themselves must pay for it.
Who would you pick?
I want to share two things with all of you:
#1 — there's a massive culture change happening at PayPal right now. If we suck at something, we now face it, and we do something about it.
#2 — you have my commitment to make this company GREAT again. We're reinventing how we work, our products, our platforms, our APIs, and our policies. This WILL change, and we won't rest until you all see it. The first installments are due very soon. So stay tuned...
That's where the positives end for me however. For Paypal, I fear it's too little too late. You've done too much damage to yourselves. I get the reasons why you do things, but the communication over the last years has been atrocious.
We're in the UK and are just waiting for Stripe to come over. I think a lot of other businesses are thinking along the same lines as well.
Your fee structure is pretty expensive as well. There's also a lot of hidden costs:
- We're on an upper tier so should have a reduced commission rate. However, after scratching my head for ages as to why a majority of our sales are not at the lowered rate I finally find the link about cross border fees or whatever reason you use to charge us more. As an example, some of our $119 USD sales have $4.35 fees which is ~3.7%. Our current rate it says on our account should be 1.9%. Your fees structure is not as clear as it should be.
- Have you tried issuing a refund in a different currency? You have to draw money from your bank (even if there are available funds), which is converted to the correct currency which because your spreads as so expensive means sometimes refunds cost us money. I phoned up about this and they told me to open different currency balances which I did and which fixed the issue, but again, bad communication and a broken process
- Related to the previous point, your spreads on foreign conversions are high. I think they've improved a bit over the last couple of years but I still consider them an expensive hidden cost. I contacted Stripe asking what spreads they offer, and they told me they would consider it a hidden cost and they offer customers the same spreads the banks give them.
Also, your website is mind bogglingly slow. See this support ticket I opened: https://www.paypal-community.com/t5/Access-and-security/Why-...
The support person didn't do anything about it. I didn't expect them to though, as Paypal is an impenetrable behemoth that doesn't seem to care about these sorts of things.
Your website being as slow as it is, mind numbingly slow, is honestly enough reason alone for me to move service. Trying to find transactions just is a huge waste of my time waiting for each page to load. Try using your sandbox with pages that load that slow.
> there's a massive culture change happening at PayPal right now. If we suck at something, we now face it, and we do something about it.
So can you make your website faster for a start?
Yes, but just for my part I'd certainly let them take another couple of percent (on top of the 3.9% I'm already paying with Pro) for better service :-)
2. there were many instances where you were greedy ( diaspora, wikileaks). Alot of stories in IM forums that you freeze money from vendors and never return the money ( to either side).
3. tens of thousands vendors are waiting for stripe to go abroad including me so we could run away from your draconian "service"
Paypal, your transparency sucks. If my account is fishy, tell what it is. We're no longer in the McCarthy times.
And besides, I'm living in the EU. US rules are not always popular for us.
It makes no sense, but if you don't like it your option is to not accept Visa. They own the customer so they make the rules. It doesn't matter if its PayPal, Stripe, or any other merchant - if your buyer initiates a chargeback, you'll lose the money until its resolved (~6 months, usually).
As such, PayPal/Stripe/any other merchant account will hold your money for a period of time, until they are comfortable that either:
1) its been long enough that a chargeback is unlikely
2) they'll be able to get the money back from you if a chargeback occurs later.
Also relevant to this specific case: its against the TOS of Visa/MC/AMEX/etc to charge the buyer before shipment. You're supposed to authorize at time of purchase and capture only when you actually ship the goods. The OP seems to blatantly violate this, and I suspect they'll have to change the practice regardless of their choice of merchant account.
None of this excuses PayPal's lack of customer support. But Stripe et. all may not be the panacea you're hoping for. Credit cards are where these crazy policies originate, and unless you're prepared to stop accepting them, you'll have to play ball.
I also believed this to be true, but wouldn't that mean Kickstarter (and therefore Amazon) are flagrantly violating T&Cs? I wonder if Amazon has a special arrangement with the main card issuers in this regard.
