Burning man defeats PayPal(fastcompany.com)
fastcompany.com
Burning man defeats PayPal
http://www.fastcompany.com/1680570/burning-man-defeat-paypal
101 comments
We had a nightmare like this when we first launched MyDunkTank and were using PayPal for our payment processing. They suspended our ability to accept payments without warning or notification and then dragged us through a ridiculous and costly paperwork process for over a week.
We supplied everything they asked for and more. They denied our appeal and then locked $2,600 in our account for 180 days without explanation. We worked every channel we could to get a more reasonable outcome and it was to no avail.
There were a few good people in the PayPal bureaucracy who became champions for us but they were powerless. It was very discouraging.
The irony is that PayPal originally challenged the man. Now they are the man.
We supplied everything they asked for and more. They denied our appeal and then locked $2,600 in our account for 180 days without explanation. We worked every channel we could to get a more reasonable outcome and it was to no avail.
There were a few good people in the PayPal bureaucracy who became champions for us but they were powerless. It was very discouraging.
The irony is that PayPal originally challenged the man. Now they are the man.
When you look into an abyss, the abyss also looks into you.
There are precious few "victory" stories over PayPal.
Unlike a credit card company, if they feel they might have to dip even 1 cent into their own profits to deal with a bad transaction, they will immediately kill an account, no matter how large or how old.
I simply do not understand why there are not more competitors to PayPal - don't these corporations see the billions PayPal has made (THREE BILLION profit per YEAR) and how they get to skirt all the rules and regulations that banks have to follow? Why not jump onboard and give consumers some choices?
Unlike a credit card company, if they feel they might have to dip even 1 cent into their own profits to deal with a bad transaction, they will immediately kill an account, no matter how large or how old.
I simply do not understand why there are not more competitors to PayPal - don't these corporations see the billions PayPal has made (THREE BILLION profit per YEAR) and how they get to skirt all the rules and regulations that banks have to follow? Why not jump onboard and give consumers some choices?
> I simply do not understand why there are not more competitors to PayPal
If you read the excellent interview with Max Levchin in Founders at Work, he alludes to the fact that PayPal is really just a state-of-the-art, best-in-class fraud detection system with a payment frontend. He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses.
If you read the excellent interview with Max Levchin in Founders at Work, he alludes to the fact that PayPal is really just a state-of-the-art, best-in-class fraud detection system with a payment frontend. He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses.
He forgot to mention it has an extremely large number of false positives using that system. The reason it might work is because they take/freeze money from innocent customers. The amount of horror stories about Paypal significantly outnumber the horror stories about regular banks or credit card companies.
The amount of horror stories about Paypal significantly outnumber the horror stories about regular banks or credit card companies.
I surmise this is because you're a techy and you talk to people who run businesses online on a regular basis. If you spent a lot of time on, e.g., credit card discussion boards (they exist), or spoke to "regular people" about their payment issues on a regular basis, I suspect you would come to the opposite conclusion in a hurry.
Paypal is not a scam which achieves profitability by freezing accounts. That is crazy talk.
I surmise this is because you're a techy and you talk to people who run businesses online on a regular basis. If you spent a lot of time on, e.g., credit card discussion boards (they exist), or spoke to "regular people" about their payment issues on a regular basis, I suspect you would come to the opposite conclusion in a hurry.
Paypal is not a scam which achieves profitability by freezing accounts. That is crazy talk.
You are right I'm a techy, I talk to people who run online businesses, they use PayPal and other methods. PayPal is by far the biggest problem when it comes to payment solutions. Also I'm from Europe, which means I talk to people who use the common solutions in Europe to deal with payments, which is direct bank transfers or an online alternative provided by banks (such as iDeal in Holland). While our banks don't require as much documentation as PayPal sometimes requires, you also don't have to threaten them with lawsuits to get your money (I've seen that happen). They even have an chief escalation officer who jumps in in case clients threaten them with lawsuits.
PayPal doesn't have the right to just freeze money for periods of 180 days without providing sufficient methods for their customers to quickly resolve the issues. 180 days for freezing all money for one suspicious transaction is absolutely ridiculous. I don't claim PayPal achieves profitability by freezing accounts, I do claim they regularly screw their own customers with questionable account balance freezes.
PayPal doesn't have the right to just freeze money for periods of 180 days without providing sufficient methods for their customers to quickly resolve the issues. 180 days for freezing all money for one suspicious transaction is absolutely ridiculous. I don't claim PayPal achieves profitability by freezing accounts, I do claim they regularly screw their own customers with questionable account balance freezes.
Banks in Europe are tightly controlled. You have no idea what it's like in the US.
