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The Almighty Buck News

PayPal Preparing To Address Frozen Funds Policy 175

Posted by samzenpus
from the papers-please dept.
First time accepted submitter skywire writes "After years of forcing innocent customers to navigate a Kafkaesque process to unfreeze their funds, PayPal has announced that they are preparing major changes to alleviate the pain. From the article: 'The company routinely freezes funds for 21 days if it thinks there's a fraud risk, and its terms give it the right to extend the freeze for up to 180 days. To get access to their money, users are often asked to provide the kind of documentation that a product seller would have, like several months' worth of sales records. But if you're running a fundraiser or selling tickets to an upcoming conference, you don't have that paperwork. Even for those with extensive paper trails, the appeals process can take months to resolve. The Web is filled with enraged blog posts, websites like paypalsucks.com, and a Tumblr called "Conferences Burned by PayPal."'"
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PayPal Preparing To Address Frozen Funds Policy

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  • Too Late (Score:5, Insightful)

    by QuantumBeep (748940) on Monday January 21, 2013 @06:25PM (#42651587)

    After over ten years of destroying businesses and hurting people while hiding behind a blank gray wall of "policy", Paypal are kidding themselves if they think that they can ever recover the goodwill that they've burned.

    • Re:Too Late (Score:2, Insightful)

      by Tanuki64 (989726) on Monday January 21, 2013 @06:30PM (#42651637)

      You are kidding if you disregard the stupidity of the average sheeple.

    • Re:Too Late (Score:5, Insightful)

      by alexo (9335) on Monday January 21, 2013 @06:33PM (#42651663) Journal

      You don't need much "goodwill" when you are the biggest player in the game and have a captive user base.

      • by Sussurros (2457406) on Monday January 21, 2013 @06:51PM (#42651813)
        Emphasis on the captive user base when comes to eBay. I doubt that anything will come of these changes as long PayPal and eBay are the same company and they have no widely recognised competition.

        Does anyone know of any effective competition to the eBay/PayPal behemoth of faceless people in gray suits?
        • Re:Too Late (Score:5, Insightful)

          by afidel (530433) on Monday January 21, 2013 @07:13PM (#42651981)

          For commercial seller Amazon seems to be the vastly superior service. I know I only look at ebay if there's none listed on Amazon or none at what I consider a reasonable price. As far as payment processors for things like donations there's Google Wallet, Isis, and Amazon payments.

          • by tepples (727027) <tepples&gmail,com> on Monday January 21, 2013 @07:41PM (#42652233) Homepage Journal

            For commercial seller Amazon seems to be the vastly superior service.

            This is true for commercial sellers. But for sellers who don't pay $40 per month for a store, Amazon hits them with a $1 per item commission in addition to the final value fee. And items without a UPC/EAN or ISBN can't be sold at all.

          • Re:Too Late (Score:5, Interesting)

            by postbigbang (761081) on Monday January 21, 2013 @07:43PM (#42652245)

            None of these has really garnered much marketshare, despite Paypal's evils. Although an interesting payments model, its customer service is an oxymoron. When you've got auction funds tied up from eBay, or there's a question to your business model, they shoot their clientele first, look for blood, and allow questions to be asked later.

            If the US banking laws were real (I know, another oxymoron), Paypal would have the teeth of a hundred US DAs in their leg, gnawing viciously. But they're seemingly exempt, as are all the big financial houses.

            • by Sussurros (2457406) on Monday January 21, 2013 @07:55PM (#42652339)
              True dat!

              Every contested PayPal transaction I've ever seen has been settled in the buyer's favour. No appeals allowed. Currently my personal balance is running my way but the injustice of it chafes.
            • by AmiMoJo (196126) * <mojo@world3AAA.net minus threevowels> on Tuesday January 22, 2013 @09:24AM (#42655965) Homepage

              PayPal is in an impossible situation. When I sell anything on eBay as soon as payment arrives I withdraw it to my bank account, and only ship the item after it appears in my balance (typically takes one day). Obviously I don't trust PayPal because if there is any sort of problem the first thing they do is freeze your money.

