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The PayPal Phenomenon
An Anonymous Coward writes: "Pretty interesting and thorough history of PayPal." Not really the usual fare on Slashdot, but this is a very readable account of one of the few dot-com successes. I find PayPal pretty annoying today - a lot of the anti-fraud, privacy-invasive measures which this article applauds make Paypal much less enticing to me than it used to be. And they've been accused of squatting on people's funds at the slightest excuse. But maybe that's the way to success: start off with a very appealing product, then slowly tighten the screws.
Here's a nice outline of why PayPal's implementation is NOT very conducive to regular transactions.
http://www.gamers-union.com/paypal.html
Also interesting to note, a few days after this page went up, PayPal yanked service on the W3 storefront they'd been providing for this individual.
And now he will no longer accept PayPal transactions.
Unfortunate, but very necessary to protect himself and his customers.
Chas - The one, the only.
THANK GOD!!!
paypalsucks.com has quite a few horror stories dealing with paypal. Stories of paypal freezing people's accounts, well... after just checking it, it seems like they have taken a good number of them down from pressure from PayPal's lawyers. In any event never have more money in paypal then you could afford to loss. Paypal is not a FDIC member, thus if the company goes under, decides to freeze your account, are any other number of wrong actions, you could simply be screwed. Always send money to the seller via the US postal service, if the deal goes bad you can file a mail fraud complaint against them with the usps, with paypal.. well... good luck.
Kenny
Did it not occurr to you to call your credit card company and simply say 'Observe this transaction. Two of the same value. The second one is fraudulent (which it is)'. They would have reversed it immediately and left the onus on Paypal to prove they needed to charge you.
How bad are the fees? Credit Cards are scary expensive to accept. First you pay the discount fee, anywhere from 2.5% to like 3.75% or worse if the address verification fails. Plus you have to pay the processor (the place that processes the transaction. Either via a monthy fee ($25 to $100/month), transaction charge (like 25 cents or so) or both. Then you have to pay the bank that maintains your merchant account - they charge you $10 just to send you a statement each month. Then they charge you the minimum discount fee - usually $20 or so which means if you only have a couple transactions that month and the discount charges are So is paypal this bad? Credit cards are nice - no doubt. Easy to challeneg, etc. But you also have to realize they are clamping down on online merchants HARD. They now have VERY detailed security policies in terms of where CC info can be stored, how its encrypted, etc. This is a good thing, but it adds to the cost.
So don't assume it'll be a cake walk with credit cards.
Top Most Bizarre/Disturbing Error Messages
Actually, there are a few APIs that PayPal will give ya if you just ask. Things such as a way for PP to send an SSL Enabled Verification back to a CGI on your website so that you can be sure the user did do exactly what they said they did.
I had actually started building a commerce site around PayPal before I discovered RedHat's (Akopia's) Interchange and decided to do things right (ie., real CC processor). The problem with a 'real' CC processor is that the user now has to trust you and your employees with the security of their cards. This means, did ya close all the holes, have ya shut down SQL Access to the outside world (you'd be supprised how many MySQL machines I have been able to access since switching to this software and playing around with it), if ya DO use things like card storage, ya then need to (if you are a responsible sort) encrypt the data, and not just with a ROT13.
Its a LOT of work for someone designing a site on their own. You'd be supprised how many people have their sites email them the #s in plain text. Too many 'geeks' think that just because they can write a PHP site, they understand programming and security (geeks in quotes as I wouldn't consider most PHP 'programmers' real geeks...even though I'm starting to use it myself).
PayPal does most of this for you, and if you aren't willing to put the time to learn everything ya need and verify that it does what it is supposed to do, then PayPal is PERFECT for these folks even if it didn't have the 'secret' APIs to do the verification -- which the users will not see because they are sent by the PP server to your computer, NOT from their server to the users computer to your own computer...which I think it does that as well...but only for simplicity...think about it as secure as a Javascript CC Mod13 Verification system (was it Mod13? I haven't written one of these in years).
I personally have had nothing but good experiences with Paypal, but I was shocked to learn that there was a dark side to it that many, many people have been burned by. It seems the fact that I've had no problems with Paypal is the exception rather than the rule -- many people haven't been so fortunate.
Some of the problems can just be attributed to "shit happens," but in many cases, Paypal is guilty of out-and-out theft: when they receive a complaint about a single transaction, they often freeze the accounts of everyone involved, and then do everything possible to make themselves inaccessible by phone or e-mail so that the accounts can never be unfrozen. They've just walked away with someone's money. Good job.
Anyway, here are some useful links that have many, many testimonials of bad experiences:
Paypal Warning
Testimonials from above site.
PaypalSucks.com
Based on the testimonials I've read, here are a few ways I can think of to make the Paypal experience as safe as possible.
1. NEVER leave money sitting in your Paypal account. Withdraw it IMMEDIATELY. They will freeze it, or steal it, if they get an excuse to do so -- any excuse will do. Don't be tempted by their "Paypal Money Market Fund". That 1.2% APR isn't going to make you rich. You'd be better transfering your money to your bank where it can't be stolen. They can't steal what isn't there.