Imagine a system where…
1. You pay a 20% fee to withdraw money from an ATM that doesn't belong to your bank.
2. The bank puts thru a charge they shouldn't, you run out of cash, and you get whacked with a $35 fee.
3. The bank charges you a monthly fee after that - another $35 fee.
4. The bank shuts off your card because you're in another city, meanwhile you're lost in the dark, and alone, and out of money, and can't get a cab.
And on and on and on…
Not to mention outright defrauding.
Imagine a system where…
1. You pay a 20% fee to withdraw money from an ATM that doesn't belong to your bank.
2. The bank puts thru a charge they shouldn't, you run out of cash, and you get whacked with a $35 fee.
3. The bank charges you a monthly fee after that - another $35 fee.
4. The bank shuts off your card because you're in another city, meanwhile you're lost in the dark, and alone, and out of money, and can't get a cab.
And on and on and on…
Not to mention outright defrauding.
The biggest problem with the North American banking system is the reliance on the antiquated cheque system. In the EU I can send money to any other EU bank account quickly with little or no fee. You can pay bills and send money - and no need for an intermediatary like paypal. The inherently insecure concept of letting others pull money out of your account don't exist. Pushing money also reduces the whole range of service fees relating to bounced cheques and insufficient funds.
1. It's a 20% fee when you request $10, or a 2% fee if you request $100.
2. Overdraft fees are disallowed by law and are opt-in now.
4. Also, it's not typically the banks that cancel cards, it's the processing network that does.
Most problems people have with banks are user-error, plain and simple. When you misuse a computer program, you waste time. When you misuse a bank, they charge you money.
2. Overdraft fees are disallowed by law and are opt-in now.
4. Also, it's not typically the banks that cancel cards, it's the processing network that does.
Most problems people have with banks are user-error, plain and simple. When you misuse a computer program, you waste time. When you misuse a bank, they charge you money.
re #2: Overdraft fees are only opt-in for certain classes of transactions, namely ATM and non-recurring debit transactions.
Checks, ACH transfers, and recurring debit transactions can still generate overdraft fees without an opt-in consent.
re #4: The networks pulls the trigger, but the standing orders come from the issuing institutions. Fraud detection is often used as a differentiation feature by the networks to attract bank customers, the networks themselves don't have a direct incentive to prevent fraudulent transactions beyond this: they don't stand to take a loss.
Checks, ACH transfers, and recurring debit transactions can still generate overdraft fees without an opt-in consent.
re #4: The networks pulls the trigger, but the standing orders come from the issuing institutions. Fraud detection is often used as a differentiation feature by the networks to attract bank customers, the networks themselves don't have a direct incentive to prevent fraudulent transactions beyond this: they don't stand to take a loss.
The most I paid was $6.50 to withdraw - $2 on my bank's end and $4.50 on the end of the usurious ATM.
That kind of thing is illegal in other countries.
Even a 2% fee is usurious. That right there sucks up any potential interest gain you'd ever have.
In Austria, all ATMs are free, on both ends.
That kind of thing is illegal in other countries.
Even a 2% fee is usurious. That right there sucks up any potential interest gain you'd ever have.
In Austria, all ATMs are free, on both ends.
It's not crazy talk. I had a terrible experience with PayPal six months ago. I didn't believe all the horror stories and opened an account with them. They decided there was a problem and froze my account - but they neglected to tell me and continued accepting deposits, the freeze only applied to withdrawals. It was extremely difficult to recover my money.
The point is, there are no rules, there is no transparency. Their decisions are entirely arbitrary and you are at their mercy. Never again.
The point is, there are no rules, there is no transparency. Their decisions are entirely arbitrary and you are at their mercy. Never again.
Paypal is not a scam which achieves profitability by freezing accounts. That is crazy talk.
I don't know that Paypal ever achieved profitability. They raised a whole lot of capital, and then when it looked like they might fold, eBay stepped in to make sure they didn't. Paypal's lack of profitability was legendary when I was in online payments, since they were the Microsoft of the industry.
I don't know that Paypal ever achieved profitability. They raised a whole lot of capital, and then when it looked like they might fold, eBay stepped in to make sure they didn't. Paypal's lack of profitability was legendary when I was in online payments, since they were the Microsoft of the industry.
They have achieved profitability, in dump truck loads. In the beginning, they didn't take any fees and so were burning through cash at a terrific rate, now it's around 3%, which is well above the CC processing fees for them, and miles higher than the bank ACH fees on those transactions.
This is probably only because the bank horror stories are (mainly) small: a late fee here, an overdraft fee or two or three there, a bumped up credit card interest rate, etc. The banks probably do as much per customer as PayPal, but they spread the pain out, so it isn't quite as noticeable.
Yeah that probably explain why their customer service is horrible, they see it as an afterthought. I don't have an issue with them trying to kill fraud but there needs to be better communication between Paypal and it's business customers.
