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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.
Open a bank and credit card account just for paypal transactions and keep your operating capital in your main business account.
// TODO: fix sig
If you ever "go bad" and decide to start screwing people, Paypal is your weapon of choice. If you are a scrupulous merchant, Paypal is probably the best way to go because there will be few complaints on either side of the transaction. As I am also an ebay power seller who uses Paypal, things have been just fine on that side of the table as well.
Just my 2c.
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Or maybe it's because internet service companies have tendency to go tits up without much warning. Regardless of how much physical "stuff" they've got lying around.
Whatever man, I spelled it write!
I know lots of people who have never had a problem with PayPal, everything runs smoothly. The people I've talked to that have had a problem all have had a complete nightmare with it. Every one of them.
Now it is possible, prehaps likely that people that have a problem that is resolved quickly are less likely to complain about it. This could be why I've never heard good things about their customer service but I don't think it's the case. Banks have sets of rules and years of experience dealing with problem transactions. They aren't perfect (I have stories, that would make you ill) but because PayPal is a pretty new concept I think they still have a lot of kinks to work out.
Having your customers pay with credit cards... that way if anything happens they can dispute the charges.
Most customers aren't very savvy. If you tell people "Don't use a check when you do business with me, use a credit card, because I use PayPal, and they might rip you off", they are going to hear "Don't... do business with me... because I... might rip you off."
They don't wanna hear from "this other company is at fault", they're gonna wanna give you money and have you give them goods and/or services, period.
One of the serious flaws in the Paypal setup is that once Paypal believes that a visitor is you (i.e. logged in) that credentialed visitor has complete access to any accounts that Paypal knows about.
About a month ago, I logged into my email to find email "receipts" for nearly $12K in payments, all of which were made while I was sleeping during the night before. Someone had gotten into my account and transferred to several other people various sums of money ranging from $75 to $5000 per transaction. Most of them were against my credit card, but several were against my personal checking account (used mostly for hobby spending so it didn't have much in it) including the $5000 one. I called my bank to protect the checking account and they were very helpful. The credit card company's fraud detection department called me before I even had a chance to call them. Paypal's fraud detection??? Nothing. When I called them (and getting that phone number is no easy task), that sudden burst of activity hadn't even made anyone curious.
My paypal account was put in restricted status and I detailed exactly which transactions were fraudulent. I moved the remaining checking funds out of the path of paypal and had the credit card number cancelled. You'd think that this would stop anything from going forward and efforts could be concentrated on reversing the transactions. Nope. The middle of the next week brought me a series of automated messages from Paypal indicating that my transactions to withdraw all that money from my checking account failed, but not to worry, they'd try again in 3 days. I called paypal and was told that those attempts were automatic and *nothing* could be done to stop them from completing their course.
My bank has been great, letting those transactions bounce and not charging me a dime for stopped payments or overdrafts related to this. The credit card company is treating it like any other fraud, and while it may take a bit to work out, they're working with my refusal to pay for these transactions. As for Paypal? Their handling of this was totally unprofessional for anyone handling money.
The icing on the cake was the emails I started getting once Paypal took the money back from the recipients. I was being accused of cheating them and being asked to resubmit the payments I owed. When I asked to what address they sent the merchandise (hoping to get the mailing address of the perpetrator), it was implied that it was for something related to warez in an IRC channel. At least one of the recipients still thinks I am just out to cheat him out of his money. So, whoever set this up screwed both sides over.
The Glass is Too Big: My Take on Things
I'm not sure how much it costs for online stuff, but for bricks and mortar stores, you can lease the equipment cheap, and the fees per transaction are not much. You are much better protected in this case.
So double check your needs. Maybe you can rationalize accepting credit cards directly.
Jesus was all right but his disciples were thick and ordinary. -John Lennon
Did you take your complaint to your credit card company??
I only have a standard service account with Paypal. I do any work with them by moving money into and out of a checking account at my bank set up just for Paypal transactions. Paypal (to the best of my knowledge) doesn't hold any of my money, my bank does that.
This is, in fact, the only reason I use Paypal at all - I was in no way interested in putting my money in their system, because I'm not a die-hard auction / online shopping user, and didn't want money tied up where it wasn't quickly accessable.
Come to the University of Mars! Classes starting soon!
From reading these posts and linked websites, I think I have some advice. I understand PayPal could be a great way to accept payment over the Internet, but there are some things companies need to do if the absolutely rely on PayPal for commerce.
First, have your PayPal checking account seperate from your company's checking account. This will be good for several reasons. If they dispute your account, and freeze your funds, your main checking account will be fine. Next, if you transfer all funds from you PayPal account to it's associated checking account (nightly, hourly whenever), and then from that checking account to your checking main account, the money will be safe. And since most banks nowadays let you manage your account online, this becomes very simple.
Second. If you are relying on PayPal, have more than 1 account. This is called redundancy. I'm sure most of you have heard it. If your main paypal account goes down, fall back to your secondary. And if you have 3 or 4 accounts, this only makes you more protected. Having these multiple accounts, you will need a quick and easy way to change from one to the next in your ordering procees.
