More Paypal nonsense

http://www.regretsy.com/2011/12/05/cats-1-kids-0/

by bradleyjoyce • 15 years ago

870 246 15 years ago

regretsy.com

Hilyin• 15 years ago

Paypal is a bunch of scumbags. They deserve to go out of business.

brianr2• 15 years ago

These horror stories are so common that I have to ask: why does anyone still use PayPal?

I ask this in the most constructive way possible... is there a set of use-cases that PayPal is still the best for? Is it a lack of awareness of alternatives? International availability? Something else?

bphogan3• 15 years ago

Because buyers keep demanding sellers use it. If you're a buyer, it's about the most painless thing out there. I got forced into it by a client once for that very reason. Unfortunately PyPal froze his account with about $20k in it. We switched to a real merchant account and everything went uphill from there.

DanI-S2• 15 years ago

Is there a current best alternative to PayPal that you would recommend?

sp3323• 15 years ago

Mainly international payments. Plus, customers are more likely to already have an account with them, and no one feels like signing up for a new payment system just to buy something at your store.

brianr2• 15 years ago

I'd be curious to know how conversion rates vary when you have Paypal vs. a merchant account (or something like Stripe) vs. both. Anyone have any data?

james332• 15 years ago

40% of my customers will only pay with PayPal. I went without PayPal for about a month at one point and sales were down dramatically even though I still had credit card and other options available.

wdewind9• 15 years ago

Because in reality paypal is actually pretty awesome (note: I work for Etsy which uses paypal as a payment processor, so I guess I'm kind of biased). The cost for the business, compared to maintaining your own payments platform at scale, is pretty reasonable, and the failure rate is pretty miniscule when you consider the amount of potential fraud that goes through the platform.

Paypal wasn't really designed to handle one off personal payments, it was designed to let small (and large) businesses accept payments, internationally and fraud free. This is ridiculously difficult (how many of you have ever written software that integrates with a bank? ugh.) PayPal does this exceptionally well and because of that many huge businesses are built on its back.

The reality is, in most of the situations that people complain about freezing their money, without paypal their entire project would've been a no-go anyway.

I do feel for people who legitimately have their accounts wrongly frozen (I am one of them, though mine was unfrozen after a few days), but you have to understand how small a percentage of people that is, and that you can't have a system without failure. Again, paypal's failure rate, when you consider what they actually do, is astoundingly low.

Edit: Just for absolute clarity - I work for Etsy and have zero affiliation with the blog from the OP, and it has zero affiliation with Etsy. Also these are my opinions not my employers etc.

latchkey3• 15 years ago

I wrote the software that integrates with WePay. They are a 'real' bank. Works great. ;-) https://github.com/lookfirst/WePay-Java-SDK

joshu• 15 years ago

IIRC Paypal was originally designed for interpersonal payments.

runako2• 15 years ago

>> I do feel for people who legitimately have their accounts wrongly frozen (I am one of them, though mine was unfrozen after a few days)

This is the heart of the issue. Based on anecdotal evidence, there is little to no transparency in the freezing/unfreezing of accounts. This makes PayPal a cash flow risk to any business that relies on it for funding. I wouldn't be comfortable if my employees' pay depended on cash flow coming in from PayPal unless I had other dependable sources of emergency cash flow that could be tapped for indefinite periods of time.

It's good that your account was unfrozen after a few days, but what if you needed the money to pay your employees, so that they could pay their rents? Getting lucky with a short freeze is not a business strategy.

thomasgerbe• 15 years ago

Because it is what most sellers offer for transactions.

dangrossman9• 15 years ago

> These horror stories are so common

Don't take that for granted. PayPal has 232 million registered accounts, and many more unregistered buyers. Even if 99.99% of PayPal account holders were completely satisfied and never had any problem, that'd 0.01% would still be 23200 pissed off people.

Is it right to wonder "does anyone still use PayPal" if 99.99% of PayPal users have no problem using the service?

ubernostrum• 15 years ago

The problem with PayPal, and the reason why these horror stories exist at all, is simple: the entirety of PayPal's dispute-resolution system seems to consist of "the system flagged it, tough luck". And the only way to get actual service from PayPal past that point is to raise a massive cry of bad PR for them online.

So, yeah: if they don't want to deal with their customers, we can fix that by encouraging a situation in which they have no customers to deal with.

_yobq• 15 years ago

There is no good alternative. Existing alternatives require additional user signup, and the fees are the same.

The Internet needs a good Paypal competitor.

hokua• 15 years ago

Im guessing this rant was submitted and upvoted by the developers of Stripe. Paypal works.

ugh• 15 years ago

Because – as a buyer – PayPal is quite awesome.

vaksel• 15 years ago

Paypal has a reputation for stuff like this...can't exactly be a surprise

CaveTech• 15 years ago

It really perplexes me as to how paypal can get away with withholding money from people. What is stopping them from simply picking accounts at random and saying, "actually, I don't think you deserve this money, so we'll keep it."

daemin• 15 years ago

I think they legally have to refund the money, although it would seem that they keep the transaction fees still.

dangrossman9• 15 years ago

When PayPal terminates an account and holds the funds, they're returned after 180 days. The same as any merchant account that's terminated. It's to cover potential chargebacks, which can come in months after the fact -- though they really shouldn't do that when the only payment the frozen account received wasn't funded by a credit card.

quicksilver03• 15 years ago

Does anyone known if when PayPal returns the held money they also pay the legal interest? Or if they have some specific clause in their contracts that allows them not to?

kevinalexbrown• 15 years ago

PAYPAL: I haven’t seen that PDF. And what you’re doing is not a worthy cause, it’s charity. ME: What’s the difference? PAYPAL: You can use the donate button to raise money for a sick cat, but not poor people.

Sigh. At the risk of pedantry, it's hard for my wtf filter to believe this without more context. Is this a direct quote?

Zarathust2• 15 years ago

Yes this is the major point of the exchange to me. It is not really for scam prevention and it has nothing to do with what is a donation or legal context. I just don't get the reason why people is not ok.

skore3• 15 years ago

I think this one is very simple to understand: Pets don't commit fraud.

