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From winner, Nashville Flood Tees:

"Not only did PayPal shut us down for 24 hrs after only being live for less than 8 hrs, because of the sheer volume we sold, but they’ve been really slow and difficult releasing funds to us."

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This is why I can't understand how startups still use Paypal. With Paypal, your dispute could take forever to get resolved and there's no one you can call directly to get things fixed asap. Not only have costs on your own merchant accounts come down, they're easier to setup as well as make your business look more professional.

Because they either don't know about the problem or they think that the current alternatives are too hard to implement (or don't know them either).

Might also be a problem that Paypal is a brand that end users want to use. I'm sure I've read reports of online sales increasing when Paypal is an option. I guess the downside is that with that increase in sales there is the cost/risk that Paypal might also give you problems.

ease of use. merchant accounts are easier, but still not nearly as easy as paypal. and i wish i could tell people about some alternative to use, but there isn't anything as easy to use out there (amazon payments probably being the next closest).

This happens really a lot with PayPal, the other case I can think of off the top of my head is wtfjeans

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