Now, I've never dealt commercially with PayPal, only buying a few ebay items, and making my monthly donations to PennyArcade.com. I don't even know if what I said abaove is "allowed" in PayPal's TOS (or TOU, where U = Use), but if they aren't, and all these problem occur as often as I've read, then PayPal isn't something you should be relying on anyways as a company.
Just My 2x10^(-2) Dollars
Th
If you work the numbers, you will see that this is a manifestly false conclusion based on the example given.
:-)
PayPal's merchant fees are 2.2% plus 30 cents, or 0.7% plus 30 cents for those with "Preferred" accounts.
On the $50 example transaction, that is $1.40, or $0.65 (65 cents) for Preferred. Compare that with the interest earned on a money market deposit or similar investment for two weeks - 5% annual yield equates to 0.192% over two weeks, which brings in 9.6 cents. Even if you assume a more risky mutual fund investment yielding 10% annually, it is still only 19.2 cents, and there will be a risk to account for which is not present in the upfront fee collection. Not to mention that not a whole lot of mutual fund or other investments are yielding double digit returns (many of them are well into negative territory for some time now).
You can multiply 9.6 or 19.2 cents by thousands if you want, but I'd much prefer to multiply 65 cents or $1.40 by thousands
I think your response was right on for the most part. The only part I have some doubt about is "If [PayPal] are acting like a bank and being perceived as a bank, it's long past time for them to BE a bank".
I'm not sure what "acting like a bank" is but I don't think it's fair to force PayPal to operate under US banking rules because some people think PayPal is a bank or treat their PayPal accounts like their bank account. I think it's reasonable to expect that before people get a PayPal account, they read PayPal agreements and learn what their recourse would be in the event of a problem.
I'm not saying PayPal is blameless, I'm saying one should learn to recognize the differences among various kinds of accounts one can have. In a way, PayPal horror stories remind me of the stories people tell about their bank cards with credit card logos on them (like the Visa check card). Some people just don't understand that those cards take money directly out of your checking or savings account but they're accepted anywhere a Visa credit card is. Bank cards offer none of the protection a credit card does. So don't get one. Get a credit card and enjoy the protection of credit law.
I don't see how the root poster had a "problem" with PayPal. He had a problem with a bad seller that used PayPal to screw him over.
If he had just sent a money order, would it have been Western Union's fault the transaction went bad?
The real "problem" here is that you are sending money to someone you don't know, and some people want to delude themselves into thinking PayPal or eBay is going cover their ass because they've got the big brandname.
It doesn't work that way, and if you can't hack the risk, don't do it.
I'm not saying that PayPal hasn't done some scummy things, just that there's a difference between the legitimate stuff and richardbowers-type "I got screwed and I learned my lesson" complaints.
The easy answer to that is to use a credit card via Paypal, not a bank account. They tried to screw me once like they did you. I paid the guy and never got the goods. After 2 weeks of no contact, I called them and asked to have the transfer nixed. They gave me the run around and kept transferring me to different people. I seriously think that they do what a cartoon I once saw did. In that cartoon was a helpdesk. One person had an irate customer on the phone demanding the supervisor of the tech they were talking to. The tech put them on hold and looked around at his colleagues in the cubical farm and asked who wanted to play super. Someone said I'll play super for you if you play super for my guy on line 6. I swear they did that to me. I know I got a couple of those people twice and they played super a couple of times too. After a couple of weeks of getting jacked with by them, I threatened to call my credit card company, contest the Paypal charge, and let my card carrier sort it out. The person playing super that time bucked up and sent me to a person whom I think really was a super, or the designated person to call when that happened. He told me in a really pissed voice that if I did that, they'd "turn the matter over to our legal department and sue my ass off". Yes, I can quote those exact words. I told him to [censored] and hung up. My next call was to my Visa card carrier. I told them what was going on and that I wanted to contest the charge in the amount of $abc.de. They happily responded. They contested the charge and credited my account. They said they would get back with me if they needed more information. A few months later I received an official letter from my card company saying that they had investigated, received little cooperation from the and that they were siding with me and the credit to my account. It worked like a charm. I absolutely do not use bank account transfers from them. I use my Visa Check Card that withdraws straight from my checking account. It affords me all the protection from Visa like contesting charges and fraud protection. However I should use a card with a limit so that if it's stolen, my real $$ funds aren't possibly in limbo while I wait on a credit. I hope this helps someoen.
I was on vacation in Thailand.
I got an email from Paypal.com saying I had $200 that someone sent me. I logged in via the link they provided and tried to xfer to my checking.
Frozen.
It took along time to find out that it's because I was in Thailand. I got the money after a 60 day freeze and closed the account since they were terrible to deal with.
I could go on and on about emails and phone calls, but suffice it to say they suck
YES, there is a McDonald's in Hanoi Square.