PayPal adds “non-discouragement” clause to their User Agreement

https://www.paypal.com/us/webapps/mpp/ua/upcoming-policies-full?locale.x=en

by striking • 9 years ago

107 94 9 years ago

phyzome• 9 years ago

«In representations to your customers or in public communications, you agree not to mischaracterize PayPal as a payment method. At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal; and, if you enable your customers to pay you with PayPal, you agree to treat PayPal’s payment mark at least at par with other payment methods offered.»

If you have to add that to your User Agreement, what does that say about your service?

chinathrow• 9 years ago

I read that regarding all your PoS that Paypal is about to enter into direct competition with e.g. Apple Pay and others.

Also, I read that they will raise costs soonish.

elcapitan• 9 years ago

"you agree not to mischaracterize PayPal as a payment method"

English is not my first language, does this mean that by calling PayPal a "payment method" i mischaracterize it? (is it a .. payment service .. whatever?) Or does it mean that I agree not to "mischaracterize" PayPal in general because I don't like it? (then why would I offer it)

ksmithbaylor• 9 years ago

I was confused by this language too. I think it means that in the context of PayPal being a payment method, you agree not to mischaracterize it in any way.

thekevan• 9 years ago

English is my first language and I find the wording confusing as well.

droithomme2• 9 years ago

Your english is good. It's very unclear what it means as the sentence can be parsed different ways. That suggests that either their lawyers are incompetent and shouldn't be let near a contract, or they are are competent and therefore are intentionally trying to fool their customers.

It's probably incompetence though since this can work both ways. If PayPal tried to bring legal action with this clause, the first defense one would look at is to simply respond, "Where did I say it was a payment method? The clause says I can't mischaracterize it as a payment method, and I didn't."

In any case as it reads most simply it says you can't call PayPal a payment method. I doubt that's what they really meant to say.

patio113• 9 years ago

This is de rigeur in payments; the brand guidelines for the big three credit card companies have similar things IIRC. They don't want you to say "Visa accepted here THOSE BASTARDS we prefer Amex" or otherwise interfere with their customer relationships while servicing your customer relationships.

There has been litigation around this routinely, including (IIRC) a US holding that says that merchants are allowed to say X is cheaper for them than Y if that statement is accurate.

Edit: that may have been reversed on appeal. https://www.bloomberg.com/news/articles/2016-09-26/american-...

toomuchtodo5• 9 years ago

Maybe it's only my anecdotal experience, but I've seen a lot more merchants lately flat out stop accepting expensive payment methods like Amex, and these were all merchants that I had previously been able to use Amex at before.

rixed• 9 years ago

So that's the big three credit card companies disrupting PayPal, basically.

Buge• 9 years ago

Part of it seems to be saying you can't charge people extra fees to use paypal.

I know sellers sometimes try to do the same thing with credit cards, charge extra fees to credit card users.

hydrogen182• 9 years ago

I usually just do the opposite. I mark everything up knowing that somewhere a cut will be taken.

If you have to pay me cash, then I just make more on that transaction.

Paul-ish• 9 years ago

Could I try to get around this by offering two "different" (sharpie a red dot on the bottom of the lamp) items, one you can purchase with paypal and another you cannot. Can Paypal require you to accept paypal on everything your business sells?

fencepost2• 9 years ago

Well, if I can't "mischaracterize PayPal as a payment method" then how can I "treat PayPal's payment mark at least at par with other payment methods offered"? Their use of "other payment methods" would imply to me that they consider PayPal also to be a "payment method" though I suppose they might want to call it Bob instead.

I can just see it now: "PayPal is not a legitimate payment method! If you doubt this, see their Terms & Conditions where they explicitly state that you may not 'mischaracterize PayPal as a payment method.'"

Someone did a really crappy job of phrasing.

cnnsucks• 9 years ago

> Someone did a really crappy job of phrasing.

Legal work is an area of life where one should not apply Hanlon's razor by default. Not one comma or period in that work went unscrutinized by highly compensated executive talent at PayPal and any ambiguity you find is deliberate. Assume malice.

