
We got banned from PayPal after 12 years of business - dz0ny
https://blog.niteo.co/paypal-ban-after-12-years/
======
gotland_
Don't know if it is the reason for the ban, but Niteos main product seems to
be a service for creating spam networks.
[https://www.easyblognetworks.com](https://www.easyblognetworks.com),
[https://niteo.co/projects](https://niteo.co/projects)

~~~
dmurko
As I mentioned in the previous comments - we're not using PayPal to process
our SaaS products.

~~~
sirn
> we're not using PayPal to process our SaaS products

Disclosure: I used to work in payment industry.

Unfortunately from the brand's perspective (Visa, Mastercard, etc.) it doesn't
matter which of your product is using their channel to process payments, if
the business is involved in doing something shady, the whole company will be
flagged. If you already passed KYC 12 years ago, but your business _today_
won't pass KYC if you were to apply again, then it's a matter of time until
you get kicked out.

------
jake_morrison
PayPal blocked us after 10 years due to a a Kafkaesque problem, where they
decided that our Hong Kong company was both a Chinese company and not a
Chinese company: [https://www.cogini.com/blog/paypal-know-your-customer-
failur...](https://www.cogini.com/blog/paypal-know-your-customer-failure/)

~~~
jzwinck
Hong Kong is part of China and also not part of China. So it makes perfect
sense that a Hong Kong company is both Chinese and not Chinese.

~~~
Laforet
The city state has its own currency, monetary policy and legal system, enough
for the department of state to treat HK as an independent entity as far as
trade is concerned. Given the vast amount of money and good flowing through
through HK I find it hard to believe any established payment processor would
lack familiarity with the status of Hong Kong. It looks more like a (poorly)
made up excuse to ban undesirable users.

~~~
gpm
If you read the actual blogpost, it was more likely an administrative mistake
earlier in the process that was then difficult to undo, and no one really
giving a fuck on paypal's side.

Attribute things to incompetence before malice and all that, especially when
attributing it to malice requires thinking they made a fairly odd decision to
outright lie to customers about why you are ceasing doing business with them.

~~~
crooked-v
Sufficiently prolonged incompetence, when the resources are available to
easily correct it, _is_ malice.

~~~
gpm
It isn't a

> (poorly) made up excuse to ban undesirable users.

I suppose I'm not interested in debating the definition of malice as it
relates to actions by a large corporation...

------
exabrial
The lack of customer service in the Silicon Valley is a pervasive problem.

* Cody Don on YouTube teaches the masses about science and regularly gets banned. His videos are rated G to PG. Despite millions of viewers and dollars of Revenue, there is nobody he can call.

* Uber charged $1500 to my debut card a few months ago. There's literally nobody you can call about it.

* Lose your Instagram/Twitter/Gmail? Too bad, because it's free, you're treated as cattle.

* Oh then there's the paying customers too: [https://news.ycombinator.com/item?id=17431609](https://news.ycombinator.com/item?id=17431609)

~~~
viraptor
> Uber charged $1500 to my debut card a few months ago. There's literally
> nobody you can call about it.

Your bank. You dispute the charge. Uber can deal with your bank. It doesn't
matter it was a debit card. It means you're missing the money immediately, but
doesn't stop you from disputing.

~~~
sincerely
You get banned from Uber if you do that, no?

~~~
ghaff
That's the second comment in two days I've seen along the lines of "You can't
risk pissing off Uber because they might ban you." What a sad codependent
relationship to be [ADDED: or feel you are] so locked into some uncaring tech
service that you feel you basically have to just put up with whatever
mistreatment they dish out.

~~~
pricechild
What about Amazon?

~~~
ghaff
What about it? I use Amazon and I would be loathe to drop it but I don’t
really feel I have no choice but to use Amazon.

------
HenryBemis
Literally NO ONE wrote the below:

Every Friday go online and withdraw all-but-the-necessary £€$$ to your bank
account (transfer wire or via card number). I do get some revenue via PayPal,
and the very same day (or the next) I 'download' comes it to my bank account
(connected to PayPal via card) and IMMEDIATELY is shipped to another account
that has all the controls to make money (relatively) unmovable.

I perceive PayPal as my wallet. I do keep 'some' money in it but I keep the
motherload away 'layers' deep.

My money flow diagram, in the back end, includes "tax", "expenses", and
"vault" (alarm Scrooge McDuck) accounts.

I see PayPal as the envelope that I am given the cash in. It doesn't stay
there for more than 24-48h.

Edit: someone below mentioned they do spam.. if e.g. USA authorities has
alerted them about doing shady things, PayPal would also receive a gag order
with it to a) freeze their $$$$ and b) gag them. If I was Niteo I would get my
pencils sharpened and wake up my lawyers.

~~~
foggyToads
How does that protect against them erroneously withdrawing large sums from
your account and hitting you with overdraft or repeated NSF fees?

~~~
graeme
Isn't the max loss there rather tiny? Especially if you have overdraft off on
the paypal bank account. You can disconnect the account if something happens
and there are fees accruing.

Edit: I'm replying to a really low odds scenario, where:

1\. You auto sweep all money out of paypal

2\. You regularly empty the checking account it sends to

You have at risk maybe $1000-$2000 in the chequing + less than $100 in fees.

For something vanishingly unlikely to happen. The risk seems rather low
compared to the exposure.