There are some FTC rules about this too, IIRC, that a product must ship within a certain period following payment. I once worked with a company where this was an issue: they had to provide a great deal of data to the FTC to plead their case.
Here in Australia, my bank told me they were obligated to have a chargeback process resolved within 90 days.
Not sure if its a legal thing or just their own internal policy (Westpac).
I think the problem here is that they really don't have any kind of a real relationship with their customers.
As an honest business person --not a scammer-- when this kind of thing happens to you it is horribly disruptive and demoralizing. As honest people we should be spending time on our business rather than trying to get our money out of a company that has totalitarian control over it. It could, and has, sink a business.
That said, I feel the OP may have triggered the freeze by clearing the account of nearly all funds a couple of days after the phone interview. If I were looking at that data I would see it as a potential red flag. It would almost be irresponsible not to interpret it that way.
I've had sales in excess of $20K (meaning, the invoice for that particular purchase was $20K) come into one of our Paypal accounts and have never had any issues. Then again, the money tends to stay in the account for months. I don't think they've ever seen us clear large amounts of money out of the account immediately after a large sale. That, I am sure, builds trust, even at the algorithmic level.
Right, but you've been doing that with regularity. It's all about patterns. In addition to that, you are not doing this a day or two after having a probing conversation with a Paypal representative who obviously called with concerns about your account. Huge difference.
I can take almost any amount I want out of our Paypal accounts and it has never triggered so much as a warning email. Our track record (~10 years) is pretty solid.
It would be very helpful for someone to post (from experience and/or inside knowledge) a "How work with PayPal and avoid problems" FAQ
Then there's their automated fraud prevention system that is just too trigger happy. As an example: I bought an item on eBay the other week and they refused to process the payment. A couple of days later I decided to try again before buying from another seller and it went through without issues.
If you're running an on-going business that has multiple to many transactions everyday over long periods of time, then I suspect that you're less likely to trigger these problems. But again, YMMV.
Additionally, many have issues with the fees. Going back to eBay, you get hit with fees for both services, and I think many just see it as being too much given other emerging comparable services.
"I used ebay, something went wrong, here's my post" vs "I used ebay, everything went smoothly, here's my post".
Obviously you're going to have many more posts where things go wrong, but that doesn't tell you anything about the total number of transactions, nor the successful transactions.
He might have argued the point, but in this particular example a simple explanation of "We are concerned about liability if you cancel an issue before the physical version is delivered. The hold on funds helps protect us in that event".
The Paypal model fits small transactions and small volume. As soon as you are big enough to feel like you deserve / expect such an explanation it is probably just time to move on.
The result of this is Paypal saying I owed them £65, but that once paid they would not return this to the companies and the companies sating that I owed them nominal amounts each.
I repaid the companies in cash through the post (I even converted it to the correct currency) and have squared things with them, and Paypal is still saying I owe them £65.
I have told Paypal that as they paid out £65 and then took it back, they are currently level and are not owed any money and informed them to cancel the outgoing payments as I have paid them myself, but they continue to persist with the idea that I owe them money.
They refuse to let me add another card to my account to pay off this amount (the card I originally used is Spanish and I don't use it anymore, the balance on it is, however +£0.47) and I refuse to lose money having it converted over to Euros.
As a result I have cancelled all existing usage of paypal and now pay from a credit card instead and I refuse to either pay Paypal the money I supposedly owe them or add more funds to my old account to have them take it away (leaving them £65 in the green and me in the minus)
My experience of Paypal customer services is poor service and automated responses, if it was possible to talk to a human this would have been sorted months ago, but as a result of their ineptitude they have lost a customer who was doing daily business with them in the order of £100 - £200 incoming and outgoing.
It's not much income to them, but I will no longer use their service and if enough people follow suit it will make a difference.
And for the record, the freeze they placed on my account over such a nominal amount cost me around £750 in lost sales before I began re-routing to my credit card, but I doubt very much they will offer to refund this.