              If the seller is a fraudster and the money has already been withdrawn then the buyer will lose out. PayPal can't get the money back now. That is why they introduced a delay during which the funds are not available for withdrawal. That is unacceptable to me so if it ever happens they item won't get sent and the transaction will have to be cancelled. The law in the UK is quite clear - you pay, then you get your item. Until you pay it isn't yours.

              To make matters worse PayPal only allows claims to be made for 45 days. If your item ships from China more than half of that could be gone before it even arrives. Also, the law states you get a two year warranty on everything sold commercially in the EU. PayPal isn't interested in upholding your legal rights though.

              So basically PayPal's "protection" is worthless for both the seller and the buyer, and can't be improved unless PayPal will willing to be a real middle-man and absorb the losses due to fraud itself.

              • by Anon-Admin (443764) on Tuesday January 22, 2013 @10:52AM (#42656645) Homepage Journal

                From experience, If you withdraw the money into your bank account and PayPal freezes your account they will put up to 3 months of withdraws back from your bank account.

                That information you gave them to deposit the money is enough to go both ways. CC Merchant accounts do the same thing. The only way around this is to do PayPal --> Deposit Bank Account --> Checking account and make sure your deposit account is kept at a $0 balance.

        • by Ksevio (865461) on Monday January 21, 2013 @11:38PM (#42653627) Homepage

          the eBay/PayPal behemoth of faceless people in gray suits?

          Just as a side note - having visited the eBay PayPal campus, it's actually a very colorful location full of cheerful people.

          • by 1s44c (552956) on Tuesday January 22, 2013 @04:34PM (#42660785)

            the eBay/PayPal behemoth of faceless people in gray suits?

            Just as a side note - having visited the eBay PayPal campus, it's actually a very colorful location full of cheerful people.

            You might be cheerful too if you figured out how to steal money legally.

      • by Zemran (3101) on Monday January 21, 2013 @10:58PM (#42653417) Homepage Journal

        The competition can be impossible to work with in some countries. I am currently in Thailand where the banks are good. OKPay demand that I jump through certain hoops to verify, fine. So I let them pay some money into my account but it arrives without any code that they need to verify so I cannot verify. OKPay say that I need to find that code and I need to find out whom on the route from wherever to Thailand lost the code. I cannot, so I try the credit card verification. They deduct a small amount from my credit card and I have to say how much. They want to know exactly how much in Euro but my statement is in Baht and the rates vary each day. I have no idea how much the amount was in Euro and neither do my bank. So they ask for some paperwork to verify but they want paperwork that is in English which is not going to happen here as this is Thailand where they speak Thai. All my official letters are in Thai which is written in what looks like dead worms.

        Paypal, who have frozen my money before and whom I hate, allow me to say how much was deducted in Baht and the codes appear on my statements. Paypal has its faults but it works better.

      • by Dan667 (564390) on Monday January 21, 2013 @11:10PM (#42653493)
        I stopped using paypal and ebay years ago, maybe even a decade, because of these predatory practices. And I am not alone.
      • by brunes69 (86786) <slashdot AT keirstead DOT org> on Tuesday January 22, 2013 @08:03AM (#42655581) Homepage

        I don't recall having to use Paypal when I sold my last 5 things from around the house on Amazon.

        Experienced sellers are leaving eBay in droves. We're tired of paying 12%-15% total to sell our items when we can do it on Amazon for less than 1/2 that commission and reach just as large an audience. eBay needs to seriously change the way it does business because Amazon is going to drive them into irrelevance if they don't clean up their act. It's really a shame because they used to be a market leader and innovator, nowadays the only way they innovate is how to charge you more money.

    • Re:Too Late (Score:4, Interesting)

      by alen (225700) on Monday January 21, 2013 @06:40PM (#42651727)

      Credit card policies are not very different

      Most of the sellers I read about we're just dumb

      • Re:Too Late (Score:5, Insightful)

        by Hognoxious (631665) on Monday January 21, 2013 @06:55PM (#42651829) Homepage Journal

        we're just dumb

        Speak for yourself, but don't count me in.