I mostly use stripe and have PayPal as a backup. Never had a problem with
either, and if I did have a problem with one the amounts are fairly low.
(Probably more of an amount risk with stripe as they take longer to sweep out
the money. But I don't think they freeze as often)

~~~
HenryBemis
I was inspired from a couple of videos for my "flows"/management.

This speaks about keeping 7 accounts:
[https://m.youtube.com/watch?v=auzLhKvsxnQ](https://m.youtube.com/watch?v=auzLhKvsxnQ)

There is a Tom Ferry (real estate guy but has some sound tips) also has on a
video a VERY good flow diagram on how to distribute money in different
buckets/accounts. Apologies but I couldn't find it on my phone.

I was "inspired" by the above and once I organized my accounts/flows and
stopped using "single account for all" my life became so much simpler. And of
course PayPal wallet is not a permanent parking space for £€¥$.

------
deaps
My only experience with paypal was about 8 years ago. I briefly remember
signing up for it roughly 2-3 years prior to that. I linked my paypal to my
(older) bank account so I could purchase something. This account had about
$100 in it - it was my old left over account from before I got married and got
a joint account, etc. So I kept a tiny bit of money in it. I had moved about
2-3 times since opening that account - I never used the account for anything,
it just sat there with money in it. It was eventually forgotten about.

Anyway, long story short. Someone managed to access my paypal and request a
sum of money around roughly $40. That account had about $38 in it at the time.
Paypal flagged the transaction as fraudulent, stored the money 'in my paypal
account' instead of sending it to the requester, and froze my account. But
this overdrew my bank account by roughly $2. Needless to say, 2-3 years of
late fees added up to a substantial amount of money - two separate accounts -
one for about $280 that I owed the bank and another that was about $350 that i
owed to their 'overdraft' company. I didn't find out about either until they
were about 2-3 years old and in collections.

I realize what I'm explaining is totally my own fault for not monitoring that
account and keeping it up to date, but if paypal would have either redeposited
that money into my account or sent some emails, instead of freezing the assets
in a holding account, I could have avoided that.

In either event, that left a bitter taste in my mouth, and i severed all ties
with paypal and that old account at that point.

I had to explain this multiple times to different government and military
agencies throughout my career - it still comes up on background
investigations.

~~~
consp
I do not know how it is in your jurisdiction but where I live a collector
needs to inform you in timely manner of these kind of discrepancies if they
want to enforce fines or overcharge fees. The means different kind of channels
of communication than the regular ones (e.g. postal instead of login to the
site, or at least show some effort). Note: this is only if they overcharge
without you being able to do so normally, if are allowed to have a negative
balance you pay regular fees and you signed a contract to do so.

------
peckrob
I used to help run a rather large fan convention. For our first 5 years
(starting in about late 2003 or so), PayPal was the only option we offered for
registering online. At the time, they were really the only option for
implementing online payments easily without the complexity of a full merchant
stack (and it was just me doing the programming, volunteering to help them
while I was still in college). By the time we finally switched away from them,
we were probably clearing $80k or so a year through them, with a very large
percentage of that coming over the course of a week or so just before the
event. People like to wait until the last minute. :)

We never had any issues, but we were very vigilant about transferring funds
out of PayPal every few days just in case. We did finally stop using them,
probably about 2009 or 2010, when stories like OP's started to become
widespread.

For us, having them "hold" our funds for 6 months or cancelling our account
would have bankrupted us. The hotel wants to be paid on Monday after the
event. Vendors need to be paid within 30 days. Things like that would have
been impossible for us to do if they decided to sit on the money or can us. We
were a volunteer fan convention; we didn't have the financial cushion to
withstand something like that.

Not to mention the fees were higher than a standard merchant account. We
finally did switch to a merchant account through Elavon and, after I left, I
think they switched to Stripe. Either way, they don't accept PayPal now
because the financial risk to them that could result from PayPal freezing or
canceling the funds is significant.

~~~
ROFISH
Event tickets are _explicitly_ on PayPal’s terms of service as needing a hold.

~~~
peckrob
That is the case now, yes, but I don't recall that being the case _at the
time_. That said, we are talking sixteen years ago.

Regardless, I would not recommend any business accept PayPal unless you are
large enough to get their attention. There are far too many stories out there
like OP's, of individuals, as well as small and medium sized businesses,
getting absolutely hosed by some automated algorithm at PayPal and having zero
recourse to even find out what happened. Customer "service" is nonexistent
there. In my opinion, the only thing PayPal is good for is sending money
between people.

Short of filing a lawsuit, and you probably can't even do that because they
now have an arbitration agreement in their terms.

------
jpalomaki
For me as a customer, having PayPal as payment option increases the
propability of purchase. Especially with one-time purchases from small
vendors.

Reasons: No risk of credit card info misuse (by vendor), I only need username
and password and I get certainly at least some kind of receipt for accounting.

~~~
Nextgrid
I’m always surprised as to why people are concerned about card details misuse.

You are not responsible for card-not-present fraud (without 3D Secure). You
can dispute any fraudulent charge with your bank, and I’d bet good money the
bank has actually better customer service in that regard compared to PayPal.

~~~
blunte
As a consumer, I like PayPal because it allows me to shut off a payment stream
when I want to.

A prime example was when I subscribed to NYTimes, and a few months later
wanted to cancel. The only way to cancel was to make a phone call, navigate a
phone tree, and wait for an agent. That was absurd, not only because I'm
international and find it less convenient to call a US number... but
particularly because I signed up and created the subscription online. NYT knew
what they were doing by making it difficult for people to cancel.

With PayPal in between, I was able to easily just terminate the agreement. NYT
could no longer suck money out of my card.

~~~
Double_a_92
Technically you could still owe them that money... Just because you don't pay
it doesn't mean that the contract gracefully ends.

~~~
jayalpha
You could argue about this. It is also questionable, where the contract was
made. New York City? The place where the server is based? The place where the
international customer is based? What law should apply? And if a company makes
it unreasonable difficult to cancel a subscription then this may be a
violation of some laws already. [https://www.cnet.com/news/companies-must-let-
customers-cance...](https://www.cnet.com/news/companies-must-let-customers-
cancel-subscriptions-online-california-law-says/)

------
metaprotocol
Niteo produce a product to produce content farms and generate spam.

PayPal has done the world a favour by banning them.

~~~
dmurko
Founder here. We're not processing SaaS through PayPal, as mentioned in the
post:

> The most interesting thing is that we’ve moved away from PayPal in the last
> two years and have only been receiving some minor payments and paying for a
> few online services.

We've stopped using PayPal for our SaaS business a few years ago.

~~~
CameronBanga
"We do this thing that probably got us banned, but we don't do it on PayPal so
what's the problem."

