
Why We No Longer Accept PayPal - apedley
http://www.binkd.com/general/why-we-no-longer-accept-paypal/
======
equalarrow
I was contracting for the first half of this year and my employer preferred
Freshbooks and Paypal. I was like, ok, I've had my paypal acct for years
hooked up to my checking account, so I figured 'fine'. Luckily through the
whole engagement I was able to get paid and money transferred without any
issues.

Then when it was done, I decided to treat the family to a nice vacation (which
had nothing to do with paypal). On this vacation, I read a book that made me
sentimental for some tech I group up with as a kid, so I went on ebay and
ordered a bunch of things. Transactions ranged from a few dollars up to $200;
nothing gigantic.

After I got home (and vaca was sadly over), paypal sent me an email asking me
to confirm my business buyer status. Of course, there's no way to easily
contact customer service and replying to email wasn't very helpful. Buried in
their help section was a way to submit a support request, which I did,
explaining that I'm not a business, etc.

I got a response saying that they were closing my account. At first I was
bummed, but then I was thinkin, screw it. Paypal's never been customer
friendly and if this how they were gonna be, then I have no problems walking
away from them. So, good riddance I guess.

~~~
relix
But you were being paid through Paypal as a freelancer. I'm guessing that
makes you a business for Paypal.

~~~
jamesbritt
How would Paypal know why someone is getting money?

~~~
TylerE
Regular consistent amounts at set intervals is a bit of a giveaway.

------
Karunamon
A dead throwaway account posted this:

 _Paypal have had their share of bad customer experiences. However it is clear
in the Paypal policies that trusts are not allowed to own accounts. If someone
was ignorant to not notice that, I believe it is unfair to point fingers at
Paypal._

I have to agree. I can forgive a random individual for not reading a ToS, but
as a business? That's unforgivable. PayPal might be skeevy, but you can't
fault them when they follow their own written and publicly available rules.

~~~
maratd
> you can't fault them when they follow their own written and publicly
> available rules.

This makes sense only in the context of _choice_.

If your business revolves around selling on eBay, PayPal is the _only_ viable
choice.

If PayPal wrote that they own your firstborn in their TOS, and every
professional seller on eBay was made aware of this fact, their market share
_would not change_.

Anyone who has used PayPal for any sort of volume (thousands per day), hates
PayPal with a passion that cannot be described. And they continue to use it.
Because they have no choice.

So, yeah, it's perfectly fair to point fingers at PayPal when they _continue_
to make these asinine changes. Because when it comes down to it, for the
majority of their customers, it's either use them or go out of business.

~~~
Karunamon
>If your business revolves around selling on eBay, PayPal is the only viable
choice.

Then either your business model needs to change, or you need to follow the
rules (i.e. no trusts owning an account) that you agreed to when you signed
up. Those are the two options.

Whether or not paypal sucks has no bearing on the fact that the author was in
violation of the terms of service he agreed to and had his account terminated
for it.

Could they have handled it better? Sure. Are they under any obligation to?
Nope.

Again, if this were a random individual person I would sympathize completely,
but you do not, as a business, enter any contract without full appreciation
for the terms you're binding yourself and your organization to. Just because
he was ignorant of those terms doesn't mean they don't exist.

~~~
maratd
> or you need to follow the rules (i.e. no trusts owning an account) that you
> agreed to when you signed up.

No. Not when you signed up.

It's anytime they decide to change the contract. They modify the contract
whenever they want to, without any regard for continuity or business viability
... and if you don't agree, they disable the account. Maybe keep some of your
funds too.

Is it legal? Gray area. Some courts don't enforce contracts of adhesion
strenuously.

Is it ethical? No.

You treat your business partners with _respect_ and don't change the contract
whenever you feel like it, to their detriment, simply because you can.

It's abusive.

------
highace
You were fortunate that Paypal were 'kind' enough to let you have the money in
your account before closing it, I wouldn't have expected that! I guess that
says something about their reputation.

~~~
apedley
Yes we were. I was actually surprised they did this from all the stories I had
heard.

------
Legion
Paypal security seems to be a perpetual case of the cure being worse than the
disease.

They're chasing away the real business along with the fraud.