I wouldn't be surprised if at one point the government come in and tries to apply credit card regulation to them if thats not already the case.
I wouldn't be surprised if at one point the government come in and tries to apply credit card regulation to them if thats not already the case.
Paypal is already a bank in the EU.
http://en.wikipedia.org/wiki/PayPal#Bank_status
http://en.wikipedia.org/wiki/PayPal#Bank_status
Paypal has roughly 8000 employees of which 7500 work in fraud and customer services none of which is outsourced. It's not that they are not taking it seriously..
Their customer support tends to be really good in my experience, don't base too much on the one in a million horror stories that make it to this site.
Their customer support tends to be really good in my experience, don't base too much on the one in a million horror stories that make it to this site.
"He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses."
It seems to me that deal with fraud is an important part of any bank's business.
It seems to me that deal with fraud is an important part of any bank's business.
From the interview:
"We started with this, 'Fraud is going to kill us. What can we do to save ourselves?' They started from, 'We have no fraud. How can we build this and not let any fraud in'
He also goes says something about how in the Internet world it is very hard to verify someone - the more information you get to verify (e.g. PayPal verified account) - the more 'safe' user you are. And something about how the Banks couldn't do this (virtual transactions) because most of them were public companies and couldn't hide $10m/month in fraud losses (what PayPal was losing a month to fraud at that critical point) and not spook their institutional investors.
"We started with this, 'Fraud is going to kill us. What can we do to save ourselves?' They started from, 'We have no fraud. How can we build this and not let any fraud in'
He also goes says something about how in the Internet world it is very hard to verify someone - the more information you get to verify (e.g. PayPal verified account) - the more 'safe' user you are. And something about how the Banks couldn't do this (virtual transactions) because most of them were public companies and couldn't hide $10m/month in fraud losses (what PayPal was losing a month to fraud at that critical point) and not spook their institutional investors.
Are you familiar with epassporte?
https://www.epassporte.com/
One of the reasons why newcomers have relatively little chance is because credit card companies hate start-ups that do wallet systems.
https://www.epassporte.com/
One of the reasons why newcomers have relatively little chance is because credit card companies hate start-ups that do wallet systems.
I hear way too many stories about this. I was even paying a company through PayPal when they had their account frozen and their money taken. 3 times. The company continued to use them because so many of their customers demanded PayPal. They had continued to use PayPal because it was cheaper to lose their funds (they regularly withdrew) than the customers. After the third time losing everything in their account, they finally had to tell their customers 'no PayPal' and live with the consequences.
Yes, you read that right... PayPal took every cent in their account 3 times. And there's no law against it.
Yes, you read that right... PayPal took every cent in their account 3 times. And there's no law against it.
That seems like something you could sue them for. Is this not an option for people? (In small claims court at least.)
What is a better alternative?
I understand Google Checkout also had similar issues in the past?
I understand Google Checkout also had similar issues in the past?
It's all fairly muddled: http://www.merchantequip.com/merchant-account-blog/1027/a-co....
I imagine PayPal gets the worst rep because of its larger user base - though I could be wrong. Google Checkout has some horror stories, too.
One of the last times this was discussed, a YC-funded start-up was mentioned: http://ycombinator.posterous.com/need-to-process-payments. I haven't seen nor heard anything about it, and it's US-only, but maybe pg can give us the inside scoop on the progress.
I imagine PayPal gets the worst rep because of its larger user base - though I could be wrong. Google Checkout has some horror stories, too.
One of the last times this was discussed, a YC-funded start-up was mentioned: http://ycombinator.posterous.com/need-to-process-payments. I haven't seen nor heard anything about it, and it's US-only, but maybe pg can give us the inside scoop on the progress.
I've yet to use it myself, and I'm not sure if it's entirely been released yet, but Amazon has a payments system in the works: http://aws.amazon.com/fps/
It seems to have been out for a while. Does anyone have any experience with FPS? I'm launching a new project soon and the one thing left is payment processing. I'm scared to be tied to just PayPal and am looking into Google Checkout and Amazon as well.
I know, I know, just get a merchant account. And I will. But this is not really a startup or company and much more of just a small idea I'd like to test out. Ideally, if it picks up steam, I'll switch over to a real merchant account.
I know, I know, just get a merchant account. And I will. But this is not really a startup or company and much more of just a small idea I'd like to test out. Ideally, if it picks up steam, I'll switch over to a real merchant account.
I believe buyers need an Amazon account or Amazon FPS account to use Amazon FPS. How about an alternative to just accept CC# like Paypal's Website Payments Pro? (without needing a separate internet merchant account)
[deleted]
(My startup) ThinkLink / FaceCash
http://www.thinklink.com
http://www.thinklink.com
Do I have to have a Social Security number and driver's
license with a photo to sign up?