Or put differently: If somebody is running a scam here, the "pet" scenario would mean that it is you. The "poor people" scenario would mean that it is somebody else, making the whole situation a lot more complex. I think this is simply a matter of internal risk assessment triggers.

there• 15 years ago

i don't think it's an issue of people vs. animals, it's an issue of "save poor people that aren't being named and won't produce an audit trail" vs "save this cat that belongs to me, the owner of this paypal account".

strictly on a risk assessment basis, an organization not registered as a 501(c) taking in lots of money for a generic cause is more likely to be fraudulent than one specific person that paypal can easily identify taking a smaller amount of money to save his cat.

paypal is probably just as comfortable with "save walter white" as they are with "save mr. marbles", but not "save people like walter white" or "save cats like mr. marbles".

knightgj2• 15 years ago

I'll be looking at alternatives after receiving the friendly "We reviewed your account and determined that there's a relatively higher than average risk of future transaction issues" email that states they'll be holding my money for 21 days...

I have never made a claim. I have never had a claim filed against me. My account receives maybe $500/year, tops. I send $500/year, tops. HUDGE risk of transaction issues.

bcl• 15 years ago

I got one of those after years of service with 0 problems, so I canceled my PayPal and eBay accounts. I haven't missed them.

saurik13• 15 years ago

What are you selling?

einhverfr14• 15 years ago

When my account was frozen I was selling IT services, internationally, but I was also told it wasn't about my transactions at all.

knightgj2• 15 years ago

i just use my account for personal use. selling used things via forums/ebay/cl.

8plot4• 15 years ago

Have you considered using bitcoin? If you have considered, but dismissed it, would you mind answering why bitcoin wouldn't work for your business?

skore3• 15 years ago

I think it's safe to say that for most businesses, while PayPal may only get you access to 80% of potential customers, Bitcoin gets you less than 1%.

Until Bitcoin is an established process, offering it means that you have to evangelize it. That means you are suddenly in the position of trying to sell both a service and a currency to a customer. That's more risk than most merchants want to take.

I did consider using it, I have a business with a fairly technical audience, but for now, I have to wait until the legal issues (whether only perceived or actually true) are worked out.

james332• 15 years ago

Almost this exact scenario happened to me a few months back, and they did the same, asking me to sign an agreement saying I knew what I did was wrong (it wasn't) and that I wouldn't do it again. I absolutely refused to sign such a thing, and thankfully a friend of a friend knew someone in a high position at PayPal that finally got it all sorted out. Two weeks of extreme stress later, but at least it got worked out. Take unusual measures and if you are lucky you'll get it worked out.

latchkey3• 15 years ago

I'm a huge fan of WePay. They don't play these games.

With all of the different competing solutions out there these days, I don't know why anyone continues to use Paypal.

angusgr2• 15 years ago

If you're not in the US then the number of competing solutions (that don't require a merchant account) shrinks dramatically.

I'm in Australia, and I don't know of one (have checked out WePay, Stripe, Samurai all mentioned in the comments here.)

latchkey3• 15 years ago

Just curious cause I don't know how it works... do you just find a way to create a foreign US company and run through that?

npc• 15 years ago

I'm sure everybody knows by now, but this is certainly not the first time paypal has done this kind of thing:

http://www.somethingawful.com/d/news/paypal-fiasco-summary.p... (slightly nsfw)

dangrossman9• 15 years ago

That's a story of how a payment processor froze an account that had a sudden, incredible jump in processing volume, just like any payment processor in the world would have done. When he contacted PayPal they, understandably, wanted some evidence that the money was going to be used for the stated purpose, because if it's not PayPal could be on the hook for $30k in chargebacks and a few thousand more in fees. Instead of doing some work to provide convincing evidence, he asks a CSR to donate all his account money to Red Cross which she can't do, then gives up immediately and directs them to refund all the payments.

I don't see anything about this story that makes PayPal look bad. Not objectively at least. Subjectively, we'd like the fundraiser to have worked out, but it's the processor on the hook if the fundraiser is a scam...

rmc3• 15 years ago

I know they are partially being tounge in cheeck, but Something Awful's Privacy Policy implies they should not be trusted with money:

We may share data with the following third parties: WHOEVER WE FEEL LIKE. IF A RANDOM BUM OFF THE STREET WANDERS IN HERE, WE'LL PROBABLY GIVE HIM YOUR IP ADDRESS IN EXCHANGE FOR A HAND JOB. These third parties will use the information as follows: EMOTIONAL BLACKMAIL.

geuis• 15 years ago

At the risk of being perceived as the devil's advocate, let me ask a question.

I've heard of dozens of stories about Paypal along a similar vein. "They locked my account for unreasonable reason X and now are keeping the money".

Most of these stories seem anecdotal. Can someone point to a rigorously documented set of cases where both Paypal and the customer's side of things are reviewed?

Over the last few years, all of these "Paypal screwed me" stories have sounded like all the complaints a few years ago about Apple seeming to reject apps arbitrarily. As far as I know, the complaints about Apple from devs have largely died down since we've had a fairly straight-forward list of do's and don'ts to work from.

If most of the people reporting problems with Paypal are doing things that are inconsistent with their policies and then saying publicly how they're being screwed, then that creates a negative reputation for other people who have never personally had a problem with Paypal.

dangrossman9• 15 years ago

I've yet to see a "PayPal horror story" that didn't fit into one of the "any payment processor in the world would consider this high risk and temporarily or permanently freeze the account" slots.

If this discussion with the customer service rep did occur as written, it's the most ridiculous one I've seen yet, though. It's a major customer service fail even if the original reason for freezing the account was valid.

wdewind9• 15 years ago

Absolutely: that every other payment processor in the world would do the same thing is hugely relevant. Paypal is just the only one it's easy enough to set stuff up with, so they get all the bad press.

SCdF• 15 years ago

Can you explain how the OP's situation is high risk?

pyre2• 15 years ago

I'm curious as to why this person would be told "oh, you have to do this," only to be told, "oh, you're not supposed to do what we just told you, and it's your fault that you did that."

It's like a page out of the "let me jam a pineapple up your ass" book of customer service.

einhverfr14• 15 years ago

I have a client who is a payment processor who specializes in high risk transactions. Paypal is not. The problem though is that Paypals definition of risk can be overinclusive to the point of being arbitrary. When I had my account frozen, I was told it was because my wife had sent money to someone else who was accused of violating the ToS. So here we have an account suspended because someone from the same IP address sent money to someone else, and that third party was accused of violating the ToS. I wrote them a nice nastygram, stopped taking credit cards for a while, and later started up again with Amazon Payments instead.

Fraud of this sort of thing is a difficult thing to solve. I don't envy Paypal's position here. However, their approaches are unprofessional at best....

InclinedPlane2• 15 years ago

Some of this is paypal's own fault. They've created the expectation that transferring money from anyone in the world to anyone else in the world should be painless and frictionless. For many cases paypal lives up to that (really quite amazing if you think about it) level of service. But the world is not a perfect place (nor is paypal of course) and a lot of people run into problems and their instinct is to blame paypal for both of those imperfections.