      • Re:Too Late (Score:5, Insightful)

        by tlhIngan (30335) <slashdot AT worf DOT net> on Monday January 21, 2013 @06:57PM (#42651851)

        Credit card policies are not very different

        Most of the sellers I read about we're just dumb

        That's the problem, really.

        Merchant accounts aren't too different from what Paypal does in the end - except retailers are often forbidden by contracts to speak about it.

        The other thing is, the average Joe cannot get a merchant account, so accepting credit cards is impossible (they often have minimum transactions per month of minimum amount to qualify, else you get the high rate account). Paypal does, however, let the average Joe do that, so if you're running a small shop and can't qualify, Paypal is pretty much your only option.

        Especially if you want to sell online (imagine how online auctions go if you can't pay via credit card).

        The problem is, most sellers just assume that it's like a cash account and Paypal will hide al lthe fees and crap from them. But given a chargeback can occur easily 6 months from the transaction date, and by default the credit cards refund the money unless the seller can prove the transaction (at which point it's paid back), well, most people are in for a surprise.

        I suppose one could take cash or cheques sent through the mail. I'm sure that's viable in this day and age of buying stuff and getting it the next day.

      • Re:Too Late (Score:5, Interesting)

        by AK Marc (707885) on Monday January 21, 2013 @06:59PM (#42651859)
        But the credit card companies don't abuse their policy. Most are banks, and have some regulation. PayPal is a non-bank banking institution, and that's why they are evil (well, one reason of many).
        • by raymorris (2726007) on Monday January 21, 2013 @07:24PM (#42652075)
          Indeed. With CC merchant accounts they don't automatically freeze an account full of funds based on automated heuristics. It's possible they do it rarely, but working closely with thousands of businesses, and having my own merchant accounts, I've never heard of it happening. I've had my Paypal account frozen before and I know at least a dozen other people who have.

          The chargeback process is still slanted toward the buyer, but the buyer has to fill out and mail or fax paperwork, not just click a button on a web page. That reduces BS chargebacks. More importantly, that chargeback affects only the one transaction; they don't freeze thousands of dollars of unrelated funds. CC processors only freeze the account after MANY complaints from buyers. Partly, that's because they do the anti-fraud work upfront, when you apply to open the account. That takes a couple of weeks.
          • by AK Marc (707885) on Monday January 21, 2013 @09:45PM (#42653007)

            Indeed. With CC merchant accounts they don't automatically freeze an account full of funds based on automated heuristics. It's possible they do it rarely, but working closely with thousands of businesses, and having my own merchant accounts, I've never heard of it happening. I've had my Paypal account frozen before and I know at least a dozen other people who have.

            You are obviously a merchant, not buyer, but buyer accounts are frozen quite often by automated heuristics. An international traveler would be silly to rely on a single credit card for a trip without at least looking up the local toll-free number for when the "unusual" activity locks their card (the consumer equivalent of freezing an account).

            The chargeback process is still slanted toward the buyer, but the buyer has to fill out and mail or fax paperwork, not just click a button on a web page.

            It's how it should be. I had an argument with a seller on eBay once. He said he sent it. I never got it. I did a chargeback. He complained that I didn't buy insurance.

            Legally, the transaction is not completed until the item is delivered. The item was never delivered. I was due my money back. My options are to go to court and prove I never got it, or just do a chargeback. Chargeback done. Insurance protects me, delivery receipt protects him. I don't buy insurance. If you can't pack it right, you get a chargeback. If you don't ship it, you get a chargeback. And no, I don't pay your insurance for you (like mortgage insurance, where it's default insurance you pay that covers the bank, not you). If you don't want to buy insurance to cover yourself, then you deserve the chargeback. Most eBay sellers take that into account. $0.01 items with $15 delivery weren't uncommon for a while, but I heard eBay was cracking down on it, but I haven't been back in a while to see.