Yes. You can use a passport as an alternative to a
driver's license.
Correct. As our sign up page indicates, we're only in the U.S. right now.
Here is another example of how PayPal is a bit shady:
Sign into PayPal to send money. If you have a credit card as a payment method and a bank account as a payment method, PayPal will auto select your bank account. That's fine, except when you change your payment method from the default bank account to your credit card. A confirmation page comes up and tries to change your selection back to your bank account. There are two options: Use Bank Account / Use Credit Card. These options are randomly changed back and forth to confuse the user. Even the highlighting of these to option (which one is yellow) is randomized to make you accidently select the Bank Account option.
Sign into PayPal to send money. If you have a credit card as a payment method and a bank account as a payment method, PayPal will auto select your bank account. That's fine, except when you change your payment method from the default bank account to your credit card. A confirmation page comes up and tries to change your selection back to your bank account. There are two options: Use Bank Account / Use Credit Card. These options are randomly changed back and forth to confuse the user. Even the highlighting of these to option (which one is yellow) is randomized to make you accidently select the Bank Account option.
Yes! I mainly use my credit card for everything online, including paypal, and that trick does get me on some occasions when I'm not paying close attention. It's probably a cost saving measure as credit cards most likely cost more to transact with than bank accounts.
Indeed. ACH processing is dirt cheap. I also wouldn't be surprised if the terms of ACH transactions are more favorable to PayPal than those of MasterCard/VISA.
The ACH system has very strict rules guaranteeing payments once they clear the network, as opposed to the more consumer friendly rules that the card networks offer. ACH, afterall, is meant to be used by financial institutions that know exactly what they're doing.
The ACH system has very strict rules guaranteeing payments once they clear the network, as opposed to the more consumer friendly rules that the card networks offer. ACH, afterall, is meant to be used by financial institutions that know exactly what they're doing.
I recently sent a payment from my Paypal account to someone else's. I thought I specified that the payment should be taken out of the credit card source, and not the bank account source. I saw a success page, closed my browser tab, and thought nothing more of it. Later, I received an email indicating that the recent payment I made "failed" to get funded by the bank account, and that the credit card was used as a fallback.
Based on your description, your use of "a bit" is too generous.
I refuse to go near PayPal. We don't accept it for PadPressed. We might be losing some revenue, but I can't support paypal / leave ourselves open to the shit they pull. Same thing with a conference we're putting on in October. Not allowing PayPal as an option. I hope WePay or someone else succeeds as being a viable+robust alternative.
Use daily sweep.
My organization had this same problem. We formed a cooperative corporation, filed for tax exempt status, and then opened bank and PayPal accounts. Within 7 days of opening the PayPal account for our org, it was frozen on the grounds that extra documentation was needed. Before I could send those documents, PayPal then turned around and froze my personal account since the organization's account had my name as the "responsible party" contact.
The resolution? There hasn't been one. I tried to get PayPal to accept our tax-exempt documents, but they've refused because we're not a 501(c)3 charity (we are 501(c)12) and both the org and my personal accounts stay frozen.
The resolution? There hasn't been one. I tried to get PayPal to accept our tax-exempt documents, but they've refused because we're not a 501(c)3 charity (we are 501(c)12) and both the org and my personal accounts stay frozen.
Opencamp had similar issues, which only got resolved under public pressure
http://openca.mp/blog/the-paypal-and-opencamp-resolution/
I find it amusing that people still use Paypal. Its been widely documented that they're a horrible company for years now. I closed my account a few years ago and haven't looked back.
Paypal will not change their ways so long as people keep giving them money.
Paypal is not a bank and thus doesn't have to follow the same rules as a bank. Please people, quit treating it like its a bank. Do not store your money there. Do not link it to your primary checking or savings accounts.
Remember! Paypal will cause you great pain and serious amounts of anger. Its only a matter of time.
Paypal will not change their ways so long as people keep giving them money.
Paypal is not a bank and thus doesn't have to follow the same rules as a bank. Please people, quit treating it like its a bank. Do not store your money there. Do not link it to your primary checking or savings accounts.
Remember! Paypal will cause you great pain and serious amounts of anger. Its only a matter of time.
Can I just say, kudos to WePay for picking up the drop and landing the account. These guys kick ass.
Burners are an innovative, sharp, and down to earth bunch; I'm not surprised PayPal got "burned" by pulling what they did. Burners are also a big(ish) community, some of which are influential people in mainstream society.
Glad to see someone met their needs, WePay just got some damn good publicity.
Glad to see someone met their needs, WePay just got some damn good publicity.
The bigger news here is that PayPal is getting more negative publicity in mainstream press and that will, over time, force them to become more responsive.