------
nakodari
Not surprised at all. We got banned too without any warning a few years ago. I
wrote about my story here:
[https://news.ycombinator.com/item?id=11944701](https://news.ycombinator.com/item?id=11944701)

Lots of people would simply think "It won't happen to me" and move on. But
this is just another example that if it can happen to people using Paypal for
years, it can happen to you too. It's better to offer other payment channels
to customers so you can diversify. And if possible, move away from Paypal
entirely.

~~~
neotek
You got banned for running a file sharing site, I’m afraid. PayPal’s terms
require all file sharing sites to seek explicit approval before using the
service, no exceptions.

~~~
astura
I mean... its not even hidden in fine print or written in legalese or
anything, they are pretty clear about "Activities Requiring Approval" in
readable plain language.

[https://www.paypal.com/us/webapps/mpp/ua/acceptableuse-
full](https://www.paypal.com/us/webapps/mpp/ua/acceptableuse-full)

>Providing file sharing services or access to newsgroups

~~~
nakodari
When we created an account, there was no such clause. We discovered that it
was added later. When they pointed it out that it violates their policy, I
found it surprising. At the very minimum, they should have allowed us to get
permission and if denied, then at least return us 30% of our revenue at that
time which was in the account. They did neither. They shut down the account
and did not even answer back to our emails. I would never trust Paypal again
after that bad experience.

------
PMan74
You'd hope at this stage, based on various PayPal horror stories, businesses
would not need this warning.

> Do not kid yourself – your business is never, never

> safe with PayPal. Move away or at least have a plan B

> in place so that you don’t lose your business over

> their arbitrary actions.

They all read like riff on The Trial: you've been banned, we're not going to
tell you why, this is going to cost you money.

------
LeonM
Even though I absolutely agree that you shouldn't put all your eggs in one
basket, it is ultimately the market that could drive you towards a dependency
situation.

I have had a couple of customers for which I set up both PP and another PSP
(such as stripe). Then it turned out that about 90% of their transactions came
from PP.

So even if I set up 10 different PSPs for them, if PP bans them, they will
still be out of business.

~~~
viraptor
That doesn't necessarily follow. It shows that users prefer PayPal, but not
that they wouldn't use alternatives if PayPal's not available. If they really
want to know the answer, they could do an A/B test with missing PayPal and see
how many people drop out without it.

Also, was PP the default/first payment option by any chance?

~~~
jdietrich
_> If they really want to know the answer, they could do an A/B test with
missing PayPal and see how many people drop out without it._

I've done these tests, repeatedly; removing the PayPal payments option
consistently leads to a statistically significant increase in cart
abandonment. Some customers _strongly_ prefer PayPal (especially on unfamiliar
sites) and some don't have a credit card.

~~~
LeonM
> and some don't have a credit card

If your customers are from Europe, it's not _some_ , but _most_ customers that
don't have a credit card. Credit cards are uncommon here (probably hard to
imagine if you are from USA).

Online payments are a fragmented mess in Europe. Most countries have their own
preferred online payment method (like iDEAL or bancontact), Paypal is
basically the only reliable method that works everywhere.

~~~
viraptor
> If your customers are from Europe

This is not a great approximation. In the UK you can assume almost every
person has a payment card that works on the internet (debit and/or credit). In
Poland on the other hand, the number of systems gets silly
([https://m.lot.com/us/en/payment-methods-on-
lotcom](https://m.lot.com/us/en/payment-methods-on-lotcom))

~~~
LeonM
I guess that I was trying to say is: don't assume that people have credit
cards. In many countries credit cards are uncommon.

~~~
thedaemon
Credit / Debit cards are the same thing online. We, as is USA people, use the
terms interchangeable often. I'm going to guess that most EU people have some
form of banking card. So we will continue to assume that people have a form of
payment other than cash.

~~~
LeonM
> Credit / Debit cards are the same thing online.

No, they are not. With a credit card you can pay by entering the card number,
expiry date and CVC. With debit card you can't do that. The payment must go
through your bank. It's a completely different payment flow.

~~~
rescbr
> With debit card you can't do that

It depends on the debit card. I have both Visa Electron and Maestro, and they
have 16 digits, CVV number and they behave like a credit card with 3D Secure
when doing online purchases, while taking the money from the account right
away.

There's also multifunction credit and debit cards (Mastercard and Maestro, or
the Visa equivalent). They are branded like credit cards with a tiny Maestro
logo on their backside, so I had to explain and ask the cashier in a grocery
store in Amsterdam to try it as it would magically work as a debit card.

------
shams93
Then if you're an indie musician on Bandcamp they give you no option but to
use PayPal however if you're not on Bandcamp nobody is going to buy your music
directly from your website anymore and for underground acts Bandcamp is better
than Spotify but the whole forced use of PayPal there meant for a decade I
couldn't use Bandcamp until I got a new PayPal account after they killed the
account I had had for 15 years.

~~~
lukeholder
Longest sentence ever, upvoted.

~~~
butterpeanut
Without that second 'had' it would have been too close to call.

~~~
mathieuh
“John, where Jane had had ‘had’, had had ‘had had’; ‘had had’ received the
better mark”.

And now ‘had’ has lost all meaning for me. I forgot which verb it was
conjugated from for a second there

~~~
lemoncucumber
You missed a couple hads at the end:
[https://en.wikipedia.org/wiki/James_while_John_had_had_had_h...](https://en.wikipedia.org/wiki/James_while_John_had_had_had_had_had_had_had_had_had_had_had_a_better_effect_on_the_teacher)

------
mprev
Spam company tries to create a content marketing moment with a dog whistle
headline but buries the lede that they're a spam company.

~~~
Loughla
Question about the phrase 'dog whistle headline'.

I thought a dog whistle in current popular use was a headline or sentence
meant to imply something hidden, usually racist/sexist/other-ist. Like the
phrase 'those people' or something like that.