~~~
rm999
I've been banned from Paypal, I assume because my account has been hacked
twice (they never gave a concrete reason) among 100s of legitimate
transactions over many years. What is frustrating is "this limitation cannot
be appealed" - it seems to me that the true scammers wouldn't even try
appealing, so I think they are firing me rather than accusing me of acting
maliciously.

Fair enough - they are a business who wants to maximize profit, and I was
being a 'bad' customer. But I think this is short-sighted; they are a social
payment network and every lost customer is millions of potential payment links
destroyed. I've already made a few people use competing services to send me
money. Paypal has consistently thrown out the opportunity to be a de facto
online payment standard in exchange for a higher margin.

~~~
apedley
I have experienced support issues with PayPal as well. I once had a customer
on a subscription that froze. It was a bug in their system and all I got from
PayPal was "how are we sure they signed up for this subscription".

In the end they didn't help, I cancelled the subscription and had to ask the
customer to signup again.

------
protomyth
So, I guess we will see a lot of these articles if trusts are that common and
using PayPal. What advantages do trusts have in Australia?

~~~
apedley
They are common for small businesses ($50K+ revenue per year into the
millions) not so much micro businesses.

Trusts offer additional asset protection and tax benefits for business owners.
Most accountants recommend this structure when setting up a business for you.

There are more articles out there with PayPal and trusts however since Micro
businesses are most likely the heavy users of PayPal, they are generally setup
as a sole trader or Pty ltd hence comply with PayPal's terms.

------
URSpider94
Looks like this is a known issue in Australia.

<http://forums.whirlpool.net.au/archive/1323826>

It's also mentioned on Paypal.au's business page.

~~~
apedley
yes it is. I did look into it further once I received the email. My own fault
for not reading the ToS throughly but I am not the only one who has been
through it.

------
flyinglizard
Just remember than some of the issues merchants are facing stem from PayPal's
customer protection policies (I say some, not all, because I'm sure a large
part of it is human error or silly policies as happens in large
organizations).

The fact PayPal has merchants on a short leash should help the confidence of
its users, and with all the security breaches and database leaks going on,
it's good to know my CC number is not out there in multiple merchant
databases.

------
jameswyse
I've had to go with paypal for a recent project, I've not run in to any
problems like this yet but their automated payments system and API are
horrible to work with, especially with it being a nodejs project.

It just sucks that there's no real alternative in Australia yet, though
pin.net.au is showing promise, hopefully they'll go live soon!

~~~
apedley
I would just recommend getting a payment gateway and merchant account. I am
with eWay which only costs $350 per year + 50 cents per transaction. My
merchant account costs a bit less per year plus a percentage of the
transaction which is less than 50% of PayPal's transaction charge.

It takes longer to setup and I wouldn't really recommend them for micro
businesses but they are certainly great for small businesses.

------
georgemcbay
I tried to use Paypal for the first time in a year about a month ago. Tried to
_add_ funds from a bank account I had confirmed through their process years
ago and which has been linked to the account for ages. This transaction caused
them to suspend much of my account until I could provide them with photocopies
of all three of my license, social security card and a utility bill with my
current address.

According to their instructions none of these documents could be older than 6
months. Somehow they expect me to have a driver's license and social security
card neither of which is older than 6 months. I'm sure I could have called
them and cleared up the matter after wasting an hour or more dealing with
their support, but instead I just said fuck it and decided not to use Paypal
anymore.

Fuck you, Paypal.

~~~
apedley
It's the easiest thing to do.

------
jamesjguthrie
I'm not going to go anywhere near PayPal when I finally launch due to the risk
of payment freezes etc.

------
genki
I feel like this is a poorly written article. It doesn't present any sort of
position, and the initial anecdote about the customer service issues and the
author's indecision regarding support for Paypal have nothing to do with the
subsequent issue, which (as has been stated) was simply a matter of not
understanding Paypal's terms of service in the first place.

I guess I'm not sure what the point is. This doesn't seem to have anything to
do with Paypal's poor customer service, nor does it seem to condemn Paypal's
policy of not allowing trusts. It just seems to be another "me-too" article
about no longer supporting Paypal as a method of payment, and it wasn't even a
conscious choice by the business to discontinue that support.