A few hackers bitching in online forums is one thing, A large social media response in connection with a well known festival threatening to close accounts is going to be much more effective
A few hackers bitching in online forums is one thing, A large social media response in connection with a well known festival threatening to close accounts is going to be much more effective
This is why I withdraw all funds from PayPal every weekday morning.
PayPal has been the sole payment solution for my software company for more than 5 years. 99% of all of my money, my families money and my employees salaries goes through PayPal. When I bought my first home (at the end of 2005, oops...) I had to call PayPal to get some financial details for the mortgage company. I spoke with a nice person on the phone from PayPal and they faxed me the documentation I needed write away. Every time a new payment processor comes on the scene I check them out, but none have been able to offer the pricing or features I get via PayPal.
That being said. I have read all the horror stories. So I just assume that any money left in my PayPal account overnight could be potentially lost. No problem, I just withdraw it every morning so my lost potential is always minimal (a few grand).
I don't de recurring subscriptions. I imagine things would be different then. If I did subscriptions I think I would want my own merchant account - you want to own as much of the customer as you can.
PayPal has been the sole payment solution for my software company for more than 5 years. 99% of all of my money, my families money and my employees salaries goes through PayPal. When I bought my first home (at the end of 2005, oops...) I had to call PayPal to get some financial details for the mortgage company. I spoke with a nice person on the phone from PayPal and they faxed me the documentation I needed write away. Every time a new payment processor comes on the scene I check them out, but none have been able to offer the pricing or features I get via PayPal.
That being said. I have read all the horror stories. So I just assume that any money left in my PayPal account overnight could be potentially lost. No problem, I just withdraw it every morning so my lost potential is always minimal (a few grand).
I don't de recurring subscriptions. I imagine things would be different then. If I did subscriptions I think I would want my own merchant account - you want to own as much of the customer as you can.
Can we start the move to Google Checkout and Amazon Payments? They both charge the same amount of fees as PayPal yet do not have draconian policies and downright retarded treatment of their customers
Customer service with PayPal is a hundred times better than customer service with Google, in my experience. I've never had a problem getting CS on the phone with PayPal. Google is a different story.
Personally, I think the only options are PayPal or taking credit cards directly. Any other choice is just an obstacle to your customers, another account that they need to sign up for. Yes, people have Google accounts but do they have a credit card on file?
The funny thing is that the competitors don't undercut PayPal. It's no wonder they aren't getting much traction.
The funny thing is that the competitors don't undercut PayPal. It's no wonder they aren't getting much traction.
My wife is organizing a conference using a non-profit and is going through the same PayPal headaches.
This is extremely bad customer service. All PayPal has to do is (1) refuse to do business with non-profits or (2) present non-profits with an accurate description of what could happen (account freezing, etc.) before they sign-up. (Burying this in the terms of service doesn't count, by the way.) Customer service is as much about expectations as it is about delivering.
This is extremely bad customer service. All PayPal has to do is (1) refuse to do business with non-profits or (2) present non-profits with an accurate description of what could happen (account freezing, etc.) before they sign-up. (Burying this in the terms of service doesn't count, by the way.) Customer service is as much about expectations as it is about delivering.
Congrats to wepay. Great job on seizing a customer in trouble and meeting their needs. There are plenty of other frustrated pay pal customers, this could be a great starting point for wepay. Go get em wepay
PayPal is absolute trash for payment processing. Horror stories aplenty. Take the time to obtain a merchant account.
Wow, I did not know there was so much bad karma for Paypal. Does anyone know of alternatives for businesses not located in the US?
Reading this thread made me a little paranoid. So I logged into my high school reunion account (I'm the organizer) to withdraw the funds into our bank account, and lo!, of course there's a hold on one classmate's payment. That's $75 we may never see... at least not in time to pay our caterers and such.
seems like they folded to social pressure of the burner community which is vocal and well connected, but their change of heart was driven by wanting to further avoid a PR shit storm. Joe Q web company or individual has no chance of getting similar treatment.
The tl;dr version, "Burning man defeats PayPal by routing around it."
PayPal once made me refund every customer in the last 6 months. They said it was the only way to unfreeze my account. I gave them the thumbs up because I had no other options at the time, and they said, "you have to manually refund them one-by-one yourself and then call us when it is done". It was really strange.
They permanently froze my account after I refunded everyone and refused to talk to me when I called. I wasn't able to get a merchant account and I lost thousands of PayPal recurring subscriptions. This was the death of my first start-up.
PayPal is a scam and it's not as uncommon as you think. If you're using PayPal, your time will come. I didn't think they would do it to me either, they never bothered me once until all of this went down.
They permanently froze my account after I refunded everyone and refused to talk to me when I called. I wasn't able to get a merchant account and I lost thousands of PayPal recurring subscriptions. This was the death of my first start-up.