More so, people can use paypal without having any amount of experience with alternate payment processing methods, so they have no yard stick of comparison. They just don't know that any payment processor in the world would stomp all over them to the same or greater degree, so they merely level a harangue at paypal for not living up perfection.

bphogan3• 15 years ago

I can't. I replied elsewhere in these comments that it happened to a client of mine. I made a lot of money in one weekend doing emergency "I told you so" payment gateway switching for him so he could take reservations.

But it's my recollection they're not a bank, and so they have no real obligation to act like one. So when they do this kind of stuff, I'm not surprised.

And I wouldn't want to be them. They probably deal with fraud and schemes on the scale none of us could possibly imagine.

PayPal - the Mos Eisley of e-commerce.

brazzy• 15 years ago

Actually, Paypal's European operation is officially registered as a bank in Luxemburg.

LearnYouALisp• 15 years ago

A friend of mine down the street tried to sell an online account via PayPal. The would-be buyers sent the money to his PayPal account, got the online account credentials from him, then took the money out of PayPal. The money was lost but the admins for the software he used the account on reinstated it to him since this happens a lot. There are scammers with deep penetration into PayPal.

jeltz• 15 years ago

I have also experienced one such scammer when selling software using Paypal. Now for me it was nothing important since no physical object was lost. But that time I learned that Paypal chargebacks are an excellent way to scam vendors, and that the conflict resolution tools of Paypal are a joke.

sp3323• 15 years ago

The problem isn't so much being cut off as having no recourse. PayPal didn't just freeze the assets temporarily, pending investigation. They arbitrarily decided that this organization shouldn't be allowed to access the customers' money. No appeal or review is offered. That's the horror story.

einhverfr14• 15 years ago

Of course you have recourse. It's called "District Court." Unfortunately you have to sue them where the court has jurisdiction, which means hiring a lawyer where they are located.....

Shenglong• 15 years ago

A lot of us have similar experiences with Paypal. When something like this has happened to you personally, it's a lot easier to accept that it's true.

What I'm having trouble understanding, is how he even got through to someone who spoke English.

einhverfr14• 15 years ago

My business account was frozen by Paypal for a similar non-reason. I am not going into the details here but I chose to simply wait it out ($2 balance at the moment) and take my business to Amazon Payments.

The issue in my case was not me. It had to do, iirc, with someone my wife had done business on regarding Paypal, and we were required to verify all info on all accounts that had ever been accessed from our IP address. In other words they froze my account because someone unrelated to me was arguably (though maybe not certainly) violating their terms of service. Since that included my brother in law's account and he was abroad at the time, it was too much of a headache.

I have basically taken up advocating to all of my customers not to rely on Paypal.

Zarathust2• 15 years ago

A lot of dev complaints toward Apple was that there was no strict guidelines. Applications seemed to be rejected for stuff outside the boundaries of the actual terms.

I'm pretty sure the process is much more straightforward now, which checklists and cheatsheets

schmrz• 15 years ago

Also, have any of these people contacted paypal before using their services? I'v spent around an hour waiting for and talking with paypal support to make sure that I'm able to use paypal for my new project without any problems.

coderdude• 15 years ago

Fun fact: The horror that is PayPal came from the same guy who gave us our hope for the bright future of commercial spaceflight. PayPal has vertically integrated every step required to stiff you. They can do it safely and reliably, but a public mishap like this one may cost them.

daniel-cussen• 15 years ago

I've been on this forum for a long time, and I'd estimate that a new Paypal horror stories surfaces once a month. There's no shortage of them. Every one of those costs them something, no doubt, but not enough for them to knock it off.

ken_railey• 15 years ago

Unfortunately, the PayPal of today is a far cry from Peter Thiel's original vision. It was supposed to be an extra-governmental currency more akin to something like bitcoin, until Ebay got ahold of it. http://www.amazon.com/exec/obidos/ASIN/0974670103

danilocampos2• 15 years ago

I've been sitting here for the last five minutes trying to make a point eloquently. I'm having a hard time with it. So I'll just put it like this:

What else can we really expect from a product whose parent is eBay?

This company is a fucking fossil with all the hunger for customer satisfaction of a used tissue.

Is it convenient for users? Yeah. Is it worth gambling your entire business on? Given the lack of accountability these clowns enjoy, I'm going to say probably not. Neither eBay or PayPal has evolved in any meaningful way in the last decade. On the contrary: they've steadily declined in user experience and customer satisfaction. Why trust a business to such a stagnant concern?

On principle, on practicality, for the sake of all of our futures: just say no to PayPal.

wdewind9• 15 years ago

For the other side:

http://news.ycombinator.com/item?id=3318009

http://news.ycombinator.com/item?id=3318173

eykanal• 15 years ago

Paypal may have a point, they may not. Regardless, freezing thousands of dollars on a whim because "they're worried" and then freezing the individual's personal account is just boneheaded. You can't run a bank like that.

gergles• 15 years ago

Wow, that's histrionic.

PayPal's customers are the people who use it. You, as a merchant, are not a customer of theirs, but a necessary evil to keep the customers coming. PayPal's customers love it. PayPal's merchants don't like it because PayPal has fraud prevention methods that are opaque and hamfistedly applied. That's a fine complaint, but this breathless "for the sake of the world don't ever use PayPal" garbage is pretty ridiculous.

If you want to do anything beyond selling tangible goods or simple subscriptions, you should probably reevaluate using PayPal to do that. PayPal isn't the best product for everything, and frankly, I'm sick of every merchant doing some crazy scheme (seriously, "give us money and maybe we'll send you a gift of some unspecified value in the future"? can you fucking spell "chargeback"?) bitching and moaning into the HN echo chamber whenever PayPal tells them to stop that.

danilocampos2• 15 years ago

> but this breathless "for the sake of the world don't ever use PayPal"

You know, I've been working on my condescension. I really have – my last girlfriend hated that shit. And it's gotten a lot better. But you just had to use a cutely loaded little word like "histrionic," so there's really no other course...

So what I'd like to do now is offer a brief explanation of how quotation marks work.

Generally, quotation marks are used to attribute their contained content, verbatim, to a specific person. By including words in quotation marks you are saying, in effect, "this person said precisely this."

I did not say precisely what you quoted. What I said instead (handily, the text is right there), was that for all our futures, where we is a group of people who care about building things and getting paid, that we shouldn't pin our hopes on a company that can declare our money limbo-ed on a whim. The more who avoid PayPal as a result of their flakiness, the brighter the future looks for a sane payment processing landscape.