          • by girlinatrainingbra (2738457) on Tuesday January 22, 2013 @12:34AM (#42653945)
            Well, when there is the weight of the government squeaking about, both Mastercard/Mastercharge and Visa/Bankamericard will do something "without even being asked": they cut off all transaction processing for wikileaks.
            .
            This was combined with a response from the financial industry world-wide [wikipedia.org] which was the equivalent of a global financial blockade. How do you like them apples?
        • by fulldecent (598482) on Tuesday January 22, 2013 @10:43AM (#42656549) Homepage

          The only reason PayPal exists is because of tie-in / lack of other choices on eBay, which I thought was basically illegal in the US.

      • by stephanruby (542433) on Monday January 21, 2013 @07:50PM (#42652299)

        Most of the sellers I read about we're just dumb

        Here is the first one I read.

        http://conferencesburnedbypaypal.tumblr.com/post/9341558088/a-major-open-source-conference-in-paris [tumblr.com]

        That guy doesn't seem very dumb to me.

        Credit card policies are not very different

        Again, citing the example I linked above, "six months" seems to be going above and beyond what most credit card policies try to enforce.

        At least, I would never expect eventbrite.com to take that long to transfer funds (obviously) needed for a conference.

    • by Quirkz (1206400) <ross@nospAm.quirkz.com> on Monday January 21, 2013 @07:13PM (#42651983) Homepage
      I ran a business using PayPal almost exclusively for 4 years without any real problem. I tried to branch out to other options, but most weren't worth the time, and the only other likely alternative, Amazon, turned out to be as uncommunicative and belligerent as PayPal is rumored to be. They didn't lock any funds at least, just disabled the account, but they were a real pain about it.
      • by Sussurros (2457406) on Monday January 21, 2013 @08:13PM (#42652453)
        I tried to open an Amazon account a couple of years ago and belligerent is the only way I could describe them. I never did open an account them. Is it worth the effort to try? It seems very US-centric even once you pass through their positive/negative dichotomy they call an application.
        • by Quirkz (1206400) <ross@nospAm.quirkz.com> on Monday January 21, 2013 @09:12PM (#42652829) Homepage
          I'm in the US, so can't say what they're like to the outside. Other than this badly failed attempt to deal with them on a business level, I do really like them. I live in a rural area and buy things from them weekly, and use Prime both for the fast free shipping and video streaming. As a customer I like them (and can't find any nearly adequate substitute). But I won't try to run a business with anything they offer in that respect.
    • by fliptout (9217) on Monday January 21, 2013 @08:27PM (#42652545) Homepage

      No kidding. I've stopped using ebay too. Haven't missed it at all.

    • by Twinbee (767046) on Monday January 21, 2013 @09:59PM (#42653095) Homepage
      In the same way good companies can turn bad, bad can turn good. Perhaps because managers and employees keep changing, or maybe it's because they're forced to provide better service due to competition from rivals (I bet Apple et al. would still force DRMed mp3s upon their users if say Amazon MP3 didn't initiate the idea).
    • by 93 Escort Wagon (326346) on Monday January 21, 2013 @10:07PM (#42653145)

      After over ten years of destroying businesses and hurting people while hiding behind a blank gray wall of "policy", Paypal are kidding themselves if they think that they can ever recover the goodwill that they've burned.

      Yeah, like everyone else I opened a Paypal account about a decade ago - but they quickly put me off with some bizarre policies, plus their incessant attempts to make me tie in my checking account to their service for no good reason whatsoever (okay, it would've benefited THEM, but not me).

      Maybe they've changed, I don't know; but I have made a point for the past decade of avoiding them and not doing business with anyone who doesn't offer a non-Paypal payment option. There's pretty much nothing they could do that'd draw me back in.

    • by zenetik (750376) on Tuesday January 22, 2013 @11:33AM (#42657217)

      After over ten years of destroying businesses and hurting people while hiding behind a blank gray wall of "policy", Paypal are kidding themselves if they think that they can ever recover the goodwill that they've burned.