PayPal is a scam and it's not as uncommon as you think. If you're using PayPal, your time will come. I didn't think they would do it to me either, they never bothered me once until all of this went down.
Interesting to read that. I thought it is only Paypal Germany whose customer service is bad.
My experience with Paypal is, that they deliberately freeze my account and ask for private information and business details, that you really don't want to distribute. If I don't send them, the account remains frozen - well, I may upload money any time ;o).
And indeed, Paypal also doesn't talk to me anymore. They don't close my account on request, they don't respond to any kind of mails. Only the list of problems to resolve gets longer and longer.
Please read their terms and conditions. It is one document with numerous extensions, 48 pages as I counted them the last time! The way it is done looks to me like they want to make it impossible to understand (my personal interpretation). Try to find out under which circumstances Paypal may freeze your account or under which circumstances they transfer your money , as you request: It is their personal decision. There are no clear criteria given. It is a matter how much they think you can be trusted. Check it yourself.
Sorry for the rant. Hearing the name of Paypal really makes me angry.
Steve Jobs once said: I don't sign a contract that is longer than 1 page. Good advice.
And indeed, Paypal also doesn't talk to me anymore. They don't close my account on request, they don't respond to any kind of mails. Only the list of problems to resolve gets longer and longer.
Please read their terms and conditions. It is one document with numerous extensions, 48 pages as I counted them the last time! The way it is done looks to me like they want to make it impossible to understand (my personal interpretation). Try to find out under which circumstances Paypal may freeze your account or under which circumstances they transfer your money , as you request: It is their personal decision. There are no clear criteria given. It is a matter how much they think you can be trusted. Check it yourself.
Sorry for the rant. Hearing the name of Paypal really makes me angry.
Steve Jobs once said: I don't sign a contract that is longer than 1 page. Good advice.
He did?? Does he know the iTunes Music Store contract is a whopping 23 pages long, with some 112 sections? At least, it was as of early 2009, which was when I A) really read the thing and B) decided I was done with iTMS. (Full details at http://www.blahedo.org/blog/archives/001060.html .)
(EDIT: iTunes ≠ iTMS)
(EDIT: iTunes ≠ iTMS)
Well, iTunes is not for HIM to sign, its for YOU.
well, to be fair he never said what's the dimension of "the page" ;)
How in the world has PayPal managed to not be perpetually in court fighting off class action law suits?
I have a client who owns a bricks and mortar store that's been in business for about 15 years and employs about 20 people. They were using PayPal for payment processing on their website, when one day PayPal decided they didn't like the way the company was structured, and froze all funds.
Nothing they could do to appease PayPal. Six months later they got their money back, they now hate PayPal with a passion, and use eWay who have been great
Nothing they could do to appease PayPal. Six months later they got their money back, they now hate PayPal with a passion, and use eWay who have been great
We've been processing 5 figures a month with PayPal subscriptions for over 5 years (we've since moved to a different system but have a lot of legacy customers still on PayPal).
While I've had some odd issues here and there and the user experience for clients is poor, I've never had anything close to what you've described.
I have to say–either you're wrong about "your time will come" or there's simply more to your story.
While I've had some odd issues here and there and the user experience for clients is poor, I've never had anything close to what you've described.
I have to say–either you're wrong about "your time will come" or there's simply more to your story.
It sounds like your time hasn't come yet.
my experience with paypal has also been largely positive. I process between USD$10K and USD$20K a month in paypal payments.
As far as I can tell, they aren't much worse than most other payment processors. Most payment processors, if someone with bad credit comes along, or someone gets lots of chargebacks, or if someone is in a funny business sector, they keep some percentage of your money in escrow for a certain number of months.
Now, personally, I have a very liberal refund policy (and really, I think anyone who accepts paypal or credit cards should do the same... because anyone who wants to, with either of those methods, can get their money back, if they really want to.) so I generally don't get chargebacks on my papal account. My last 'dispute' in fact, was an accident... the guy says he meant to dispute the next transaction, with a different company.
and hell, if you tangle with the IRS, your regular bank account will get frozen.
Now, I have heard many, many paypal horror stories from non-profits.
I wonder if paypal is going overboard in cooperating with the US government (in this case, the government harassing not-for-profits who haven't lawyered up enough) to avoid the fate of e-gold?
The e-gold guys, as far as I can tell, were told 'freeze your business or we will throw your asses in jail.' I've still got around a hundred bucks in e-gold I can't access because of that.
E-gold was set up a the way a privacy nerd would set up a banking system, and they built a fairly secure system, but they ignored fraud, saying they were trying to be 'like cash' and first accumulated a reputation for serving the shady and outright fraudulent market, before being shut down by the government.