Are your customers exclusively in North America? Or do you just write those customers off (which is a valid option if PayPal integration would be that painful)?
Adding PayPal as a payment option has been an enormous pain for us but a non-consequently amount of our revenue comes from customers either without credit cards or with cards which always fail on international transactions. I see no alternative to PayPal for these customers.
If you don't use PayPal, how do you receive payment from
customers who don't have credit cards?
Examples (no affiliations): http://gharpay.in/ - Home cash pickup; https://www.itzcash.com/ - Prepaid Cash card; Mobile Money services in Africa such as M-Pesa - http://en.wikipedia.org/wiki/M-Pesa
Maybe it doesn't scale too well, but at her business scale it still works for the exception cases and money is money. If you're biggest problem is too many people depositing money to your bank account, that's not a bad problem.
Moneybookers interface is terrible, and they will expose your customers to this horrible interface. Their customer service seems to be confused but I've never heard horror stories.
There are payment solutions geared towards European customers so that you can accept bank transfers, etc.
In fact, everyone I know has at least one debit card (either MasterCard or VISA), aside from the number of people who have an AMEX/VISA (credit type).
And debit cards work everywhere. I've used my VISA Electron (debit) pretty much everywhere in the developed world, both online and travelling abroad.
Where payment options are concerned, VISA/Mastercard branded debit cards are the exact same thing as credit cards. And in many countries, the average citizen has neither. They may have a debit card that's part of some national payment network, they may be used to buying stuff online via their mobile phone account, or in cash at their corner convenience store, or via wire transfer from their bank account.
Paypal allows payment via a MANY such schemes you have never heard about. That is their USP, and something no startup can easily "disrupt".
For a consumer, Paypal makes it very easy to manage payments, receipts, and any other issues.
By the way, never ever use a debt card online. You're handing over access to your bank account.
Me? Got my first credit card with 30, when I moved to Israel. That thing's invalid by now. Here in Germany I have a direct debit card (likely ~everyone~ has one, it's the one you use for the ATM as well), issued by my bank.
Now, I can use Paypal. In Germany (and probably more places) they offer to connect a regular bank account. So - Paypal can withdraw from my bank account, I can pay with Paypal where people otherwise insist on a type of payment that I don't like (Paypal's not the nicest thing ever by itself, but 'it works').
In my circle, credit cards are still mistrusted, ~rare~ (as in at least 2 out of 3 won't have one) and really just for collecting debt or buying stuff on your company's name. People around me are waiting for Google Play (oh I HATE that name) gift cards, because they'd really like to buy apps some time..
News flash buddy, population of Earth > potential customers > "everyone you know".
In the UK we have "prepaid credit cards"[1] which could be useful for some people who are otherwise unable to get credit.
[1] confusing name, because they never give you credit, and I don't think they have the same protections as normal credit cards.
Paypal is just giving every opportunity for someone else to come and get their market share. Hopefully it will happen sooner rather than later.
If neither Amazon nor Google's brand recognition hasn't convinced folks (buyers or sellers) to start pushing it instead of PayPal for Internet purchases, I can only hope it's because their solutions are equally terrible - otherwise, I have a hard time seeing how a new player will make headway in this space. And I'd really like a new player. :/
It also had an even worse payment flow than paypal. Which is saying something.
You can't ignore early adopters like that so no-one switched.
Also seem to remember it didn't take payments from a lot of countries. Could be wrong.
As a buyer (and not a merchant), I love Paypal because I can have it debit directly from by bank account instead of handing over my credit card information. I hate credit cards, and this combined with Paypal's two-factor authentication gives me some good peace of mind. I haven't seen any other services that provide direct-debit to Australians, and even if they did, they would be useless to me unless they were as ubiquitous as Paypal is. I can use Paypal just about everywhere except for Amazon and O'Reilly. At this point I wouldn't even consider using Amazon or Google Wallet for purchases.