~~~
rquantz
It was a blog post explaining to customers why they could no longer pay with
PayPal. I don't think it needed to be a polemic.

~~~
apedley
Thanks rquantz. It wasn't meant to be a hate piece on PayPal or anything else
other than just my thoughts on what had happened and events surrounding it. As
I updated in my article it was there to let my customers know what had
happened and that it isn't such a big deal for businesses to move on from
PayPal.

------
jredwards
shouldn't that be 'Why PayPal No Longer Accepts Us'?

~~~
apedley
Technically, yes :)

------
marek12886
There seem to have been many of these horror stories over the past couple of
years. And especially if you're a small business, not having access to your
funds is just completely unacceptable.

~~~
apedley
Thats the part that makes PayPal unbearable. As mentioned above I have had
questions asked from my merchant provider over transactions but at no point
did they freeze my account. They called me, sorted out the issue and my
business kept running as usual.

~~~
sounders
Who is your merchant provider?

I'm curious because I've heard similar rants about many products that process
payments for merchants- Paypal, Amazon Payments, Google Checkout, etc.. I'm
interested how your provider is able to circumvent all this red-tape that
larger companies seem to have.

~~~
apedley
My merchant provider is with my local bank. If you deal with a bank it
suprisingly much nicer than dealing with merchants such as Amazon, Google or
PayPal

------
js951534
The faster PayPal dies the better, those guys are real scumbags, imagine if a
bank could just freeze your account like these people do, worse than that they
are not even regulated like a bank!

Would you trust your money to a private company that acts like a bank but is
not regulated like one?

~~~
dangrossman
Banks and PayPal are regulated to the same degree. Banks do freeze merchant
accounts exactly the same way PayPal freezes accounts, for exactly the same
reasons, for exactly the same periods of time. They have exactly the same
policies because these policies come down from the Visa and MasterCard
Operating Regulations that both banks and PayPal are bound to.

PayPal is licensed in all 50 states and is a registered bank in more than a
handful of countries. Whatever difference you think there would be if they
were also a bank in the US, instead of just having their accounts underwritten
by two banks (JP Morgan Chase and Wells Fargo NA), I don't think that
difference exists.

@dkl: I'd like to reply to your comment but it's [dead] and there's no contact
info in your bio. The answer should be fairly obvious if you think about it,
and has been discussed on HN in virtually every previous thread about PayPal.
I've had my own merchant account underwritten by the largest private bank in
the United States frozen in the past.

~~~
mcherm
I disagree. PayPal is NOT regulated as a bank in the United States. Here is an
article from 2002 when they received the official word that they would not be
regulated as a bank:

    
    
       http://www.ecommercebytes.com/cab/abn/y02/m03/i13/s03
    

They _are_ regulated as a money transferral service. I work for a bank and I
can assure you that the level of scrutiny by banking regulators is _far_
greater. As a single for-instance, the auditors have asked to see
documentation of our software development methodology (presumably to ensure
there were procedures in place to ensure applications were built securely and
without an opportunity for an attacker to check in some kind of back-door).

~~~
jacalata
Technically you can't assure us that banks face greater scrutiny unless you
can also describe reliably the level of scrutiny that paypal falls under - or
is it common knowledge that paypal doesn't get this kind of audit? I'd be
interested in reading a good description of paypal security auditing, if
there's anything available.

~~~
mcherm
It is commonly spoken of in the banking industry (where I work). I do not
recall speaking with anyone who had firsthand knowledge of audits at PayPal
(I've never discussed this with someone who worked there), but I _do_ know
that the level of scrutiny of a money transfer service is much less than that
for a bank.