As far as I can tell, they aren't much worse than most other payment processors. Most payment processors, if someone with bad credit comes along, or someone gets lots of chargebacks, or if someone is in a funny business sector, they keep some percentage of your money in escrow for a certain number of months.
Now, personally, I have a very liberal refund policy (and really, I think anyone who accepts paypal or credit cards should do the same... because anyone who wants to, with either of those methods, can get their money back, if they really want to.) so I generally don't get chargebacks on my papal account. My last 'dispute' in fact, was an accident... the guy says he meant to dispute the next transaction, with a different company.
and hell, if you tangle with the IRS, your regular bank account will get frozen.
Now, I have heard many, many paypal horror stories from non-profits.
I wonder if paypal is going overboard in cooperating with the US government (in this case, the government harassing not-for-profits who haven't lawyered up enough) to avoid the fate of e-gold?
The e-gold guys, as far as I can tell, were told 'freeze your business or we will throw your asses in jail.' I've still got around a hundred bucks in e-gold I can't access because of that.
E-gold was set up a the way a privacy nerd would set up a banking system, and they built a fairly secure system, but they ignored fraud, saying they were trying to be 'like cash' and first accumulated a reputation for serving the shady and outright fraudulent market, before being shut down by the government.
Uhm.. there's another option you know? Like maybe your time hasn't come yet?
My guess is that you got lucky, flew under the radar and now the amount you're processing is substantial enough that they won't try to pull anything.
Either that or your time just hasn't come yet :)
Either that or your time just hasn't come yet :)
Well, that certainly sounds like half of a good story.
Yeah, this is the sort of thing that happens when a business decides that it will simply terminate communication with a customer without explanation. We don't get to hear their side of the story. The customer has no idea what's going on. That's a pretty bad business practice.
I've heard enough insane PayPal stories from enough people that I trust such that I have no trouble believing pinksoda.
I've heard enough insane PayPal stories from enough people that I trust such that I have no trouble believing pinksoda.
> We don't get to hear their side of the story. The customer has no idea what's going on. That's a pretty bad business practice.
That is the problem with pay pal. Dealing with them is like dealing with a roach motel: data and money go in, but nothing comes out. A sign of how abusive they are is that you cannot get a telephone number for them. There is no one you can call. No one you can send a certified/registered letter. Everything has to be via email.
That is the problem with pay pal. Dealing with them is like dealing with a roach motel: data and money go in, but nothing comes out. A sign of how abusive they are is that you cannot get a telephone number for them. There is no one you can call. No one you can send a certified/registered letter. Everything has to be via email.
Your point is well taken, but I have never seen a comment, here or elsewhere, where someone lauded the great PayPal service or the quick conflict resolution. It's always about being blindsided. Folks, if you have GOOD stories, those are worth posting for balance.
I am, among other things, [email protected].
Of course, this means that every Patrick, Patricia, Pedro, Paul, or Penelope Welch who leaves a numeral or something off their email address thinks they are [email protected]. Or one of their colleagues or friends thinks they are [email protected].
Long story made short, some idiot set up a Paypal account on my email address and now I can't get it off. I've contacted Paypal and nothing came of it.
Of course, this means that every Patrick, Patricia, Pedro, Paul, or Penelope Welch who leaves a numeral or something off their email address thinks they are [email protected]. Or one of their colleagues or friends thinks they are [email protected].
Long story made short, some idiot set up a Paypal account on my email address and now I can't get it off. I've contacted Paypal and nothing came of it.
The problem is, no amount of good stories can repair the damage done to those who trusted PayPal because "it works OK for most people". They may even have great customer support most of the time, but if they still do stuff like this, it reason enough to be very careful:
1) Never solely rely on PayPal for your income. 2) Never keep large amounts in your PayPal account - they can be come PayPals for 6m+ at a moments notice.
1) Never solely rely on PayPal for your income. 2) Never keep large amounts in your PayPal account - they can be come PayPals for 6m+ at a moments notice.
>1) Never solely rely on PayPal for your income.
This is VERY important to remember. If your business is making a good chunk of change a month you should be able to afford the card card processing fee your self. Get a REAL bank account, preferable somewhere local so you can go in and talk face-to-face with a person if an issue arises- more likely to get results this way. It's also easier for you to get scammed by scammers with paypal, not so much with a real bank as they will fight for you.
I am not saying, "never use paypal". As your business grows and matures make sure the way you handle your finances does as well. If you are able to process cards yourself you can also sell that service to other people or use it in another business venture. Build your empire, not someone else's.
Also hire/lease accountants. If you must use paypal for business ventures buy the business account. A lot of stories I've heard were from people who still used a personal account for their business.