      Well said! But PayPal also has some stiff competition from better services with vastly superior reputations such as Dwolla, Stripe, Amazon payments, Google Checkout, Square, etc.

  • Square (Score:5, Informative)

    by TechyImmigrant (175943) on Monday January 21, 2013 @06:37PM (#42651695) Journal

    Maybe they're feeling the heat of competition from square and feel the need to do something to stop the exodus.

    Our little business finds square a lot easier to deal with.

  • invisible hand (Score:3, Interesting)

    by Anonymous Coward on Monday January 21, 2013 @06:38PM (#42651699)

    It's pretty mind-boggling that nobody has come along and eaten Paypal's lunch yet. For all the internet-era services (most?) that based their business model on merely having the most active accounts and got burned, there are a couple for which that strategy seems to be a winner. Facebook is another one. There's no reason to use either of these services other than the fact that everyone else does - and in fact, there are lots of reasons not to (i.e. the services themselves are ass, and are run in a way that's at times abusive to their userbase).

    And yet, despite the fact that there's nothing preventing competitors from springing up (unlike, say, Ticketmaster - which actively uses payola to monopolize the market) - and despite the fact that some with very deep pockets (Google) have tried - Paypal & Facebook still dominate.

    Maybe it's luck? At some point someone will set up a competing service that just happens to ensnare the particular, unmarked, and unrelated 5% group of "tastemakers" who are sufficient to catalyze a shift away to a new service?

    • by zzyzyx (1382375) on Tuesday January 22, 2013 @12:29AM (#42653925)

      Many have tried but there is an extremely high barrier to entry. Nobody is interested in an account with a service that no seller takes, and sellers see no point in setting up a service that has no users. There is also the added complexity, and reluctance to give your credit card details to multiple companies.

  • by Nyder (754090) on Monday January 21, 2013 @06:38PM (#42651703) Journal

    since Paypal is caving in to pressure from the AA's to not do business with companies/people/websites the AA's don't like, it looks like Paypal is trying to get back the business of the other people they have screwed over.

    My guess is nothing is probably going to change, but a Press Release saying so looks good.

  • Alternatives (Score:2, Informative)

    by Anonymous Coward on Monday January 21, 2013 @06:40PM (#42651725)

    They're (Paypal) probably noticing the flood of payment alternatives. Stripe et al. come to mind...

    • by flimflammer (956759) on Monday January 21, 2013 @08:28PM (#42652553)

      I think the problem with most alternatives is PayPal covers the most ground. I've been looking for alternatives to PayPal for a while now and none of them have covered the kind of ground PayPal does. Even Google's offering, which you would honestly kind of expect to be pretty widely available is only usable in a few countries.

      I await the day PayPal is lost to the annals of obscurity.

  • TL;DR (Score:2, Insightful)

    by CanHasDIY (1672858) on Monday January 21, 2013 @06:45PM (#42651753) Homepage Journal
    You already burned us once, PayPal.

    You will not be given another opportunity.
  • by Gorshkov (932507) <admgorshkov.yahoo@com> on Monday January 21, 2013 @06:45PM (#42651757)
    Until recently, I was on the board of directors for a local homeless shelter here in town. RIght now, we're in the middle of planning a major fundraiser. When it was suggested that we get a paypal account so that people could purchase tickets on-line, I went ballistic - I've heard way too many horror stories over the years. I'm not sure others on the fundraising committee quite believed everything I said, but my reaction was so strong it spooked them, and they backed off the idea completly. Paypal's changes will have to be effective, and in place for a very long, long time before they even have a *chance* of having people like me deal with them. That's a very large part of the market they've never had, and quite possibly never will.
  • by cualexander (576700) on Monday January 21, 2013 @06:45PM (#42651761)
    PayPal once froze my account. I didn't realize how much they take those comments seriously and several years ago I sent some money to my wife with PayPal and put "For Sexual Favors" in the memo box, just kidding around, the way people would do on checks back in the day. Well, apparently PayPal thought I was actually paying for sex with PayPal and froze the funds. After I called them and explained the situation though, they quickly released the funds.
  • Too little too late (Score:4, Interesting)

    by Mephistophocles (930357) on Monday January 21, 2013 @06:45PM (#42651765) Homepage
    Yep, don't care. They lost me 2 years ago and short of their entire executive team kissing my bare ass on national TV, there's no way in hell I'm ever going back. Doing business with them was exactly like being raped.
    • by Anonymous Coward on Monday January 21, 2013 @06:59PM (#42651863)