It's okay to have policies. It's okay to have business models you will and won't support. What isn't okay is to both handle large sums of people's money and make your customer service a recourse-free black box at the same time.

navyrain• 15 years ago

Firstly, you've got it backwards. Paypal takes a cut of the merchant's revenues for virtually passing the money from the consumer to the merchant; therefore, the merchant is PayPal's customer, and the consumers the necessary evil.

Secondly, PayPal didn't simply say "stop that". They gave him the runaround, froze unrelated accounts, and stonewalled him when he tried to make whatever accommodations would please them. That they were rude and condescending during all of this only adds insult to injury.

"Don't ever use PayPal" is really a reasonable reaction to these sorts of stories. When a seemingly legitimate transaction can unexpectedly invite the fury of paypal's overzealous fraud protection drones, how could the reaction be anything but?

tallanvor• 15 years ago

First, the merchants are the customers - they're the ones paying the fees to provide the service to their customers.

Second, you don't have to be a merchant to hate PayPal. Most of the time I will simply choose not to buy something rather than use PayPal. --The last time I couldn't avoid them was about 2 years ago.

Pedrom• 15 years ago

And I would add that their fraud methods don't work either. My account was emptied in several fraud transactions and for the number of transaction and the amount you could see very clear that they were guessing my paypal balance. For example they started with $100 transations until they got insufficient balance error and then tried with $20, at the end they made 7 transactions of $1.

For paypal those were legitimate payments, even when they were made from a different country, which they could check but were too lazy to try. At the end they accepted that there were a fraud, but do you know how much they refund? 5 of the 7 transactions of $1.

briandear2• 15 years ago

Actually, the merchants ARE the customers. The people who buy using pay pal aren't the ones paying the fees. Without merchants accepting PayPal, then no one would use PayPal. I am transitioning my own company away from PayPal -- we're going to use chargify for recurring and braintree for everything else. PayPal can go to hell. They've been treating us like criminals because we are located in China, are incorporated in Nevada, have a DC phone number and a California bank account. They don't seem to understand global businesses. They're a step below retarded. We've had our accounts frozen multiple times and don't respond to emails. I hate PayPal and as soon as I can get their crap disintangled from our web application code, we're done with them. We get better customer device from China's Union Pay and that is a state owned black hole of a company. At least they respond to emails and don't lock our account everytime I log in from a hotel room on the road.

masklinn• 15 years ago

> Why trust a business to such a stagnant concern?

Because there is no alternative and they fucking know it.

Oh if you're in the US for the US you might be able (and want) to gamble on an other younger service, but in the wider world? It's a fucking wasteland, it's either Paypal or Big Bank Merchant Account, and those are no fun at all either.

My card expired (and was renewed) recently, I decided to stop using paypal (so I did not update the account to the new card), by the third christmas gift I tried to get I had to re-activate it, because either the gift in question wasn't available from anybody not using Paypal (etsy merchants, for instance) or because the CC gateway alternatives to paypal were unusable to plain broken.

etheric• 15 years ago

>>Because there is no alternative and they fucking know it.

Off the top of my head, https://payments.amazon.com/ is a great alternative. Not sure how the rates stack up, but I definitely trust Amazon more than I trust PayPal. I'm sure there are more alternatives available, I don't know why so many people insist on using PayPal. I think Amazon allows donations cause kickstarter.com uses it, and you don't necessarily get anything if you fund a project. I'm guessing the tricky part here is the "donations", but PayPal certainly has a poor customer satisfaction record.

morsch3• 15 years ago

I haven't seen the developer side of it, but from the consumer POV in Germany, it hardly looks like a wasteland. There are a couple of services like Moneybookers, ClickandBuy, which are very PayPal-like.

There are also a few services circumventing both money "escrow" (not sure if the term is applicable) and the credit card companies by interfacing directly with your bank deposits, either directly (using your PIN/TAN, which you have to give to them, which seems insane) or through cooperation with the banks.

Fewer people over here have credit cards, which has lead to a different landscape. For many things, simple bank transfers are a viable payment option, too, as they are typically very fast (with ever shortening legal limits to how long they may take).

fufulabs• 15 years ago

Xoom is the closest one to Paypal, the last time i checked

bigiain4• 15 years ago

>> Why trust a business to such a stagnant concern? >Because there is no alternative and they fucking know it.

That's a bit like saying "I had to get a pay day loan at 27% per week interest, I had no alternative and they fucking know it".

It probably means you're doing it wrong.

If the business you're trusting to Paypal can't get a Big Bank Merchant Account, maybe you need to work out why (and whether it's a very good reason... it might be that your great idea is exactly the sort of thing Paypal _needs_ to shut down quickly before lots of people lose their money.)

Etsy merchants (and eBay sellers) all happily use Paypal, because for the "put it in a box, ship it by FedEx" businesses have _way_ less "trouble" with Paypal than everybody else.

DTanner• 15 years ago

> Because there is no alternative and they fucking know it.

Hopefully in a few years time when it's matured, Bitcoin will be that alternative.

skeptical2• 15 years ago

As a long time paypal user I must say that I rarely see such a good online based service.

I phoned them multiple times and was always answered by well informed people that promptly provided me all the information I needed. Having lived in multiple countries and run paypal based businesses in more than one country simultaneously, I presented them with quite a few tricky questions which they always solved very quickly. It is also worth to mention that they were kind.

One thing I hate more and more is donations. Specially begging for donations. There's always something fishy with donations deal with big money. I would not be surprised if paypal would start to tighten donations policies which apparently seems to be happening. Donation buttons are epidemic anyway.

jberryman• 15 years ago

I'm mostly familiar with these things from the customer end, but what about google checkout? AFAIK it's international and similar to paypal. Anyway I absolutely love using it when it's an option.

Strom2• 15 years ago

Neither eBay or PayPal has evolved in any meaningful way in the last decade.

PayPal has been continually extending it's international merchant support. They may look like bloodsucking imbeciles in the US, but as an Estonian I am thankful for their support as nobody else cares.

shdon• 15 years ago

"On principle, on practicality, for the sake of all of our futures: just say no to PayPal."

I did just that, a few days ago. If I hadn't, the Regretsy story would've done it. http://www.shdon.com/blog/2011/12/06/bye-bye-paypal-you-suck

scott_s6• 15 years ago

Please read saurik's posts in this thread. He provides excellent, reasoned explanations for what is going on.