This is VERY important to remember. If your business is making a good chunk of change a month you should be able to afford the card card processing fee your self. Get a REAL bank account, preferable somewhere local so you can go in and talk face-to-face with a person if an issue arises- more likely to get results this way. It's also easier for you to get scammed by scammers with paypal, not so much with a real bank as they will fight for you.
I am not saying, "never use paypal". As your business grows and matures make sure the way you handle your finances does as well. If you are able to process cards yourself you can also sell that service to other people or use it in another business venture. Build your empire, not someone else's.
Also hire/lease accountants. If you must use paypal for business ventures buy the business account. A lot of stories I've heard were from people who still used a personal account for their business.
Well the good story is pretty mundane. Here's mine: the payments have always gone through.
Point taken, but how about a story where there was a conflict that was settled quickly and fairly?
In my case, my account was flagged (the business was legit, but I could understand if they had some cause for concern), but it was such a hassle to satisfy them I gave up. I couldn't talk to a person; I had to send dozens of faxes; I couldn't even email - I had to use a stupid form with a character limit; it was never laid out what I had to do or how many steps remained.
In my case, my account was flagged (the business was legit, but I could understand if they had some cause for concern), but it was such a hassle to satisfy them I gave up. I couldn't talk to a person; I had to send dozens of faxes; I couldn't even email - I had to use a stupid form with a character limit; it was never laid out what I had to do or how many steps remained.
That's not a good story; that's what they're suppose to do on the most basic level. They don't deserve praise for that. They do, however, deserve a very bad reputation for stories like above. I have one myself and of others close to me but I'll leave it at that.
The false positives are one problem with PayPal; the customer support is another.
Customer support only gets a chance to prove itself once something goes south, and I get the impression that it's unequivocally bad.
If I am looking at buying a laptop, I don't care much about whether it's a matter of "if" or "when" it breaks, but how the customer service and repair shop handle it once it happens.
PayPal's "customer service" is the Damoclean sword that people fear moreso than the false positives. Because good customer service would be able to ameliorate most of their mess and admit errors on their end.
Customer support only gets a chance to prove itself once something goes south, and I get the impression that it's unequivocally bad.
If I am looking at buying a laptop, I don't care much about whether it's a matter of "if" or "when" it breaks, but how the customer service and repair shop handle it once it happens.
PayPal's "customer service" is the Damoclean sword that people fear moreso than the false positives. Because good customer service would be able to ameliorate most of their mess and admit errors on their end.
Except that's probably is most of the story. Seriously, PayPal do this kind of thing. I'm sure they do it to loads and loads of scammers (who presumably set up a whole lot of accounts) but they also do it to normal people just trying to use the service.
To every story there is also the other side of the story. They obviously don't freeze accounts account just like that for fun, so they certainly had some reasons to do so.
The story isn't really about them freezing the account. I think everyone accepts that PayPal needs to be vigilant against fraud, given the amount they deal with. The story is that that legitimate customers are pretty much powerless to unfreeze their accounts; there's no due process, no oversight, and no accountability. If PayPal decides to screw you, that's it. Game over. Thanks for the free money.
No, they freeze accounts when their automated system flags them. Things like you had more sales this week than normal. Then they won't talk to you or the people who will talk to you are so brain dead that they actually don't seem to understand what Paypal has already done or don't realise when they're asking you to do impossible things.
That's my experience with them anyway. Eventually got it all sorted out but at the cost of not being able to get at my money for about a month.
Just having friendly helpful customer support who can explain what's going on would make a huge difference.
That's my experience with them anyway. Eventually got it all sorted out but at the cost of not being able to get at my money for about a month.
Just having friendly helpful customer support who can explain what's going on would make a huge difference.
This kind of story about PayPal is extremely common.
This is ridiculous. PayPal is not some evil "big brother" - they are a company whose entire business model relies on stopping fraudulent activity, and as such, things like this often occur. Pick your poison - either have this happen on occasion, or have your money frequently stolen and more likely, be made essentially impossible to transfer safely on the web.
I will take the occasional inconvenience in exchange for a payment method that makes my life much, much easier.
I will take the occasional inconvenience in exchange for a payment method that makes my life much, much easier.
I don't doubt that you'd accept the occasional inconvenience to other people. Try having your own money taken away from you and report back to us about the "inconvenience."
You say it is only occasional inconvenience that Paypal freezes/keeps their clients money?
PayPal seems to have the same issue with fraudsters. They spend the majority of their time dealing with fraud and looking for fraud (the good transactions are automated and therefore abstracted away from human eyes for the most part) that everything that comes across their desk looks like fraud and is treated as guilty until proven innocent (hey, just like the IRS!). The assumption probably is that 'the system' detects fraud and 'the system' is practically infallible, so when it flags something as fraud they need mountains of evidence to prove that 'the system' is wrong (because 'the system' is perfect, didn't you know?).