      >> They lost me 2 years ago and short of their entire executive team kissing my bare ass on national TV,

      Hi! I'm with customer relations at PayPal and we're working hard to restore our name and good will to our prior customers. Our new policy is to do everything within our power to help you view the new open PayPal in a better light. As such, your request for a public ass kissing has been reviewed internally and accepted.

      Please write back with your name, number and the nearest TV or film station so that it can be broadcast.

      Disclaimer: Note: All fees and expenses related to the round-trip ticket to your home town, purchase of air time, film crew and all misc and incidental fees will be applied to your paypal account.

      Thanks!

      Joe
      Paypal Customer Service.

  • In Germany (Score:4, Insightful)

    by Anonymous Coward on Monday January 21, 2013 @06:56PM (#42651841)
    Paypal does not get much news coverage in Germany, it is just not as useful since the bank transfer system is pretty fine. But a while ago they managed to get onto the news when they tried to force a company to stop selling Cuban cigars. The company decided to stop offering paypal transfers instead of stopping to sell the cigars.
    But really, how is that their bussiness? And why is that stupid Cuba embargo still in place? Some people said that this embargo has always been about turning Cuba into a colony.
    • Re:In Germany (Score:4, Interesting)

      by mapsjanhere (1130359) on Monday January 21, 2013 @07:54PM (#42652325)
      The embargo on Cuba dates back to the nationalization of US property in Cuba by Castro (think Bacardi). What's actually forbidden is the transfer of US funds to Cuba, which is why Paypal, as a US company subject to that rule, gets antsy if people use their service to pay for Cuban goods. They would have to trace every transaction involving the German cigar seller for any US based funds, and that would be a huge nightmare. Easier for them to just block the whole transaction
    • by 1s44c (552956) on Tuesday January 22, 2013 @03:51PM (#42660231)

      What's the name of that company? I'm going to order some cigars from them.

  • Too late for us (Score:5, Informative)

    by tipo159 (1151047) on Monday January 21, 2013 @07:05PM (#42651917)

    I am involved with organizing a sporting event. This last year was our seventh running of the event. In previous years, the sanctioning body would collect the entry fee and send the events their portion. Because of some issues with the sanctioning body (not really set-up for credit card payment and slow payment to events), the system was switched to where events collected the entry fee.

    We decided to go with PayPal for most of the normal reasons folks go with PayPal. I had the PayPal-based payment system up on the event web site in a couple of hours. The first month of getting entry fee payments went fine and we could transfer the funds into the event's bank accounts (to cover pre-event costs like venue deposits and insurance).

    The trouble started at the end of the early entry period for the event (when entry fees increased). To avoid the increase in entry fees, almost everyone entered in the event who had not already done so, paid their entry fee on the same day. This triggered PayPal's fraud system and the event's PayPal account was locked. Although we had successfully run the event for the six prior years (with outside media coverage to prove it) and our paperwork was in order, PayPal decided that they would not give us access to the funds until after the event had run, "just in case the event was cancelled and the entry fees needed to be refunded".

    PayPal's actions were almost a self-fulfilling prophesy. Without access to the funds to cover pre-event costs, the event was almost cancelled. Luckily, between the entry fees collected before the PayPal account was locked, the entry fees that we collected directly after the account was locked and understanding vendors, we were able to cover the pre-event costs and the event was held.