TazeTSchnitzel• 9 years ago

I think they mean mischaracterising PayPal in its capacity as a payment method, rather than mischaracterising PayPal to be a payment method.

celticninja• 9 years ago

People will continue to prefer PayPal alternatives when the costs are so much higher to use paypal and I would assume this is generally difficult to enforce because it relies on a user telling paypal that a vendor asked them to use an alternative method. I would make paypal my last payment option offered to a buyer.

hackermailman• 9 years ago

There's sites where they openly ask buyers not to use PP for some items that are high fraud risk and allow PP for less risky items. This means retailers will just drop PP as an option completely. I generally use it for most of my online buying as it's become difficult lately to use prepaid cards for some reason, I used to be able to effortlessly convert cryptocurrency into a virtual visa and buy anything but alas. Paypal, for buyers, is an easy experience now there's no waiting for your account to be loaded from a bank.

toomuchtodo5• 9 years ago

As a buyer, I would rather send in a check or not make the purchase before using Pay Pal.

adamqureshi3• 9 years ago

Buyer insisted on PP. I needed the project / money and did not wanna cause a problem. I asked buyer many times to wire / ACH the money. I kinda "had" to accept PP. Im not a rockstar. Can't demand / insist my preferred method. But there is a happy ending. I still have the gig and now they pay with stripe. ;-)

Animats• 9 years ago

Why is eBay so protective of PayPal? PayPal has been a separate company from eBay since 2015.

hyperbovine3• 9 years ago

eBay stockholders got PYPL shares 1:1 when they split. People who own lots of the former (eBay insiders & higher ups) have a large stake in the latter.

iaw• 9 years ago

Presuming absolutely no shared financial interests and pretending there are no remaining synergies. The people who run ebay have to be close with the people that run Paypal...

The strategies that built paypal were in line with the ebay ethos.

hazelnut• 9 years ago

They still got binding contracts. For example they have to have PayPal as a payment option till 2020 and a decent amount must be processed through PayPal. It might change after 2020.

DrScump2• 9 years ago

With eBay, you have a new fraud vector to worry about:

eBay's "Buyer Protection" is a superset of the former Paypal-centric coverage such that if a buyer initiates a return against a seller, eBay can choose to make that buyer whole by charging the credit card you use for your eBay seller fees and memberships (if any), regardless of payment method used by the buyer.

adamqureshi3• 9 years ago

PP froze my account. (concentrated buyer exposure) They asked me what im selling, i said i offer software services , they asked what is the product , what do i deliver, i said i deliver code , they asked for the service agreement, i said well you'd have to ask the buyer that. They asked me to send them the last 4 invoices , i did. long story short , It was PITA to refund my bread , getting paid with STRIPE is better now. WHAT a damn hassle! I got the buyer on the phone W/ PP.PP said to me only thing i can do i is refund the last 4 invoices and get paid outside PP. Buyer said there is NO issue at all we are very happy with seller services. PP said to buyer: "nothing you did or can do". PP said to " they'd hold my bread for 180 days" then said hold for 90 days OR i can refund the 4 invoices , each time i called i spoke to someone different, they said it was their system, not my fault or the buyer , buyer made no claims at all.. Luckily, the buyer was cool enough to help me. I had to call PP each time todo a refund. Lift HOLD, refund, with then on the phone, repeat. What a damn HASSLE! i set up stripe the next day and its all good to go now! good lucky with PP. they can hold your shit without informing you and you can't do jack shit. And i had people to pay! I am kinda pissed but happy i got paid all my invoices. Does this mean i can't write a blog post about what happ to me? maybe this type of shit is normal with PP.

angry-hacker• 9 years ago

Write a blog post but use few paragraphs ;) the story is interesting but difficult to read.

adamqureshi3• 9 years ago

dyslexia. ;-)

Silhouette2• 9 years ago

It's probably worth pointing out that every online payment service I've ever encountered has incredibly one-sided terms that allow them to screw the merchant more-or-less at will. Even if the service itself doesn't feel the need to use them, the card networks typically require them, so any service backed by card payments will almost certainly have them.

PayPal is notorious for this kind of thing, obviously to anyone who's been around relevant online forums for a while, but then PayPal is also the 800lb gorilla of the online payments industry so it's hard to assess how representative the nightmare stories really are. I don't know enough about the parent poster's story to offer an opinion, but I've seen plenty of vitriol directed toward PayPal from other merchants whose accounts were frozen but who subsequently turned out to have been clearly in violation of reasonable PayPal terms and either hadn't read those terms or had read them but hoped no-one would notice the prohibited behaviour.

I've also heard nightmare stories about many other providers, including about the shiny new startups of recent years. But again, without knowing the context and the overall scale of their businesses, it's impossible to make any objective judgement about how likely it is to happen to you if you're a merchant who is just trying to collect payments and does nothing wrong.

jseliger• 9 years ago

I'm amazed people will still use Paypal. The horror stories about it are legion online; I had my own, many years ago, when I did some editing work for someone who then disputed the charge on their credit card. Paypal then retroactively decided that I had a negative balance on my account!