On the other hand, these horror stories have made me very wary of the merchant side of Paypal, and I'd definitely think twice about using them to process payments.
eBay would account for some of it. Also, payments is a relatively highly regulated market globally, as evidenced by Stripe trying to expand internationally.
We axed amazon soon after we integrated with them - I gather that now both the API and more importantly the UI are much better, and people can sucessfully use their pre-existing amazon accounts. That would be huge.
Google we still support, but it's usage has plummeted from a low starting place on our site. It'll be dropped on the next rev of the our UI.
I'm from the Netherlands and if you're a freelancer here you need to provide income statements for 3 years before you can get a credit card.
That meant that until last year I couldn't buy a thing with Google Wallet or Amazon Payments without asking my family for a credit card.
The only thing that worked for me was PayPal (and the iTunes store.)
Network effects, name recognition, and forced integration with the only online auction site that matters.
You know how every time a new payment provider comes up and people kvelch that it isn't available in their country and how no provider is? This is because every payment provider which attempts to hit as many countries as Paypal does dies. They're killed by fraud. (Fraud kills domestic ones, too, all the time, but it's marginally less frequent.)
Luckily, Paypal is an anti-fraud AI company which also happens to run credit cards sometimes. When in doubt, they will always come down on the conservative side. This is why they still exist. (Early in their corporate history they lost -- no kidding -- one hundred million dollars to fraud.)
This perception does not actually match reality, though: most people bitten by this are unaware that similar activity would get them shut down by the fraud department at e.g. a bank. See comments by dangrossman, etc.
IMO Paypal swung quickly from being too sloppy to being too conservative. The fraud they missed a few years ago was easy to catch - it was from sketchy sites and the products were being shipped to PO boxes nowhere close to where I live. Paypal is playing a dangerous game now by shutting down people's accounts because their strength comes from a network effect within a potential monopoly (unlike Chase); every person they ban from paypal removes the legitimacy of their service a little.
BTW Paypal's fraud team was only built up to a solid point in the past 3-4 years. I know this because I used to work in the industry.
The thing is, it shouldn't take much in the way of "AI" to recognize that a company that has already been doing business for several months or even years is probably not going to wake up one morning and start defrauding people. Criminals are lazy, and running a business is a lot of work. It would take about 30 seconds' worth of review time on the part of a moderately low-paid staffer at PayPal to avoid most of these PayPal Media Debacle of the Week stories.
I simply cannot believe that it's that hard to distinguish between a fraudulent user and a real one, given the presence of a significant transaction history. New accounts opened by people with no discernible history? Yes, they should freeze/ban/lock first and ask questions later. Accounts that are clearly used as part of a business? Give the customer the benefit of the doubt, or at least a 5-minute phone call.
I'm willing to bet that in the beginning, when they were mainly trying to court businesses to implement their service, the situation was different.
* At most merchant services providers, underwriting happens up front: you have to describe your business, what you're selling, expected volume, etc. on an application, and go back and forth with the bank, before you are allowed to accept credit cards. PayPal lets you start immediately, and only gets the information from you once you've started transacting some meaningful volume. So the risk problems are weeded out with other processors right at the start, where with PayPal it can come up suddenly.
* These people have never even thought about underwriting and risk assessment. They treat PayPal as if it's a consumer service, when PayPal has to treat it seriously -- they're essentially making a rolling loan in the amount of 6 months of your transaction volume -- because if you disappear, they're on the hook for the chargebacks for all your past payments. People do stuff no other processor would let them do -- like taking massive donations with no prior approval, selling pre-orders to software that hasn't been written yet -- and PayPal isn't OK with it either once they find out.
* PayPal merchants are disproportionately more often individuals than actual businesses compared to what other processors see... because it's so easy to open an account, and everyone that's used eBay already has one.
* Because the merchants are individuals, and have no experience with underwriting at other processors, and have previously used accounts suddenly limited or frozen, they're confused and surprised. Add to that customer service that won't really tell you much once an account's been closed, and you end up with a couple really angry people a month: cue blog post about how PayPal is evil and if only it were a bank, they couldn't do this.