    After successfully running the event, we contacted PayPal to get the account unlocked. At first, they wanted to make us wait six weeks. However, we pressed the point that we had bills that had to be paid and needed access to the funds ASAP. After an hour on the phone, they unlocked the funds and gave us access to the funds.

    Compared to some people that I have spoken with, we got off easy.

    I don't care what PayPal's new policy is. We are not putting our event at risk again by accepting payment via PayPal.

    • Re:Too late for us (Score:4, Insightful)

      by DanielRavenNest (107550) on Monday January 21, 2013 @07:44PM (#42652247)

      Just tack on a PayPal "processing fee" for anyone that wants to use that method. This is an extra charge to cover the chance that PayPal will jerk you around. For example: Check, Visa, or Mastercard = $20 entry fee, Paypal = $20 + $5 Paypal processing fee = $25. This will make most people use another method, but still leave the option open for people who have no other way to pay. The extra fee covers your risk and hassle in using PayPal.

      You can even adjust the processing fee in real time to keep your risk manageable: Assume you have reserves from last year's event equal to 20% of this year's expenses. Then adjust the fee so that no more than 20% of your registrations are through PayPal. In the worst case, you can still cover your bills, and argue unfreezing your account afterwards.

      • Re:Too late for us (Score:5, Informative)

        by Jah-Wren Ryel (80510) on Monday January 21, 2013 @08:08PM (#42652421)

        Just tack on a PayPal "processing fee" for anyone that wants to use that method.

        Paypal terms of use forbid surcharges specifically for paypal transactions. You might be able to get away with a discount for other payment methods (I don't know for sure), that is the way people traditionally got around similar rules for credit cards - a cash discount rather than a credit card fee.

      • by tipo159 (1151047) on Monday January 21, 2013 @08:57PM (#42652743)

        Just tack on a PayPal "processing fee" for anyone that wants to use that method. This is an extra charge to cover the chance that PayPal will jerk you around. For example: Check, Visa, or Mastercard = $20 entry fee, Paypal = $20 + $5 Paypal processing fee = $25. This will make most people use another method, but still leave the option open for people who have no other way to pay. The extra fee covers your risk and hassle in using PayPal.

        I had been using PayPal as a onesy-twosy seller on eBay for a long time and never had a problem with PayPal. The guy running the event had had a eBay store and never had a problem with PayPal. It seemed like a safe, easy way to handle online entry fee payment. PayPal was our way to accept credit card payment. Based on our experiences, we had thought that people who had had problems with PayPal must have done something wrong.

        Now we know better.

        For this year's iteration of the event, with more time, we have found ways to accept credit cards (with code that we can drop into our website for online payment) that are safer for us (and less expensive) than PayPal.

  • Not going back (Score:5, Informative)

    by JohnnyBGod (1088549) on Monday January 21, 2013 @07:55PM (#42652335)

    Honestly, I've given up on Paypal. Back in 2009, I've had my account frozen due to using many credit cards. Since I didn't have a job, I (thought I) couldn't get an actual credit card, and used a service in my country that generates temporary credit card numbers, valid for a month and with a set credit limit*. Well, Paypal didn't like that I used more than (IIRC) 15 credit cards in X time, so they blocked my account. I've since learned that Paypal e-mail support is where messages go to die, and, through site revisions, has become almost impossible to find. So, to resolve my problem, I had to call an Irish number, where this lady basically told me "No credit card, no dice". So then silly me goes and gets an actual credit card and calls again. "Looks good. It should be OK, now" - someone else says. It isn't. The next call: "OK, reset the password from your main computer". a) My main computer was a laptop which died in the middle of this process, and I've told them this, and b) What's the point of being on the web if you're requiring people to do something from a set computer? I've reset the password and the account is still blocked, so I've given up. Luckily, I only lost a little money in this process, but I've been finding that living without PayPal is easier than I thought.

    * For the curious, https://www.mbnet.pt/ [mbnet.pt]

  • by rueger (210566) * on Monday January 21, 2013 @08:49PM (#42652683) Homepage
    There are people who still use PayPal? Merchants or sites that encourage it? I can't recall the last time I came within spitting distance of PayPal for anything.