Personally, I think the conclusion should be: if you have an unusual business model or transactions that are not seller-to-buyer, don't use PayPal. It goes against their rules, and you will lose money and go through a lot of grief.

edit: wdewind as well.

jfruh• 15 years ago

Yikes, are you really only allowed to use "donate" buttons if you're a nonprofit? I use them as a "tip jar" on my blog. What's the options for for-profit when you're giving money for nothing in particular?

chucklarge• 15 years ago

This was probably a bit rhetorical but have you contacted Paypal to ask? Maybe they could help since some of the policy seems a bit grey. These bigger Paypal stories come up every 6 months or so. I have my own issues with them and certainly am no cheerleader but I do wonder if these groups get clarification before they start their campaigns. I would guess they might not have followed some policy/regulation correctly which gets them shutdown, especially if they are a large, worldly popular website that takes donations.

8plot4• 15 years ago

Bitcoin is an option.

DiabloD33• 15 years ago

Since HN removed public comment scoring, my up vote is not publicly indicative of the quality of this comment.

Thus, I would also like to echo this sentiment that Bitcoin is worth pursuing.

jerguismi• 15 years ago

Bitcoin people are pretty eager to donate, because they want to support the currency. I developed a very small web site (https://cryptedmemo.com/), and have already received almost 2BTC donations. The site isn't even used that much.

paulhauggis3• 15 years ago

I would never use Bitcoin. Mostly because the currency has a tendency to be so volatile. I've seen it worth $30 one day and $3 the next.

patrickyeon• 15 years ago

Elsewhere[1], saurik says he got some flak for using the "donate" button without being a non-profit. He suggests that changing the wording away from "donate" ("help out", "contribute to", "support" may all be ideas) solved the problem.

[1] http://news.ycombinator.com/item?id=3318170

sirclueless• 15 years ago

You should be fine. Paypal explicitly allows the donate button for tips and things, even for non-non-profits (is that a word?).

The root issue here as far as I can tell is that regretsy is promising some kind of action (in this case buying a "mystery gift" for an unknown family) and Paypal has no way to verify that this is actually happening.

You are fine as long as you don't explicitly promise something. There's no way to claim you are running a fraudulent service if the money is out of goodwill for no purpose. There will be very few chargebacks to Paypal that claim "I gave jfruh a tip for nothing in particular, and he used it for something in particular."

dgurney• 15 years ago

I have never seen a company more in need of competition. I realize its massive installed base makes it tough to approach, but isn't there somebody who can compete credibly? I have to think that there's enough user dissatisfaction that people would defect in droves, given a decent alternative.

thinkcomp2• 15 years ago

The regulatory situation has made it nearly impossible to start a payments company in the United States.

http://www.facecash.com/legal/brown.html

alain94040• 15 years ago

I'm sorry that you don't realize what you are trying to do is nearly equivalent to a Nigerian scam, but in the eyes of a payment company, it is. So cut Paypal some slack.

pyre2• 15 years ago

So:

1) You're going to tell me that those customer service interactions were perfectly normal?

2) You think that at the end of this the customer should be forced to sign something admitting wrong-doing? "I tried to take donations, but really it was all a scam and I'm a scammer. Paypal was right to freeze my account." Even when PayPal's own documentation was not straight-forward enough to let people know that they should not be doing what the OP was trying to do?

OoTheNigerian• 15 years ago

I was hoping I would go the full thread without the 'Nigerian Scam' jab. sigh

Anyway, you are also factually incorrect; we deal with princes and inheritance, not children toys. :)

dr_• 15 years ago

i use dwolla

andrewfelix• 15 years ago

I'm in Australia :(

rynop• 15 years ago

this is great for dwolla. I'm glad this made CNN. Paypal needs all the negative publicity they can get.

TheAmazingIdiot• 15 years ago

I'm going to be somewhat direct here.

I allege that what Paypal is doing here (holding funds over 10 days) is illegal.

In order to do what Paypal does in the USA, you need licensure. They point out that they are not a bank. Indeed, they aren't: in many states they are classified as a money transmitter. In 8 states, they have no license to operate.#1

And, Indiana also requires licensure for money transmission. IC 28-8-4-20 (a) A person may not engage in the business of money transmission without a license required by this chapter.

What is this money transmitter stuff? In essence, the law in all the locales I have checked (I have not gone through every one), indicate only a short holding period (5-15 days) and only allow holding of money of a known crime. So indeed what they do is absolutely fraudulent. In other words, if you have a patent troll corporation with many lawyers, target Paypal for their illegal behavior. #1 Source: https://www.paypal-media.com/state_licenses.cfm

thinkcomp2• 15 years ago

Indiana has an unwritten policy of only requiring licenses of companies with a physical presence in the state. Other states (Massachusetts, South Carolina, Montana and New Mexico) do not require licenses for domestic money transmission at all. The other three have likely determined that PayPal does not meet the criteria for licensure in that state.

PayPal may very well be exceeding the holding period threshold in some states, but someone would have to bring suit to push the issue.

jahewson2• 15 years ago

However, Regretsy are dealing with EU PayPal, which is regulated as a bank in Luxembourg. No idea what the rules are there...

taylorbuley• 15 years ago

The donate button thing -- that's got to be because of tax reasons, right?

wpietri• 15 years ago

Reasonable question, but no. Paypal's not responsible for that, and even if they were the "it's ok to use it for a sick cat" thing is clearly not about compliance with 501c3 regulations.

_wp3r• 15 years ago

http://i39.tinypic.com/25fizw1.png

Paypal wins still?

B1aZer• 15 years ago

Next time use bitcoins )

nclark• 15 years ago

uhm... don't use paypal?

Joakal• 15 years ago

Google does this too for the Donate button: http://checkout.google.com/support/sell/bin/answer.py?answer...

For a kicker, you MUST be based in USA otherwise according to their terms, they'll hold the money like PayPal does.

saurik13• 15 years ago

"Donate" has a very specific meaning, at least in the US, and comes with numerous accounting connotations, including the ability to write off the expense. As many people don't realize that "charitable donations" do /not/ include "donations" to purchase toys for children, it is misleading to use the term "donation" in this circumstance.

Meanwhile, often the person /accepting/ the donations doesn't understand this either. You cannot, for example, accept a $5 "donation" and then send someone a $5 product back to them: that is a "sale", not a "donation". You do not "donate" to Ikea in exchange for a chair: you "pay" them $5 for it.

In this case, this person obviously doesn't get it. "Why? These are my customers!" <- Right, which is why they are not "donating". These "customers" are buying toys, which are then being sent to other people on their behalf. These are /purchases/, like any other. This seller even goes so far as to state they are operating "just like any other retailer would".