At the time I was young and stupid and idealistic and principled enough to waste a lot of time suing Paypal and the collections agency in small claims court (suing anyone in small claims court can be a pretty bad idea, even if you are technically in the right: https://jakeseliger.com/2010/08/28/dont-rent-an-apartment-fr... , if your time and attention are worth anything). Still, I did definitely, definitively learn that you cannot trust and should not use Paypal.

jpalomaki• 9 years ago

As a customer I very much prefer PayPal. If site supports PayPal as payment method, this increases the propability of getting my money.

CC is more cumbersome, because I don't want to give my primary credit card info for random merchants and creating new virtual card takes a few steps.

hyperbovine3• 9 years ago

Visa Checkout is, just 20 years too late, finally attempting to solve this problem. I'm way more copacetic about Visa have access to my account information since they already do :)

Endy• 9 years ago

See, I personally do the exact opposite of that. PayPal has caused me more fraudulent bank activity than CC (it may help that my only CC is the debit/credit card from my bank account). So I'll give my CC over the web, knowing that I will know about any fraud when the transaction hits, and I can call the bank immediately - plus I know what retailer specifically did it rather than "PayPal".

analog312• 9 years ago

I've used PayPal to take payments for my side business, for upwards of a decade -- well over 1000 sales. I've never had a single glitch.

Every once in a while, I look into alternative services. So far, PayPal is the only service that lets me run my business using a static web page. They provide the checkout system and handle the card payment for me.

If I use Stripe, I have to create and maintain some kind of active server to process the transactions. With other services, there's always something that makes it onerous to use.

In the long run, I think the buyer protections are more of a benefit than a risk to me. They reassure the customer that I won't screw with their credit card number, or just vanish overnight with no recourse to them.

Note that as a manufacturer, my cost-of-goods is a small fraction of the selling price, so my risk is less than someone using PayPal for a pure cash transaction such as getting paid for work. Also, a physical good that can be returned kind of sets the bar for any customer who wants to hassle me.

So far, the only disputes I've received have been when somebody orders my gadget by accident, and enters a dispute so I can cancel the transaction.

striking• 9 years ago

You can set up a web hook somewhere. https://www.webscript.io is "unlimited" for $5/mo, and AWS Lambda probably also works.

SparkyMcUnicorn• 9 years ago

There's services like http://moltin.com , snipcart, and Stripe now has Stripe.js which I believe can handle payments 100% client side as well.

appleflaxen• 9 years ago

what was the outcome of your small claims suit vs. paypal? settlement? were you reasonably satisfied with the outcome in the end?

bencollier49• 9 years ago

"At all your points of sale (in whatever form)"

Does this not mean that any bricks'n'clicks business has to offer Paypal at their physical counter? And that they can't levy variable card processing fees, at least not where the fee for Paypal is higher?

edoceo• 9 years ago

Thank you for "bricks-n-clicks"

bcrescimanno• 9 years ago

Disclaimer: PP employee--below opinions are my own and do not represent PayPal.

Things I have actually seen myself:

* Charging a fee to use PayPal that is not charged otherwise.

* Modal dialogs before PayPal describing PayPal as slower / riskier / less customized / etc.

* Disallowing PayPal for certain items.

I'm sure there are a lot of others. As patio11 mentioned in a comment below, this sort of boilerplate is common for Payments and I don't see it as unreasonable to ask for equal treatment to be given.

minxomat• 9 years ago

Charging extra for any payment method while offering other common ones is not a problem at all. You have to consider the trouble that a massive number of merchants have with paypal. The risk of dealing with something odd is financially relevant. The time spent on conflict resolution (between merchant and paypal that is) consumes time, which delays payments and has a cascading effect on other operations. This time costs money, which many add as a fee for people that want to use paypal.

I don't know a single commercial seller that once offered or still offers paypal payments and doesn't have a horror story that resulted in serious financial and operational trouble for them.

PP could introduce this if they had a good image. Right now it's considered by many to be the ... Oracle of payment processing.

Atheros• 9 years ago

It wouldn't be unreasonable for equal treatment to be given if the service you provided was equal. It is not. That's why merchants dissuade its use.

chipperyman5732• 9 years ago

All of these things are done because PP has, at some point in the past, screwed over the merchant. Paypal is so bad that at this point, it's not even unreasonable to assume that even a part-time seller has never had a problem with them. The only reason any seller uses them is because the customers prefer it or they don't want to set up their own Stripe integration.

It's blatantly clear that PP existed with nearly no competition for many years.

stordoff• 9 years ago

I don't see it as unreasonable to ask for equal treatment to be given.

If the service was equal, I doubt you'd need to ask - those discouragements likely only exist because PayPal is a more risky and/or costly payment method for the seller.

gravyboat• 9 years ago

All of these things are fair though.