    Then again, it's been several years since I went near e-Bay either.....
  • by retroworks (652802) on Monday January 21, 2013 @09:22PM (#42652879) Homepage Journal
    I transferred a good bit of money to my wife in Paris in 2007. It had worked twice previously. On the third time, Paypal "froze" the funds, IE took them out of our joint account in the USA, but not putting them into our account in France. Several weeks went by, I was calling constantly. One particular guy taking my calls will live in my memory forever. I learned to just say "escalate" "escalate" "escalate", as we reached a point when my wife in France's internet account would be cut off for non-payment. We had to keep faxing documents all showing both our names on both the accounts. It was an absolute horror show. I don't understand why there is not a class action suit against them for the interest Paypal earned from all of the people like me who had all of their money in Paypal limbo. I'm way too busy to worry about this now, but if I had time to, I'd hate their guts.
    • by 1s44c (552956) on Tuesday January 22, 2013 @03:42PM (#42660137)

      I transferred a good bit of money to my wife in Paris in 2007. It had worked twice previously. On the third time, Paypal "froze" the funds,

      Paypal steal money, it's their business model.

      But.. What the hell were you doing? Paypal isn't an international transfer service. You would be killed on fees and conversion charges by using them. A normal bank transfer would get the job done or even better a transfer service like xetrade.com charges about 2% off mid market rates. Even western union would be better than paypal for sending money abroad.

  • by PopeRatzo (965947) on Monday January 21, 2013 @10:10PM (#42653167) Homepage Journal

    None of this would be a problem if PayPal had serious competition. There should have been half a dozen companies doing exactly what PayPal was doing which were started in the past five years.

    Recently, the local bank where we keep our family's and our business accounts has started offering a QuickPay service which apparently hooks into Chase Bank and allows for sending and receiving money to and from email accounts. It's still in its infancy compared to PayPal, but I've been using it more and more because of how much I loathe PayPal. It works just as well and hopefully it will become more widely used. I'd switch away from PayPal in a minute if there were good alternatives (I'm in the US).

  • by ub3r n3u7r4l1st (1388939) on Monday January 21, 2013 @11:12PM (#42653501)

    Now about time for someone to actually challenge eBay. eBid, uBid etc. never gain steam. We need an auction site that takes all sorts of payment methods, including enabling established sellers to accept non-recoursable payment methods like Western Union, Bitcoins etc. to increase liquidity.

  • by Morpeth (577066) on Tuesday January 22, 2013 @02:54AM (#42654519)

    Given their security doesn't reassure me, I was done with them once they started requiring my SSN. I was nervous enough they had my bank info, but SSN? Given I've used them for non-essential purchases (games, hobby related items, etc), I said, no thanks. I tried to contact them to get a legit explanation about why they claim to need my SSN, especially since I'm ONLY a buyer, never a seller, so tax issues are not relevant.

  • by jago25_98 (566531) <jago25_98&hotmail,com> on Tuesday January 22, 2013 @08:04AM (#42655589) Homepage Journal

    The problem with Paypal is that they are heavily linked into ebay, certainly in France and the UK where Paypal has to be accepted and is very hard to avoid using.

    I've looked hard at ways to use ebay without Paypal but can see no way even for someone such as myself who would sacrifice 50% less sales in order to use a competitor to Paypal. Ebay in turn is very dominant for goods in the UK, a first port of call for any cheap goods from HongKong or used goods especially.

  • by 1s44c (552956) on Tuesday January 22, 2013 @03:25PM (#42659957)

    After all these years and all these warnings I can't believe paypal still has any customers.

    Paypal take other peoples money and keep it, that always was their business model. Deal with them only if you want to lose your money. Deal with them only if you want them to empty all linked accounts too.

C makes it easy for you to shoot yourself in the foot. C++ makes that harder, but when you do, it blows away your whole leg. -- Bjarne Stroustrup

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