How is this headline implying anything other than what it says, or is my
interpretation of that phrase wrong?

~~~
wccrawford
A real "dog whistle" is used to get the attention of the dogs and tell them to
do something.

A dog whistle headline would therefore be attempting to round up a bunch of
people to fight their fight for them.

And had they been doing good, wholesome things at their company instead of
creating spam tools, it probably would have worked. Unfortunately for them,
people are starting to learn to dig a little deeper before getting out the
pitchforks.

~~~
pvg
A real dog whistle is heard by dogs but not people so the phrase is about
things addressing a specific subset of the audience in some un-obvious and
underhanded way. This headline doesn't - simply misrepresenting yourself by
omission or trying to enlist a paypal ragemob to your cause is not a 'dog
whistle'.

------
CaptainZapp
As ar as I know PayPal in Europe is a bank with a Luxembourg banking license.

I'm wondering if they could pull the same shitty here. Considering that any
bank, which freezes your account, doesn't provide you with any reason and
actually refuses to talk to you may draw quite some ire from their respecive
regulator.

~~~
NeedMoreTea
Which is exactly what banks do if they decide someone is on the terrorism
blacklist, or you are "risky" \- often on absurdly weak grounds. Mistaken
identity or not, guilty or not, it seems to leave the customers with no
options. Freezing funds only seems to happen with terrorism related closures,
but it does happen, and the bank is judge, jury and executioner.

One instance from search:
[https://www.theguardian.com/money/2018/feb/03/natwest-
closed...](https://www.theguardian.com/money/2018/feb/03/natwest-closed-my-
account-with-no-explanation)

~~~
mcs_
> Freezing funds only seems to happen with terrorism related closures

Try add the word Bet next time in the transfer's detail...

~~~
Double_a_92
Or Cuba

------
sschueller
PayPal will also stop letting you refund the percent they take out so you will
be holding the bag when you refund a customer.

There is absolutely no reason to use PayPal at this point and any place that
only takes paypal should be boycotted.

~~~
victorNicollet
I dislike PayPal as much as the next guy, but I don't get this:

> PayPal will also stop letting you refund the percent they take out so you
> will be holding the bag when you refund a customer.

When I refund a customer, I wouldn't expect the power company to refund the
electricity spent serving that customer, and I wouldn't expect UPS/FedEx to
refund the delivery of that customer's package. Why should PayPal refund the
costs of the customer's transaction ?

~~~
Reason077
It's common practice within the payment industry. When a refund is issued for
a credit card transaction, the interchange fees are (or at least, should be)
refunded to the merchant.

This will be particularly true for a large payment processor like PayPal,
since they will have a lot of negotiating power when it comes to the
transaction/interchange fees they pay.

------
stakhanov
I've had so many bad experiences with PayPal. (One of them was having the
money in a checkout-through-Paypal transaction frozen for no reason. They
insisted that they would keep my money and not pass it on to the vendor if I
didn't set things straight by sending them a FAX; no other mode of
communication accepted).

Even as a consumer I now no longer transact business through PayPal if it is
at all avoidable. If I want to buy something from an online vendor that only
offers PayPal, I will go to great lengths to find another vendor that offers a
payment mechanism other than PayPal.

------
Communitivity
Others have said it, but it bears repeating. If you build on someone else's
platform for free, or cheaply, you are the product not the customer. At best,
you are both product and a minor customer.

Paypal has a history of doing this sort of thing. I've seen articles about it
with Google services as well.

This is one of the many reasons why I suggest using open standards. You could
accept bitcoin or eth for payment, but that is possibly too impractical for
some customer bases. There are alternative payment gateways to Paypal, but
many of them have allegedly done similar things, including Stripe.

Here is an article with advice on selecting a payment gateway for your
startup, from the folks at Chargify.

~~~
falsedan
> _someone else 's platform for free_

Paypal is decidedly not free

------
WA
I integrated PayPal now for 12 years. No problems whatsoever so far. Just as
another anecdotal data point.

~~~
dkersten
Given the amount of horror stories about PayPal, _" it won't happen to me"_
seems like an incredibly risky stance. Of course there are many, many people
using PayPal without issue, but these stories show that it can happen to
_anyone_ at _any time_ for _no reason_ , no matter how long they've been
happily using PP.

~~~
wccrawford
Most of the real horror stories about PayPal are about companies that are
doing something that PayPal wouldn't want to be associated with, such as Spam,
Porn, or filesharing. some of the stuff is already in their ToS, but quite a
few of the stories came from before they had it explicitly in their ToS.

So I'm not surprised that people continue to think "It won't happen to me" if
they don't think they're doing anything "wrong".

~~~
dkersten
"Most" horror stories, sure, but not all. I've heard more than enough where
the cause seems to be that somebody did a chargeback or other things that were
out of control of the company in question. There was one particular case a few
years ago, where a sudden burst in volume seems to have triggered it.

Bottom line is, its a huge risk. I wouldn't want to base my business on such a
significant risk and at least have a fallback in place.

------
dsauss
Only after having a law firm, who we knew through an advisor contact, send
PayPal’s legal department a letter did they release our PayPal balance funds
back to us.

We were banned without explanation after being a customer for 8+ years and had
our PayPal balance (not yet transferred to a bank) frozen.

We left a high balance with PayPal because at the time the interest rate they
provided was high.

No explanation was given at any point and the whole process took about 3
months to get our own funds back that we needed to operate the business.

~~~
isostatic
> We left a high balance with PayPal because at the time the interest rate
> they provided was high.

Why can they afford to pay such a high interest? Because they can ban you
whenever they feel like it.