At which point we ask the killer question: are they collecting sales tax? This is where the theoretical issues suddenly run right into the brick wall of reality, as sites that believe they are accepting "donations" on behalf of charitable work, such as handing out toys to children, put everyone in a position where they fail to realize that they are operating an online retail store where the receipts need to be reported (to the IRS), sales tax needs to be collected (for sales made to people in the same state), and the people buying the gifts can /not/ write off the expense.

PayPal is therefore very right to be wary of these situations, and often contacts people making the claim "only a nonprofit can use the Donate button", as the PayPal representative stated in this e-mail. I know this, as they contacted me once: I had a button "Donate to saurik.com" on the top of my website, which I ended up changing to "Contribute money to saurik.com".

That said, I am actually not 100% certain that that is their official "for everyone" rule. This author was correct when they said that "worthy causes" is mentioned in the PayPal PDF [1] on this feature: a more full quote being "for your nonprofit or worthy cause"; that said, the PDF also claims that when you sign up for your PayPal account you should do so "selecting “nonprofit” as the type".

(edit: Reading some more context of the story from Regretsy, including more responses from PayPal, I think that what PayPal means by "worthy cause" may actually be those "on behalf of verified non-profit organizations", not that that is made clear at all in that PDF.)

Their website [2], meanwhile, only ever seems to talk about nonprofits, but goes into detail regarding confirming non-profit status only for obtaining a discount on processing fees. I can certainly see that this is confusing, and I also believe I see a lot of websites around that /do/ use "Donate" in weird ways; certainly, if they really cared to limit it to nonprofits, they could actually enforce your account type /was/ nonprofit before letting you use it.

So, I personally believe that they simply contact vendors who seem to be running a for-profit sales business (even one that is losing money or breaking even "for the children") using "donate", rather than people who are simply using "donate" "without being a non-profit". How do they figure that out, you ask? My guess is that users are flagging the transactions as fraudulent, or complaining to PayPal using the dispute transaction feature (which some PayPal users treat pretty flippantly), using wording that indicates that they were buying something.

(For the record: I'm pretty certain that's what happened to me. I /also/ run a retail product called Cydia, which accepts payments through a separate PayPal account for SaurikIT (my company). People can contribute money to the cause I represent (open access to devices), or purchase things from Cydia. However, some users would just send my personal account (which I use for contributions to my work) $1.00, either by sendmoney or /my "Donate" button/, and then go on to say that they paid me $1 for some product in Cydia and that I didn't send it to them.)

In the end? While I think PayPal needs to be clearer on some things, I do not actually blame them for their reaction here. This setup seems "sketchy", was probably not handling the taxes on the sales correctly, was almost certainly handling the "extra money sent to the family" part incorrectly, and in the end went over the top with this emotional appeal (seriously? I have to have crying children surrounding this text?) rather than looking at this as an intellectual debate about PayPal's policies here (which might be interesting, and might cause everyone, including them, to learn something).

[1] https://www.paypalobjects.com/en_US/pdf/PP_Online_Donations....

[2] https://merchant.paypal.com/us/cgi-bin/?cmd=_render-content&...

asto3• 15 years ago

The money donated is used by the non-profit to purchase products that are then given away to needy kids. This is donation whichever way you look at it.

Amazon will let you do this but people generally specify who they want the product to go to which makes it a gift purchased for friends/family. So it qualifies as a purchase there.

saurik13• 15 years ago

"used by the non-profit" <- I'm sorry, maybe I'm confused, but as far as I know there are no "non-profits" involved here; which entity are you speaking of here?

wdewind9• 15 years ago

PayPal does not let you ship items to addresses that are not the billing address. General policy, in their TOS, no surprises. OP is also not a registered non profit, though the real issue doesn't really have anything to do with the charitable nature of it.

Dylan16807• 15 years ago

>In this case, this person obviously doesn't get it. "Why? These are my customers!" <- Right, which is why they are not "donating".

You seem to be confusing different things. After being unable to use donations, they tried to use sales. And paypal said no. That's the context of what you're quoting, after donations had been given up on.

saurik13• 15 years ago

This all seems to have happened during the course of the same conversation, and reading more of their blog history I don't see them saying that they then actually used a Buy Now button for any period of time.

Regardless, once the conversation started going farther in that direction, the issue did change (and I did not touch on that part of the problem); specifically, it became entirely surrounding "purchasing products sent to a different shipping address than the one the buyer specified during checkout", which is apparently against PayPal's terms of service.

(Note: I have not personally verified that it is against PayPal's terms of service, but I have no reason not to believe the employee of Etsy, a company that relies quite strongly on PayPal and certainly has gone down this road numerous times with them while determining what features they can offer to customers, who posted elsewhere in this thread [1].)

[1] http://news.ycombinator.com/item?id=3318223

darklajid• 15 years ago

Are you sure about that?

Because I think the sarik is talking about the whole idea itself, which according to what I understand from this complaint is

- 'Donate' money for the 'Give kids a random present'

- Blog author invests time to handle the flow of money, orders toys and selects/distributes to kids

What saurik is saying is that the first step, 'Donate amount of $currency to send a random toy of roughly the same value to a 3rd party' is pretty much a sale. The author itself is comparing his idea at one point with Amazon, purchasing gifts for someone else.

I'm sympathetic here and don't like the outcome, but I think your comment is incorrect: Saurik didn't confuse different things here. We might argue about whether these 'donations' should be considered sales, but - you misunderstood the argument, I think.

einhverfr14• 15 years ago

I don't see how Paypal is liable for taxes collected, so I don't see how that should concern them.

saurik13• 15 years ago

PayPal is not in a position to be running money for someone else's "dirty books" (which is a rather strongly negative term, but you have to realize that that is how PayPal is going to be seeing this specific pseudo-charity, and is the mental framework from which they are going to be dealing with this likely hostile person on the phone), and to the extent to which it "shouldn't concern them" (and it starts to, such as with 1099-K) it is a fair assumption that companies that are operating with "dirty books" are a "high-risk transaction" (one fraught with disputes, chargebacks, and investigations), something which PayPal simply refuses to traffic in (likely, as their entire concept of letting random people keep money and move it around is already "high-risk" enough ;P).

megablast2• 15 years ago

Funny you should mention Ikea, since through its complicated accounting setup, it is the largest charity in the world.

http://www.mentalfloss.com/blogs/archives/14675

sk5t4• 15 years ago

What world do you live in, where "donate" necessarily implies some kind of accounting whargarbl? Unless there is some more complicated scheme afoot here that I have failed to comprehend, it appears the Regretsy folks were collecting money, 100% of which would be used for the benefit of needy people, without claiming to be a 501(c)(3) or anything of the like. Still sounds like a donation to a worthy cause.