2. Try to avoid setting up a bank account on Paypal or giving them your checking account number for any reason. They do everything in their power to convince/force you to set up a bank account, which should give you cause for suspicion. If you give them your checking account number, they can (and will) withdraw the money from your bank account at any time without permissions.
3. If you must set up a bank account with Paypal, contact your bank and tell them NOT to allow Electronic Funds Transfers from Paypal without your approval. Unlike with a credit card, there's no way to dispute EFT charges. Get this in writing from your bank.
4. Check your credit card statement carefully each month, and chargeback any mysterious charges immediately -- but not if you have money sitting in your Paypal account or they have your bank account number, because they will take your money away from you if you do a chargeback. Get your money safe first, then call the credit card company to do a chargeback.
5. Try to avoid using a debit card -- you have no fraud protection, and if the debit card draws from the same account as the bank account you have set up in Paypal, you might run into some problems because of the way Paypal does things. If you have $600 in your bank account, and you try to make a $500 Paypal payment from your bank account, it'll bounce! Why? Since bank transfers take 3 days, Paypal wants to avoid finding out 3 days later that there's no money in the account, so they use your credit/debit card to "secure" the transaction by "locking" $500 on the card and then releasing it after the bank transfer clears. So now, when you've tried to pay $500 from your bank account, Paypal has locked $500 of the $600 in the account, leaving only $100 in the account which will make the $500 bank transfer bounce. The bank will charge you a bounced transfer fee, Paypal will charge you a fee, and you'll be unhappy with the whole situation. Sometimes even when the transaction DOES complete, they still don't release the "hold" on the card for days, weeks, months, or ever.
6. Do not use Paypal for large transactions. Use some sort of escrow service. With the incredible fees Paypal is charging now, it wouldn't be much more expensive.
7. As an alternative to Paypal, consider using E-Gold instead. Instead of dealing in a national currency like Dollars or Pounds, it uses actual physical gold as currency: you actually own a stake in the vault of gold that the company owns, and you can send/receive electronic gold from others as payment. It's very expensive to get involved, though: getting money into an E-Gold account requires you to go through a currency exchange service (E-Gold does not offer this service directly) which generally charge a 15% conversion fee, and 1% of your balance is deducted per year.
The cool thing about E-Gold, though, is that if you buy 5 ounces of gold, you'll always have that 5 ounces of gold in your account no matter what happens to the value of gold or to your national currency. If you spend (for example) $200 on 2 ounces of gold, but six months later the price of gold has risen from $100/ounce to $300/ounce, you'll still have that 2 ounces of gold -- but it'll now be worth $600. Pretty nice, eh? A lot nicer than Paypal's 1.2% APR mutal fund.
Anyway, use Paypal if you have to, but be safe. Minimize the opportunities for them to steal your money. Don't use them as a bank. They're not a bank; they're not regulated as a bank, but they want you to use them as a bank so that they'll have more chances to take your money.
Play it safe, and you should be okay.
It's nice to hear you had a good experience with PayPal. I've only rarely used it, but I was recently pointed to Paypal Warning.
The page lists all sorts of articles with negative comments about Paypal. Apparently it has gotten a 3 out of 7 on Reseller Ratings (where everything is scored by customers). They also have a Paypal Wall of Shame with "unedited horror stories".
The thing that grabbed my attention the most, however, was the following on the front page:
WARNING:
Your Paypal account can be frozen at any time, without advance notice leaving you without your money for weeks (if not forever), and there isn't much you can do about it.
Any thoughts, folks?
XML is like violence. If it doesn't solve the problem, use more.
That's because it costs Paypal 2-4% of a transaction every time someone uses a credit card. Now if you are willing to pay that amount for them, I'm quite certain Paypal would be willing to do credit cards for you.
Now, what happens for someone like me, a Canadian, who isn't allowed to link their bank account for sending money to people?
I can no longer use PayPal, without anyone I'm sending money to, upgrading to a Business account.
Nice way to force everyone to upgrade
on the phone to paypal? that phone number is a closely guarded secret and noone at paypay will give it out.
you cant call them or email a live person. you only get their automated responses..
Sorry, but any bank that ignores all it's customers is a scam, and Paypal is a scam, plain and simple... If they want to prove to me they aren't then have a live human respond to my email instead of the canned computer responses.
I reccomend to everyone I know to avoid paypal like the pleague and expect to get money stolen from them by paypal with no way of ever getting it back.
Paypal can fix that, Hire people to answer email and publish a phone number.hn
Do not look at laser with remaining good eye.
The site www.paypal.com is running Stronghold/2.4.2 Apache/1.3.6/L C2NetEU/2412 (Unix) on Linux
no, the webservers are running the abovementioned OS/servers. What the back end is could only really be stated by someone familiar with PayPal's back end structure. For all we know the back end DBs could be Alphas, AIX.. or even eNpTy.
.. and even the webserver info string could be falsified; it's trivial in the code or config. Don't assume simply by a webserver version response.
-'fester
-'fester
You can call them. I checked out their IPO data and just dialed their phonenumber to verify it worked. I am sure you could get an operator or just pick someone at random from the directory until someone listened to you.
Paypal Inc
1840 Embarcadero Road
Palo Alto CA 94303 USA
Phone: 650-251-1100 Fax: 650-251-1101