If an offer's too good to be true etc.

~~~
Asooka
That's an interesting take on the ol' Ponzi scheme. Take in money, then ban
people for violating terms of service. Pay out only the very few who would be
truly a problem.

------
rock_hard
Given that there is pile on of negative comments about Paypal already I
figured it be nice to share that I have never had a single issue with PayPal
in about 15-20 years or so.

Neither on my private account nor business accounts.

Not even with the paypal account for my burning man camp.

Just my 2c

------
WC3w6pXxgGd
Having worked at PayPal in the past (and then Braintree), both companies are a
total mess internally. Basically nobody knows exactly how the system works,
and every new "feature" is just a hack upon the existing system.

In many ways, I'm surprised either company still functions without massive
blackouts all the time. That's quite the testament to the founders' code, I
guess.

------
z3t4
I would guess that a clientele with spammers and black hat SEO's could have
something to do with it. Paypal network graphs probably think they're top of
some scheme.

------
packetpirate
I can't imagine anyone is surprised by this. I've been hearing horror stories
about PayPal since the mid 2000s. They're a garbage company, and the only
reason people don't use something else is because they're a veritable
monopoly.

------
woofie11
I lost trust in Paypal after one of the most credible, respectable
organizations I knew was on the verge of going out-of-business. A lot of
people made donations, myself included. Paypal froze and wouldn't release
those donations.

I would absolutely never, ever, ever run a business which relied on Paypal.

As a shopper, it works okay, though. I got scammed once, and Paypal did
nothing, but the risk isn't very high. It was probably twenty bucks or
something, but if it were more, I could raise it with my credit card company.

------
wetpaws
I stopped using PayPal after they froze 600k on the Minecraft devs account
nearly putting company out of business - you can't imagine the worse
advertisement for your service

------
blunte
This is a known risk with PayPal... so many similar stories.

However, it's also a risk with Google and Facebook. I'm not sure if Apple and
Microsoft are as bad.

One must assume that some automated systems are involved in these terminations
because no reasonable human would slam the door and refuse any attempts of
discussion or reconciliation.

Short of getting some significant press (here on HN where there are staff from
each of these companies), one's chances of getting a termination resolved
reasonably is practically nil.

The problem I see is that these companies have become so large and have
acquired such relative monopoly positions that they can afford to lose/screw
some customers because it's cheaper expense-wise than managing human staff to
resolve these issues. That's not reasonable.

PayPal has much less of a monopoly position than Google, Facebook, and Apple
do (because of the two app stores and the center-of-all-social). We know
better than the use or depend on PayPal, but we have no choice but to depend
on Google (Android) and Apple.

I really was hoping that React Native and other webbish technologies would
kill the mobile "app" system and return the power to the people who actually
create things. So far it doesn't seem to be working that way.

------
pombrand
Got my Paypal account and money frozen for shipping a product that was legal
to sell in the US, but not online in the UK.

After asking around they told me the reason, and after implementing a system
that stopped orders to the UK of said product they unfroze the account.

Yes they could have given me a warning and been more transparent, but overall
not too mad.

------
Fnoord
I knew someone who worked as CS rep in 2014 at PayPal, in Ireland. He told me
that if people make too many claims, they'd just close the account.

In my nearly 20 years of usage of PayPal, I've a 100% success rate on all of
my claims (a few, I suppose about 4 or so). I guess my buy:claim ratio is in
good standing.

------
arielm
We use PayPal as “another” way to pay and withdraw money either weekly or when
it reaches a very low set amount. It’s kind of a hassle, but if this happens
at least we don’t have to worry about money we already earned.

In general, PayPal has been losing a lot of traction over the years, and is
one of the reasons eBay spun them out a while back. Lack of “decent” support
and a week to reply to a critical email just isn’t acceptable in 2019 + the UI
really isn’t that user friendly when you look at Square Cash or Apple Pay in
iMessage.

I won’t be surprised if they don’t exist within the next five years. Sure,
they’re still integrated into a lot of things, but one competition becoming
much bigger can change all of that quickly.

I don’t think they’d be missed...

------
ForHackernews
This is probably 10 years old at this point, but still accurate:
[https://paypalsucks.org/toon1.shtml](https://paypalsucks.org/toon1.shtml)

------
prirun
PayPal suspended my account once when I paid $5 to the NoScript guy. I called,
they wouldn't tell me why they suspended my account because "that would allow
people to get around the rules", and they gave me zero warning in email or
anything. Next time I went to use the account, it was frozen.

I don't remember how/why/when it was unsuspended, or maybe I just opened a new
one.

Not telling people what rules they supposedly broke is unreasonable, even if
it lets bad guys figure out how to get around them.

------
chaz6
I lost complete trust in PayPal after my account was compromised _AFTER_ i set
up two-factor authentication (annoying to this day, they still do not support
U2F. I got them to credit me some of the money back, but after cancelling my
cards, they refuse to close my account unless I add a new funding source so
they can send the money to me. They are too stupid to give me a deadlock
letter I can take to the ombudsman. I am left out of pocket because I have no
way to get my money back.

------
jlg23
> The most interesting thing is that we’ve moved away from PayPal in the last
> two years and have only been receiving some minor payments and paying for a
> few online services.

Albeit it would be really, really nice to do so, there is absolutely no
incentive for a payment provider to have someone look into a case like this
when the salary of that person (for the time spent on the case) exceeds the
revenue made with the customer.

------
teddyh
> _We were lucky that we have moved away from PayPal for actual business
> revenue_

Maybe that’s the real reason for the ban? PayPal might not like people not
being completely reliant on PayPal, so PayPal might tend to ban those who
don’t use PayPal for everything, hoping to make all potential non-PayPal users
go out of business before they become large enough to be visible? Of course,
this is all paranoid speculations.

------
scarface74
What the hell? “You can’t remove your credit card or bank information from
PayPal”. So even after they closed your account they still want access to your
account?

I haven’t thought about PayPal in years, but I had forgotten about this. When
I did use it, I had a separate bank account, immediately transferred from
money from Paypsl to the account and then transferred the money from the
linked account to another account.

------
mrb
And that's why we need financial alternatives. Alternatives where third-
parties can't unilaterally decide to freeze your account, disrupting your
professional and personal financial flows. Cryptocurrencies solve this
specific problem, because users are in control of the cryptographic keys
therefore they authorize themselves the transactions without a third party
having to be involved.

------
qaq
I bet paypal is running some ML based service that flags accounts so the rep
could not explain the reason even if the rep wanted to.