Only when PP blocked their use of the "Donate" button--which would have been acceptable for helping a sick cat??--did Regretsy resort to "reselling" already-purchased toys to recoup costs and continue the program. But again I cannot conceive of any reason that use tax would be due here...

saurik13• 15 years ago

In the US you cannot run that company: if you accept money in exchange for goods (or even sometimes services), and are not a registered non-profit, you need to pay sales taxes on the sales, must declare any residual as income, and the people giving you the money cannot claim it as a write off.

Regretsy is in the EU, not the US, but I don't believe that changes the point. In the EU, everything that is traded, whether it be a good or a service, is subject to a "value added tax". (Note: this applies to you even if you are not yourself living in the EU; if you sell products to EU customers online, you must collect and remit VAT if you are above their threshold.)

These taxes can be quite high: up to 25% of the receipt. You are only responsible for the "value added" (so you subtract your costs), but the way you subtract your costs is very similar to expense structure in the US: the cost you declare has to be to another VAT-registered organization, and you need to keep whatever receipts and documentation is required to defend the costs later.

I am simply having a very difficult time seeing how this specific setup was, in the eyes of the law, any different from Ikea selling chairs: they were selling products, and selling products is a highly regulated business with a large number of taxes that have to be considered. You cannot just throw up a website and willy-nilly throw money around.

kami8845• 15 years ago

Thank you for this well-written and educated response.

neutronicus• 15 years ago

I know there's an up arrow for this, but I feel like your contribution to this thread has been excellent and wanted to thank you. I'll be throwing a couple bucks Cydia's way for sure.

morganw• 15 years ago

> they are not "donating". These "customers" are buying toys, which are then being sent to other people on their behalf.

It was a mistake for Regretsy to phrase it that way and it devolved into a mess from there. It started as a real donation to pay for the "cause" of giving toys to kids. Paypal's first complaint was that the recipient of the donations (the Paypal account holder, not the kids) was not a non-profit, yet their policies don't state this requirement.

lawnchair_larry• 15 years ago

Actually, you are wrong about the "specific meaning of donate" according to numerous guidelines on the Paypal website.

https://thegreengeeks.wordpress.com/2011/12/06/why-paypal-is...

Not my blog, and I apologize for the embedded rant in there, but the case is thoroughly presented and debunks this whole "donate must be a charity" misconception, using Paypal's own documents.

Edit: direct link to paypal policy containing the following sentence:

https://www.paypal.com/helpcenter/main.jsp;?locale=en_US&...

"Donations that are not associated with a charity or nonprofit organization are not subject to these requirements, but all donation transactions are subject to review and must comply with all of PayPal’s Acceptable Use Policies"

https://merchant.paypal.com/us/cgi-bin/?cmd=_render-content&...

"If you are not a 501(c)(3), you can still accept donations with our standard pricing."

I also disagree with your position that "donate" implies that it can be written off (or that it implies anything tax-related, for that matter). I don't think many people assume that. Anyone who has written off a donation knows that they can only do so with an associated donation receipt. This is why many charities often specifically note when a donation is tax deductible - saying, for example, donations in excess of $20 will be given a donation receipt.

If a layperson is not familiar with the difference, they aren't writing this off. Additionally, there are several types of organizations for which donations cannot be written off.

amorphid• 15 years ago

It looks like PayPal's site for creating a donatiom button makes it really easy to get yourself into trouble...

https://www.paypal.com/us/cgi-bin/?cmd=_donate-intro-outside

I don't see anything on that page to suggest you have to be a nonprofit or somehow a worthy cause. They optimize their web page for encouraging people to create a donation button and then provide you with a shitty experience on the back-end if you make a mistake. They aren't trying very hard to keep you from hurting yourself. This is why government creates consumer protection laws, so maybe PayPal needs a big warning label next next the link encouraging you to create a donation button.

muppetman• 15 years ago

I am SO sick to death of "I used Paypal, Paypal screwed me over" posts. The first few times when it happened and no one was aware of how they operated, sure, I felt bad for the person/people.

Now I just think "The definition of insanity..."

I guess I'm just an elitist prick though?

callmeed• 15 years ago

I hope Square buys Stripe, figures out the international bits, adds some features, and then starts eating away at PayPal's market share.

D_Drake• 15 years ago

Never before have I read an article and been greeted by the mental image of a vein bursting in my brain, the blood spewing out of my eye sockets, forming itself into an axe, and traveling through a magic portal to mutilate a company's board of directors.

dvdkhlng2• 15 years ago

Too much is too much. Closing my PP account. So far I haven't seen an online shop that doesn't have alternative payment options other than PP. In Germany (Europe?) we have ClickAndBuy [1], which works great so far. Buyer protection is usually sold separately via Trusted Shops [2] (but has to be payed for by the seller). This also eliminates the various COI arising from the payment processor also trying to police account owners. And I can choose to not add additional buyer protection costs for shops that I trust in.

[1] http://clickandbuy.com

[2] http://www.trustedshops.com

severance• 15 years ago

http://bitcoin.org/

antninja• 15 years ago

There's a script in this blog page that makes Firefox freeze and crash.

dvdkhlng2• 15 years ago

You mean there's something in Firefox that makes it freeze and crash on a script in this blog page?

InclinedPlane2• 15 years ago

No sympathy here.

Abusing "donations" on paypal to avoid paying fees and taxes is not a good business practice. Either own up to the fact that you are indeed selling something or incorporate as an actual non-profit, neither is particularly onerous.

URSpider94• 15 years ago

At the end of the day, Paypal is a slave to the credit card associations. To that end, whenever they find something out-of-the-ordinary, they have no choice but to act. The sad reality is, they really don't have any latitude in cases like this, if they want to prove to their credit card overlords that they are tough on fraud.

For whatever reason, it seems that they'd rather be known for having terrible customer service than own up to the fact that they are hog-tied as to their policies on what kinds of transactions they can process.

JonoW• 15 years ago

I'd love to know more about the legalities of a company (that isn't a bank) withholding funds for months. PayPal must be making a pretty profit on the interest accrueing on those accounts.

mrkmcknz• 15 years ago

Looking at the detailed arguments in this thread, my only advice is to use a little common sense. Or does that not exist anymore?

rlivsey• 15 years ago

After using PayPal on a number of projects over the years (both successfully and painfully unsuccessfully) I've come to the conclusion that PayPal is fine if what you're doing is completely standard.