* Paypal charges the merchant more (in terms of fees in some cases, holding funds, and time wasted dealing with PayPal's nonsense), so why wouldn't they inform customers of this? If you have a loyal user base they would want more of the money to go to the merchant with less friction, not PayPal.

* Paypal is slower/riskier/less customized, etc. Have you done a checkout on PayPal recently where you didn't have a PayPal account? It sucks.

* Disallowing certain items is absolutely necessary. PayPal can (for no reason at all) allow customers to hose the merchant, and often it can be much more annoying to get a refund even when the merchant seems to want to provide one.

So yeah, when the service offered is equal, maybe we can discuss equal treatment, but until then people should be recommending their customer's don't use PayPal if they don't have to. The alternatives are lower cost, easier to use, more customer/merchant friendly, and generally more enjoyable to use.

I've gone my entire life without creating a PayPal account (even when I have to use it as part of the checkout process) and I see no reason to change that now or ever.

zAy0LfpBZLC8mAC• 9 years ago

WTF?

So, in your opinion, equal treatment means that you have to sell broadly similar products from different manufacturers at the same price? So, Porsche could require that you sell their cars at the same price as a Fiat, even though you have to buy it from them at a much higher price than what you pay for the Fiat?

How the fuck is it not obvious that paypal gets treated differently because it is fucking different? Do you seriously think that merchants make up such rules arbitrarily? That it's not maybe that paypal is expensive, so they do the only thing that's fair: They charge the person responsible for the increased costs those increased costs? That it's not maybe that paypal lets itself be used for fraud much more easily than other payment methods in some scenarios, so merchants aren't willing to take that additional risk?

justinzollars• 9 years ago

Just under the non-discouragement clause:

We are changing the standard transaction fee for sellers selling goods or services online to buyers outside the U.S. from 3.9% to 4.4% plus the existing fixed fee based on the currency.

lathiat• 9 years ago

holy hell, that is getting ridiculous

ve55• 9 years ago

Paypal is offered a lot as an option for virtual goods, such as virtual items or services for games. There is always a lot of caution around it, because anyone that has used it in this area for longer than a day realizes that they can be scammed nearly arbitrary amounts if they decide to trust payments from Paypal.

For this reason, it's generally required either that you do out of bound methods to help verify your identity (i.e. show us a picture of your ID and we will make sure it matches your Paypal name after you pay us), and/or that you have a lot of reputation within whatever community you're working from.

If you do this verification wrong as a merchant, you will find yourself charged back with absolutely no recourse after you have only sold to a few customers. I've seen this happy many times, sometimes with $10 and sometimes with $1,000. Even if you do this verification correct, you can still find yourself charged back with no recourse, so it's advised not to do this with large payments or sketchy customers, especially in the area of virtual goods. This is also commonly done in areas wiht donations, such as Twitch donations of thouands of dollars being charged back after the sender has already recieved their desired reaction/fame/etc.

Given what I have seen, I read this clause as a requirement that you are not allowed to fairy inform users about the risks of Paypal, and depending on how this requirement is enforced, it could mean the end of Paypal as a method in the virtual goods area, as new methods like Bitcoin slowly take over due to the lack of chargebacks.

inopinatus• 9 years ago

I run a two-sided network. Our providers sometimes ask if PayPal is possible. It's helpful they include draconian language like this in their contracts; giving me something to reference, other than the myriad horror stories, when saying No.

They're their own worst enemy.

cardiffspaceman2• 9 years ago

I read that draconian language myself back when the buzz first started about Paypal, too. I don't understand how convenience is so valuable that you'd put your whole account at risk.

throwawaydbfif2• 9 years ago

I can't believe PayPal and the credit card cartels can get away with this shit. Card fees eat up an astounding amount of profit from low margin items, retailers should be able to encourage whatever payment method they want.

If customers knew how much they were actually paying to these card companies indirectly (thousands of dollars a year) most people would switch to cash

nayuki• 9 years ago

True. At the same time, don't forget that banks charge business a small fee to deposit cash into their bank account. For example: https://www.tdcanadatrust.com/products-services/small-busine...

csdreamer7• 9 years ago

That's for Canada. In the US I have seen a lot of business checking accounts accept the few bunch of checks for free. ACH transfers are unlimited.

They even fee cash and coin deposits. I have never had a bank charge a fee for cash (or coin) deposits.

tveita• 9 years ago

In Canada the Interac debit card network has transaction fees on the order of a few cents. It's crazy how much money US payment processors manage to skim off.

DrScump2• 9 years ago

Prior posting, 45+ comments:

https://news.ycombinator.com/item?id=13591601

PayPal adds “non-discouragement” clause to their User Agreement

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