~~~
viraptor
I'm not sure if that's what PayPal does, but whenever I saw fraud policies in
companies, they never provided specific rules violated and for a good reason.
If you know the exact rule you're breaking, you know what else to change for
your scam to work. Pretty much the same reason you get "authentication failed"
rather than "your password's 2nd letter didn't match".

~~~
chii
But the problem here is that paypal doesn't tell you if you're business is
"ban-able" ahead of time. They have a list, and terms of services, but even if
you followed them to the letter, they can still ban you, and not provide a
reason.

This isn't a good foundation for a business to depend on, so i would
completely avoid having paypal as the only option.

------
ingenium
This same thing happened to my personal Paypal account out of no where one
morning. I hadn't used it in over a month. My mother's personal Paypal account
(lives in a different state) was also banned at the exact same time. She
hadn't used it in months. We still have no idea what triggered it.

------
Legogris
I was banned from PayPal after 11 years - because my account was initially
registered when I was under 18, which is a breach of ToS. They explicitly
forbid me to register again. It really came out of the blue from nowhere.

Luckily for me I don't rely on PayPal so I put it in the "good riddance"
category.

------
chimen
The internet is literally saturated with Paypal horror stories. Why do we
still see so many tears so often? How many bad reviews does a business like
Paypal has to have before people start learning from the mistakes of others
and not trust them with their business?

------
croisillon
Is there some kind of a PayPal hall of shame listing all the similar blog
posts?

~~~
superkuh
[http://www.paypalsucks.com/](http://www.paypalsucks.com/) was the place long
ago. I don't know about recent stuff.

------
YeahSureWhyNot
LPT: Always withdraw your money from PayPal. If PayPal refunds your customer
and your balance goes to negative, no worries because the collection PayPal
sends you to is not connected to your social.

------
ezoe
Paypal doesn't satisfy the Japanese regulation by money transfer law(資金決済法)
which protect users from malicious money transfer service and alike. That
tells something about their moral.

------
bdibs
This also happened to me. They shut down the account with no warning, and
ended up holding the balance (a little over $10k) for 180 days.

Switched to Stripe and I haven’t been happier.

------
WhiteOwlLion
Does PayPal still require you to arbitrate in California? This is why auto-
sweep is so useful. At most, they can only have 3 business days of your money.

------
whydoyoucare
Any service that favors self-designed moral and ethical values over business
sense should be ditched quick and now. Yes, this is PayPal.

------
simonebrunozzi
What's the best alternative to Paypal today?

~~~
NightlyDev
I'm having security issues with PayPal payments(customers making fake
chargeback in an attempt to get things for free). Stripe seems like a better
choice and I plan to switch, but PayPal is well known and trusted by buyers.

Sellers should not trust PayPal, at all.

------
miguelmota
Hope people learn that vendor lock-in can be a terrible experience when stuff
like this happens. Always have alternatives lined-up.

------
modzu
i've always assumed paypal was software and hence why they were so profitable
-- those decisions, appeal processes, everything is all automated. you're
sending emails complaining to... the email server.

actually thats a growing business (bots to handle your customer service) which
simply programmatically enforce a contract. it's terrifying.

------
joeblau
My question to the op is: Where were you for the few years of posts when other
people wrote the same thing, yet you stuck with PayPal?

It feels like people don’t want to actively move their payments processor and
no amount of blog warnings are going to change that. The one thing I will say
is that the growing amount of responses of teams that have similar experiences
should be worrying to PayPal.

------
jedberg
PayPal spends a lot of money on lawyers to make sure that no state or country
considers them a bank. The reason is so they can avoid banking regulations.

If they were subject to regulations, they wouldn’t be able to freeze your
account without warning, nor hold your money for 180 days.

As they say internally: “we don’t make money by letting people have it back”.

~~~
jedimastert
> As they say internally: “we don’t make money by letting people have it
> back”.

I'm gonna need a source for that.

~~~
pbhjpbhj
Just in case you don't know I'm almost certain jedburg is the person in the
profile here
[https://www.meetup.com/devops/events/191408942/](https://www.meetup.com/devops/events/191408942/).

------
S_A_P
So from what I can gather, niteo is a SAAS. For Paypal to ban them in what is
a pretty non controversial business, they must have commited one of the
following offenses:

1)Breach this user agreement, the PayPal Acceptable Use Policy, the Commercial
Entity Agreements (if they apply to you), the PayPal Cash and PayPal Cash Plus
Account Terms and Conditions (if it applies to you), or any other agreement
between you and PayPal;

2)Violate any law, statute, ordinance, or regulation (for example, those
governing financial services, consumer protections, unfair competition, anti-
discrimination or false advertising);

3)Infringe PayPal's or any third party's copyright, patent, trademark, trade
secret or other intellectual property rights, or rights of publicity or
privacy;

4)Sell counterfeit goods;

5)Act in a manner that is defamatory, trade libelous, threatening or
harassing;

6)Provide false, inaccurate or misleading information;

7)Send or receive what we reasonably believe to be potentially fraudulent
funds;

8)Refuse to cooperate in an investigation or provide confirmation of your
identity or any information you provide to us;

9)Attempt to double dip during the course of a dispute by receiving or
attempting to receive funds from both PayPal and the seller, bank or card
issuer for the same transaction;

10)Control an account that is linked to another account that has engaged in
any of these restricted activities;

11)Conduct your business or use the PayPal services in a manner that results
in or may result in; -complaints; -requests by buyers (either filed with us or
card issuers) to invalidate payments made to you; -fees, fines, penalties or
other liability or losses to PayPal, other PayPal customers, third parties or
you;

12)Use your PayPal account or the PayPal services in a manner that PayPal,
Visa, MasterCard, American Express, Discover or any other electronic funds
transfer network reasonably believes to be an abuse of the card system or a
violation of card association or network rules;

13)Allow your PayPal account to have a negative balance;

14) Provide yourself a cash advance from your credit card (or help others to
do so);

15)Access the PayPal services from a country that is not included on PayPal's
permitted countries list;

16)Take any action that imposes an unreasonable or disproportionately large
load on our websites, software, systems (including any networks and servers
used to provide any of the PayPal services) operated by us or on our behalf or
the PayPal services;

17)Facilitate any viruses, trojan horses, malware, worms or other computer
programming routines that attempts to or may damage, disrupt, corrupt, misuse,
detrimentally interfere with, surreptitiously intercept or expropriate, or
gain unauthorized access to any system, data, information or PayPal services;
Use an anonymizing proxy; use any robot, spider, other automatic device, or
manual process to monitor or copy our websites without our prior written
permission; or use any device, software or routine to bypass our robot
exclusion headers;

18)Interfere or disrupt or attempt to interfere with or disrupt our websites,
software, systems (including any networks and servers used to provide any of
the PayPal services) operated by us or on our behalf, any of the PayPal
services or other users’ use of any of the PayPal services;

19)Take any action that may cause us to lose any of the services from our
Internet service providers, payment processors, or other suppliers or service
providers;

20)Use the PayPal services to test credit card behaviors;

21)Circumvent any PayPal policy or determinations about your PayPal account
such as temporary or indefinite suspensions or other account holds,
limitations or restrictions, including, but not limited to, engaging in the
following actions: attempting to open new or additional PayPal account(s) when
an account has a negative balance or has been restricted, suspended or
otherwise limited; opening new or additional PayPal accounts using information
that is not your own (e.g. name, address, email address, etc.); or using
someone else’s PayPal account; or Harass and/or threaten our employees,
agents, or other users.

These terms run the gamut from being bad with money (negative balance) to
criminal. That is a wide swath of terms to action against you or your
business, and leave plenty of room for arbitrary ban hammers to be wielded. I
can agree that there are way better and safer ways to accept payments these
days, and it seems PayPal hangs on with name recognition, and not by merit of
it being the best choice.