They long ago could have introduced some sort of premier business account that drags serious merchants through a proper vetting process.
Then they could have made the "we're scared of you" experience for non-premier users much less confusing. They clearly have a lot of internal structure and rules. They want to keep some of that hidden, to minimize fraud hackery. But they could expose the broad strokes to users, make clear what state they're in, and offer them the opportunity to upgrade to properly vetted merchant accounts at any time. People aren't upset about the restrictions; it's their arbitrary, opaque nature that makes them seem so unfair.
I think the real problem here is that PayPal is owned by EBay. I hear EBay is getting better, but the place used to be a nightmare to work at, and one glance at their website tells you how thoroughly they're focusing on exploiting their existing model at the expense of trying anything new. With that kind of ownership, I figure anybody with a desire for innovation long ago left PayPal.
The result is that the system is treating them identically to how a bank would treat a more organized company; however, with an accountant on hand and an understanding of the rules, the organized company is much less likely to make silly mistakes (such as selling people a product that is shipped more than 48 hours later, already in violation of VISA's rules, to a third-party's address and then claiming that it is a "donation" and not a "purchase" <- an example from earlier this year).
There are also simply more players, as we are now talking about a bunch of couple-person companies that are using PayPal to accept credit cards, and even individuals who may not be incorporated at all but are using it to launch and sell products on their websites. These kinds of people are also much more likely to decide to attempt "lynch-mob" as their primary means of recourse against a company doing something they disliked, so we are doubly more likely to hear about situations.
However, as a merchant who operates something that many people (incorrectly) call sketchy, and one who has spent much too long learning all of the relevant tax regulations, reading up on credit cards, talking to people with real merchant accounts, and having meetings with banks about possibly using their service instead, my opinion is: PayPal is not that difficult to talk to and they are not actually unreasonable; there are things they are incompetent at, but this isn't one of them.
Paypal's profit margin is a small percentage of the value of a transaction. The potential losses due to fraud can go as high as 100% of the value of the transaction. I.e. their losses can be 50-100x as big as their gains.
Further, the selling point of Paypal is they let anyone who wants to set up shop and use Paypal for money transfers. The tradeoff you make by using Paypal is much lower setup costs (relative to a merchant account) for much higher risk.
Stripe et. al. are the credit unions of the card processing world -- they can offer more personalized service. But they also can't really scale and meet all demand, or handle the very largest accounts, without putting many PayPal-esque structures in place.
Great, and I will keep not using your site, and I will keep filing complaints through every forum possible until we eventually end up on a new site and the circle of life of
useful startup--->gets an ego and stops caring about customers--->replaced by new useful startup
continues.
EDIT: The best part was they accused me of three things: 1) Being a newer member (I opened my account in 2000 so I'm not sure I agree.) 2) Not having enough account history. (In the 12 years I've been a member I tend to make 1-2 transactions per month). 3) The transaction being "abnormally large". (I get paid rent and pay rent through the account for thousands of dollars at a time, the transaction in question was for $400 dollars)
basically paypal can diagf.
We use Stripe and I couldn't be happier. Started with Paypal, wanted to shoot myself on a regular basis.
I've been hearing a lot about Stripe lately, but haven't used it yet.
So PayPal doesn't have to operate by the same rules. When you use PayPal, you are putting money into PayPal's bank account and hoping they act in your best interests.
A reasonable person (I feel) would conclude PayPal is a de facto merchant acquiring bank, especially given the volume, and therefore should be required to operate under those laws.
Of course, PayPal knows the real money is in becoming a card scheme, so it's only a matter of time before we see that (not co-branded with MasterCard). At least they'd have to operate under existing card scheme laws, but I sure as heck wouldn't use one.
I had nearly $40k (ALL of my upstart company's capital) held for 180 days, and I almost went out of business. My products unexpectedly sold better than we had planned for, and we received a few chargebacks, that we had asked Paypal how we should handle before they occurred. The chargebacks were a very small amount, but they held the ENTIRE BALANCE. I couldnt pay for any of the inventory, which led to a chain reaction of chargebacks.
