Online e-Commerce Issues w/ PayPal?

A concerned entrepreneur submitted this question for your consideration: "I run a very small online company and the main method we obtain payments for products is via PayPal. In this digital age having an easy way to accept payments for goods is critical to small business survival. Have you had problems with PayPal freezing your accounts, have you had any issues with PayPal harming any of your credit? Neither has happened to me but it it still is a concern. Recently, I was sent this site, became concerned and wanted to ask Slashdot readers for their input on security and any problems they may have had with this service." If you send your money to a website for safekeeping, you expect it to be safe, and a large part of this perception is based on dependable customer support. According the warning site, it sounds like PayPal might be a bit deficient on this end. Have any of you experienced similar problems?

"I don't necessarily trust the website I linked to, nor PayPal's statements. PayPal requires you to register your credit card AND your checking account and could conceivably and legally(?) remove any and all funds and stop you from withdrawing a dime from your PayPal account as well as your own checking account at their whim. What is a small business to do?"

Just an aside, if you are signing up for a personal account, you only need your credit card. It's merchants who want to use PayPal's premium features who have to specify banking information as well.

Comments

PayPal vs. real payment processing

[Adam Wiggins]

PayPal is great for person-to-person transactions, as well as small organizations requesting donations. But for a business of any size, it just doesn't cut it. You need real payment processing, and here's why:

• Ease of use. Forcing people to sign up for a paypal account before they purchase from you is a sure way to loose sales.
• Professionalism. When someone wants to sell me something via a PayPal payment, I get cold feet. It's not professional, and it makes me wonder about the trustworthiness of the business, especially if it's an item that costs more than $20 or so.
• PayPal is vastly more expensive. Last time I checked, they skim something like 5% off your credit card transactions. A good e-commerce merchant account from a real bank should only charge you on the order of 2.5%.
• Integration. I suppose this goes with the first point, but as a web designer it's an important one for me...I want to build payment handling into my PHP-generated web page, not send the user to an external site.

The only downside to "real" processing is the barrier of entry. You've got to fill out a bit more paperwork, talk to at least one real human (the banker), and there are some startup fees associated with it. But once you are up and running it quickly will become more economical than paypal, because of the difference in transactions rate (5% vs. 2.5% as mentioned above), not to mention you won't loose sales to people that don't want to sign up with PayPal.

And just as you thought I was posting to get karma...no, you guessed it, it's Shameless Plug(tm) time!

The only Open Source payment processor in the business: TrustCommerce

Mention Slashdot when you sign up for a test account and you'll get a free...um, well nothing, but at least we'll know you're cool. :)

Re:The Lack of Physical Stuff

[WasterDave]

Yes, thank you, it stopped me from having to say it.

I trust a bank because it's FDIC insured.

In short, don't trust banks, trust their precautions.

Dave

Re:Not as a seller, but as a client...

[twiggy]

Getting stiffed is your own damn fault... PayPal is not an escrow service, and they're not responsible for people's honesty...

While I'd like it if they'd investigate claims far enough to at least close out someone's account if they're dishonest, they clearly state in their terms of service that they don't do that sort of thing.

Consider paypal like handing someone cash. Granted, because it makes it easier to hand them cash, it makes it easier to get screwed - but that's your own fault.. you shouldn't buy from a seller you don't trust.. Just like you shouldn't hand a shady character on the street 20 bucks to go buy you a case of beer and expect him to come back with it.

Re:Suckered Once Again!

[FFFish]

The website owner is being paid to scare people away from PayPal.