~~~
suff
Their company is an Eastern European 'SaaS' company whose main product
automates blog network deployments so marketers can run campaigns that spam
Google's ranking algorithm. SMH. You got banned because you're a spamware
company.

~~~
dmurko
Founder here. We're not processing our "spamware" through PayPal, as mentioned
in the post:

> The most interesting thing is that we’ve moved away from PayPal in the last
> two years and have only been receiving some minor payments and paying for a
> few online services.

We've stopped using PayPal for our SaaS business a few years ago.

~~~
blantonl
PayPal doesn't know that.

I highly doubt that PornHub would be allowed to run payments for a side-
business based on data analytics through Paypal.

If it walks like a duck, and quacks like a duck....

------
dreamcompiler
Why is PayPal not yet regulated as the bank that it is?

------
qwerty456127
This is a great example why need ctyptocurrencies so we could just pay without
relying on any 3rd party. People who run around yelling ctyptocurrencies are
for drugs only should think about this.

------
PaulHoule
My wife got kicked off PayPal in 2005 because of a password problem. Maybe she
could have reactivated it by sending a fax, she never did. Since then she asks
me to buy stuff on ebay.

------
intrasight
Paypal? Seriously? I've no sympathy.

------
brakmic
This and similar behavior is what ultimately drives people toward
decentralized solutions, like Bitcoin for example.

~~~
mavdi
HN is traditionally anti crypto, but just want to point out that literally no
one in this world can stop you accepting Bitcoin payments. That's the true
power of decentralization.

~~~
freddie_mercury
Sure they can. Accepting Bitcoin for payments is illegal where I live. It is
enforced by fines and jail time, just like all other laws.

~~~
brakmic
Which country? Nobody can _stop_ you from accepting cryptocurrency.

~~~
freddie_mercury
Just like nobody can _stop_ you from murdering another person or demanding a
bribe or any number of terrible things.

I don't understand the point of your vehement sophistry. Everyone understands
how societies work. There are laws. People get punished after the fact for
transgressing them. Cryptocurrency is not somehow magically exempt from that
reality.

~~~
brakmic
I don't understand your point. Just wanted to talk about technology. But ok,
no problem. Have fun.

~~~
dkersten
The person you replied to said that cryptocurrencies are illegal where they
are. You said nobody can stop you from accepting cryptocurrencies. Just like
nobody can stop you from doing any other illegal thing, like not paying your
taxes or taking drugs. Sure, you can do these things and you may even get away
with it, but if you get caught, you get fines or jail time or whatnot. If
cryptocurrencies are illegal where the person you responded to is, sure they
_technically_ can accept cryptocurrencies, but if they get caught, its no
different than getting caught doing any other illegal activity. You might say
"well, its hard to get caught!" but you could say the same thing about
laundering money, evading taxes or buying drugs, yet people get caught doing
these things all the time.

------
chaostheory
Good thing there's Stripe

------
instaheat
So what should we use? Stripe?

------
chmod775
I've been preaching this since forever.

Don't rely on PayPal. They're less professional than a kid selling juice next
to the road.

There are no grace periods with PayPal to give you time to move to another
service.

There is never more than a generic reason and stonewalling when they terminate
you.

And yes, their decision is always final.

They'll happily terminate your only source of income on a friday afternoon,
freeze your funds, then laugh at you as you scramble to get an alternative up
and running.

Don't build on PayPal. It's no foundation at all.

~~~
55555
> And yes, their decision is always final.

Perhaps their decision to close your account is always final, but don't lose
all hope after having your funds frozen. I had 25-100k frozen (can't remember
how much), and picked up the phone and called them and it was unfrozen within
48 hours.

Paypal is god-awful though and should be used as little as possible.

~~~
ru999gol
There are lots of horror stories about Paypal, but there is an obvious
problem, nobody is going out of their way to write a blog post about how
Paypal always worked for them. You can find pretty much the same horror
stories about any Bank or credit card company.

~~~
mrosett
Can you point me towards examples of a bank (not the government - a bank)
confiscating a company’s account balance?

~~~
corbet
Early in LWN's history our credit card acquirer decided that our transactions
were "suspicious". They not only cut us off...they reached into our bank
account and pulled back $30,000 from there. That was a lot of money to us back
then, and very nearly killed the entire operation.

Ironically, the thing that saved us was that the PayPal revenue stream still
worked just fine.