What made it even worse - THEY NEVER REFUNDED the customers on time and did not allow us, the merchant, to process the refunds --- IT WAS THE ULTIMATE BUSINESS NIGHTMARE!!! We started out as victims of our own sucess. Instead of helping us, we almost became victims of Paypal!
The best part about them giving buyers refunds is that if you, as a seller, want to dispute their chargeback, you have to pay Paypal an administrative fee ^_^
Another cause that it will freeze an account is when it suspects the account is used for illegal activities (e.g. selling fake goods).
Please note I am in no way implying the OP is involved in any of these. I am just making some guess on why PP may shut down/freeze accounts.
Chargebacks are filed a month or two later by owners of these stolen credit cards.
In return for being cheaper and faster there are trade offs. As stated in the article, this person's business model is a "high risk" one in general and to PayPal in particular. This is a great example of where a merchant account with a bank really is the better option. They need to met you, understand your business and why it works the way it does. Once done, you're less likely to have ongoing issues. So, you can keep your "higher risk" business model and change from PayPal or you can change your business model to better fit with PayPal. I don't think you can have both.
PayPal is a family sedan. This guy is lamenting that his vehicle doesn't perform the way he wants it to at high speed on twisty mountain roads. Seems like an unfair car review in that sense.
As others noted - it would look very strange to PayPal if you basically pull all your funds two days after that call. Who knows what else he inadvertently did to raise suspicion.
Bullshit. If you're going to process payments, you have to solve hard problems like fraud prevention, and PayPal is doing a dreadful job solving them. Freezing accounts isn't the problem; the problem is that PayPal is a giant black pit offering no way to resolve any issues. This is customer-hostile behavior. Shoot first, ask no questions later.
(Disclosure: I work at Braintree)
Oh, and I just signed up for Zoompass.
Square would solve the problem for many, but... would the average person carry around a hardware device so their friends can give them money by cell phone? Probably not.
Has anyone used it? Is there a catch? How do customers react?
As far as we can tell, there is only one catch, but it's a big one: you can only take payments from bank accounts within the reach of their direct debit system. That means UK-only today, and they've announced their intent to expand across Europe in "mid-2012" [1], but it's not clear when they might go any further.
We also work from the same office as GC and they're good guys. Always on the phone with customers, helping out and listening to feedback.
That is precisely the problem, PayPal is on the hook for any credit card charges for 6 months so they are much more willing to protect themselves then to try to understand a specific situation. They are a black box when it comes to these types of issues, you feed lots of information in but you get almost nothing in return.
Banks usually transfer funds nightly and they don’t hold subscriber information hostage.
It would be one thing if PayPal was amazing to use but they are just one technical or customer service blunder after another.
Maybe this just happens to all payment companies at scale, but it seems like PayPal has a lot of stories from ordinary-sounding, reasonable-sounding people who were just trying to sell something and ended up losing all their money. Who's responsible for those service delivery failures?
I certainly wouldn't set up any of my businesses to rely on PayPal to take payments, and I expect many others feel the same way.
Many merchants are just simply turning to the ACH Platform.
Once you pay someone with BTC, your money is gone. It's that simple. Unless you involve a third party of some kind, and then it's PayPal all over again... though I assume it's a great deal easier to become a BTC middleman than a middleman of any established currency, due to lack of idiotic government red tape to jump through.
Bankers hate BTC because it removes them from inter-mediating people and their money, statists hate BTC because it nullifies their socialist dreams of gathering funds at will (printing money). Anonymity is just a nice bonus.
Bitcoin is valuable because it gives you a choice: you can either have third party to resolve issues and insure risks, or you can go by yourself. In case of paypal/visa/wire transfer you do not have such choice.
..which is just replaced with built-in inflation. At least the rate is predictable and static.
AMAZON, you are the scourge of the internet.
Please see :