Once you start doing something that could be interpreted as even slightly non-standard then it's more trouble than it's worth and the odds are that PayPal aren't going to play ball.

scottshea• 15 years ago

I am so glad I turned down that job with Paypal

jdietrich• 15 years ago

A little experiment: Apply for a merchant account, saying that you're not a registered nonprofit, but intend to take donations to buy gifts for kids. I just phoned my bank and they literally laughed in my face.

People who have customer service nightmares with Paypal are generally doing something that no other payment processor would touch. I hear complaints from people who have been accepting pre-orders of a game or pre-registration for a conference, which is obviously a massive risk for a payment processor. If you found a merchant account provider willing to take such risky business, they'd demand a huge deposit and charge well above the odds.

Paypal provide an absolutely exceptional service in allowing pretty much anyone to accept card payments without a great deal of fuss. The flipside of this is that they have to deal with risky accounts retroactively, which means they have little choice but to freeze accounts that set off their fraud detection algoritms. If you prefer to know where you stand, apply for a merchant account - in most of the world, that will involve a long, expensive vetting process.

People continue to use Paypal because for many use cases, there aren't any better alternatives. This isn't because Paypal or the card companies are abusing monopoly power, but because payment processing is hard and fraud is expensive.

brown9-2• 15 years ago

So just to be clear, when the Paypal rep says "We know what you are trying to do and we aren't going to let you do it", what do they think the scam is?

That the site would accept "donations" for a fraudulent reason?

scott_s6• 15 years ago

Yes.

Cyph0n• 15 years ago

AlertPay is a good alternative. Fees are a bit high, but there is no such thing as a "limited" account, unless you send/receive fraudulent funds of course.

The problem is that AlertPay is not accepted by many online services. Once that is solved, I believe that it could probably compete with PayPal.

whyme• 15 years ago

Out curiosity, why wouldn't PayPal just put categorical warnings on the payment page that allows merchants & buyers to assess the risk themselves?

So if a merchant understands these relative risks, they can opt in to a high risk warning category, in order to make sure accounts don't become locked, and buyers can then fully understand what they're getting into via the warnings.

I mean really this is all about liability right...or maybe is it that I'm expecting too much...?

dangrossman9• 15 years ago

All the warnings in the world wouldn't reduce the liability one bit. The liability is that the buyers (donors) are unhappy for any reason and charge back the payments. If it turns out the fundraiser was a scam and that's outted publicly, all those donors may well do just that.

The OP's story says they got "thousands of $2 payments". Let's say 3000. PayPal could, potentially, see $6000 in chargebacks, $900 in transaction fees, and $45000 ($15 * 3000) in chargeback fees assessed by the card-issuers.

If the fundraiser disappears or doesn't have a spare $45000 sitting around PayPal is on the hook for that.

They're not going to file 3000 court cases to recover it, no matter what warnings were on the site.

wbhart• 15 years ago

I wonder if PayPal has misunderstood what Regretsy is doing.

For example, suppose PayPal think that Regretsy is buying cheap toys at cost, marking them up for profit, adding the cost of shipping, then selling them to customers as part of their ordinary business model (perhaps not even paying sales tax on them), but of course agreeing to send them to poor kids instead of the people paying the money.

PayPal would have every right to block such transactions, and I'd expect it. It wouldn't be charitable on the part of Regretsy nor would it be donation to a worthy cause, but a partial "donation" to Regretsy, a for-profit company. It would be ordinary profit making on the part of Regretsy in the guise of charity work!

I think Regretsy should just clarify with PayPal what it is they are actually doing. If Regretsy are honestly doing this for needy kids and not for their own profit, then I cannot see how it would be a win for PayPal to not accommodate this in some way.

scott_s6• 15 years ago

I think PayPal does understand what Regretsy claims to do, and the problem is that what they claim to do goes against their policies. PayPal does not allow that kind of transaction because it's too difficult to prove that it's not fraud. There are detailed explanations of this elsewhere in the thread.

jrabone• 15 years ago

Anecdotal, but anyway...

Earlier this year, Paypal notified me that they required more information about my personal account - namely confirmation that it wasn't a business in disguise. Due to my mistranslating from American English to British English, I accidentally declared that I was a charity (non-profit of course has a specific meaning), and Paypal promptly froze my personal account.

It took one phone call to the UK helpdesk, and about 20 minutes to get this fixed, and my experience with their customer support was fine. I screwed up, they were polite and helpful, no problems.

What WOULD help is if their UI translated their terms for the benefit of non-US customers (if they'd said "charity" instead of "non-profit" I'd never have chosen that option) and gave you an obvious way to say "I am not a business" (if they'd had that I wouldn't have been on that page in the first place), but I can't fault their customer support.

sp3323• 15 years ago

This is an amazing, in-depth blog post that explores all the relevant policies and web pages regarding the use of the donate button. https://thegreengeeks.wordpress.com/2011/12/06/why-paypal-is... Still nothing! No explanation anywhere on the site that might explain this behavior.

joshuap• 15 years ago

Someone should start an anti-paypal campaign that recreates the paypal buttons, except they have a big red X through them, and link to a collected list of grievances. I'd put one on my site... I dealt with all this garbage in 2004 and haven't used them as a seller since.

Tangurena• 15 years ago

Paypal wants to be a bank without being regulated as a bank. If they were regulated, this sort of fiasco would get their charter revoked.

In addition, the business courses I'm taking all (in the text books and case studies used in classes) point to how eBay is trying to transition away from the auction model and turn into fix-price sales as some sort of discount Amazon Marketplace. Making life miserable for smaller retailers and auctioners is part of this goal.

kmfrk• 15 years ago

Looks like they settled it: http://news.ycombinator.com/item?id=3320154.

radimm• 15 years ago

Wonder what percentage of users are facing such an issues with PayPal. As somebody who's just in the middle of setting up payment solution (UK) with PayPal, such a stories are not making it easy to justify the decision to go this way.

In my eyes, PayPal is just another corporation, with all of its bureaucracy, both processes-wise and the way how they handle their customer care.

My bank is not making it easier to get started (otherwise I would have merchant account), so why would I expect PayPal would handle edge cases otherwise?

EDIT: jdietrich already made this point http://news.ycombinator.com/item?id=3319045

ukdm• 15 years ago

PayPal has unlocked the account and made a donation to Regretsy

https://www.thepaypalblog.com/2011/12/regretsy-issue-resolut...

loceng• 15 years ago

PayPal is just as likely to hold funds for 6+ months if you're not selling a product if using "Buy Now."

More Paypal nonsense

Related Stories