------
tbarbugli
Stripe

~~~
WilliamEdward
What if it's not available where i live?

~~~
falsedan
Incorporate somewhere where it is

------
zer0faith
Never trusted these folks are that guy lost his 1 letter twitter handle.

------
vinniejames
Great reason to switch to cryptocurrency

------
chii
paypal has no business in regulating what software their customers are allowed
or not allowed to sell. Even if it's spam creation software. If it's not
illegal to sell, it should not be blocked by paypal. If the software is spam
and is bad for society, let society introduce a law to ban the software, the
same way you can't sell drugs using paypal.

This moral policing by businesses is bad for society - and lets businesses
dictate more than they ought to be able to.

~~~
astura
Literally 100% of payment processors heavily "regulate" what their customers
sell/do and who is profitable to do business with and what clients are
profitable to associate with.

For example, if an industry has a humongous chargeback and fraud rate, then
they become unprofitable and get dropped. This is why American Express stopped
allowing porn (there was news articles about it at the time and they went on
record saying massive amounts of chargebacks and fraud from porn sites were
solely the reasons). American Express and Visa also don't allow you to use you
to use your credit card to pay your mortgage (Mastercard does). I don't know
the reasons why, but I'm sure it's not arbitrary.

They also have to conform to laws and regulations. This is an offshore
company, PayPal is based in the United States. I don't know if its legal to
sell this sort of spamware-as-a-service in the United States, but I think
there might be AT LEAST copyright issues content harvesting that they appear
to be doing (based on other comments).

These are businesses, not charities.

~~~
magduf
>These are businesses, not charities.

It's not just that: these are businesses, not the government. A lot of free-
speech advocates and libertarian thinkers seem to think somehow that private
businesses somehow have a responsibility to uphold free speech, and they
simply don't. It's the government that can't restrict you from free speech (in
the USA); but companies don't have to put up with it on their property or when
using their service.

~~~
anonymousab
Many people believe that businesses and corporations have a responsibility to
uphold and respect free speech as a societal virtue moreso than as a
constitutional right. This isn't a crazy position given the power many
companies wield over the workings of society.

~~~
dmix
Social pressure on businesses has always been a big part of capitalist
societies and this pressure comes in many forms. Ultimately societies of
people are far more than a sum of their economic system. Economic systems
shouldn't be what defines the morality of the people in society, that comes
through community, culture, media, etc in addition to the judicial systems and
governments (which all capitalist economies operate within).

------
alexandernst
It's very hard to evaluate what's actually going on here. This "post" could
perfectly fit in a tweet. No details whatsoever, no details about wether they
tried to reach to paypal support and if they got any replies. I'm surprised
this isn't flagged.

~~~
chmod775
Did we read the same article? Because the on I read said:

> After calling their support twice, explaining the situation and asking for a
> reason, we have received nothing but “the decision is final, and we will not
> provide more information”.

~~~
blantonl
But the post never explained what the situation was... just that they
"explained 'it'" to Paypal..

They also don't explain what they are accepting payments for, other than "
_receiving some minor payments and paying for a few online services_ "

I suspect there is far more to this story.

~~~
chmod775
They have no idea why they've been terminated and PayPal won't tell them. From
the article:

> We never thought this would happen and have absolutely no clue what they’re
> referring [to]. We have reviewed the user agreement multiple times and there
> is absolutely nothing there that we’ve engaged in.

------
TheOtherHobbes
PayPal badly needs to be hit with an anti-trust suit. This behaviour is
clearly harming end-users, and there are no alternative choices that won't
result in a huge hit to turnover.

Thus, de facto anti-consumer monopoly.

------
gambler
Yes, I too want banks and payment providers to act like moral authority for
all their clients and freeze funds and close accounts with no explanation or
recourse whenever an entity does something I don't like. This will totally
make things better and not be relentlessly abused after the practice is
normalized. Who needs a stable society anyway.

~~~
hbosch
Legal marijuana shops are still mostly cash only specifically because they
can’t bank, due to weed being federally illegal. Bank monitoring is in place
to battle illegal activity, fraud and laundering. If you are doing something
reprehensible, a payment company can be seen as endorsing that behavior by
your association with that bank. I mean, you have a spam network here that was
proudly displaying PayPal’s logo on it.

I agree that it’s not right for payment processors or banks (PayPal is,
unofficially, kind of both) to pass judgement on what their users _spend_
money on... but I also agree that it is not out of line for a payments company
to stop offering their services to businesses designed to spam, defraud,
mislead or abuse people. Gambling websites are also known to trigger these
detections when you try and deposit on to shady accounts.

~~~
gambler
_> Legal marijuana shops are still mostly cash only specifically because they
can’t bank, due to weed being federally illegal._

There is a world of difference between closing accounts that are used to pay
for activities that are _illegal_ and closing accounts because the client does
something you don't like, especially if the service provider can't even point
out which part of their TOS was violated.

 _> businesses designed to spam, defraud, mislead or abuse people_

If you don't draw any distinctions between "defraud" (illegal and well-defined
activity) and "mislead" (can be applied to almost anything), there is
literally nothing to discuss here. You don't draw any objectively defined
lines between what should and should not be bannable and your stance boils
down to "I like when PayPal bans someone I don't like".

~~~
sfkdjf9j3j
What are you getting at here? Do you want the government to restrict free
association in order to provide access to payment platforms for spammers?

~~~
gambler
Where exactly in my post I asked for government restricting free association?
It sounds like you just wanted to post this particular talking point and
couldn't find a place with more relevance.

What do I want?

I want large payment service providers to have clear and universally enforced
rules that pertain only to services they provide, stick to those rules when
deciding whom to ban, provide exact reasons for their decision and have a
process of redress. It's pretty obvious that PayPal fails at this, miserably,
even if you can point out some individual cases where they might be "in the
right".

I also want posters who act like corporate cheerleaders here to provide
independently observable criteria for whatever bans they "approve".
Increasingly often I see astounding hypocrisy when the same person cheers for
banning of one organization and against banning another, even though both are
banned for the _exact same behavior_.

