Comment by HenryBemis | Hacker News Reader

Comment by HenryBemis | Hacker News Reader

Literally NO ONE wrote the below:

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

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

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

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

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

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

PayPal does have a feature they don't advertise named Auto Sweep, which withdraws any balance in your account each day. You need to contact support to enable it.

YMMV I am ok doing from my app every other night. It takes 5mins to withdraw to my card/account. I keep a certain balance and everything over that amount comes down to safety.

It'd be better if there were a way to autosweep to a paper check or fedwire if Auto Sweep's terms doesn't specifically prohibit Paypal from generating a withdrawal that backs out the ACH deposit.

I find this comment’s format profoundly confusing and have no idea what the intended meaning is. The first sentence is throwing me off so much.

English is likely not their native tongue.

True, and was in a rush, apologies for any confusion

Don't keep your money in paypal, withdraw it to your bank account as soon as you can.

to generalize, you shouldn't keep your money in any 3rd party longer than necessary.

Is a bank a 3rd party in this argument?

Yes. You should have more then one bank in case they lock your account for some random reason.

The most potent 3rd party is typically vindication and government laws giving it superpowers. They have more power over your money than banks.

no, but you shouldn't keep your money in a bank either. Put it in an investment vehicle to at least break even with inflation.

the 3rd parties I'm referring to are things like work marketplaces like upwork, even gift cards or undeposited checks.

To be more specific, you should not keep your money at a 3rd party with more control over your money than necessary for longer than necessary.

Giving PayPal an interest free loan and control over you balances rather than sweeping them into a (potentially interest bearing) account controlled by you is one example of this.

Another is having a second account at a different bank that you sweep money from the first one. That second bank account should be set up to reject automated ACH withdrawals so that you can push money into it but PayPal, your payroll company, your bill payers, or even other companies that ACH payments to you cannot withdraw from your account without your permission.

> That second bank account should be set up to reject automated ACH withdrawals

This is a thing? How do you do this?

And don't let PayPal know what you are doing or they may cancel your account.

They provide a feature auto withdraw, but you have to ask support for it apparently.

>> literally NO ONE wrote

> The first sentence is throwing me off so much

I didn't go to check because the mystery is more intriguing, but if the OOP's username is NO ONE, then maybe NO ONE literally did write that?

The comment is in the format of the "Nobody:" meme, which can be unintuitive and isn't well-suited for a forum like HN:

https://knowyourmeme.com/memes/nobody

The first line ("Literally NO ONE wrote the below:") introduces a hot take.

https://www.merriam-webster.com/words-at-play/origin-and-mea...

Nobody disagrees that this is what you have to do in PayPal's current state. The debate is to whether you should have to do it, or whether, given that it walks and talks like a bank, PayPal should nationally and globally be treated as a bank.

IIRC, PayPal has a banking licence in Europe and as such is regulated by Luxembourg's supervisory authority. It's strange, given the nature of PayPal's services, that it hasn't yet been deemed to be a bank or the equivalent in other places as well though.

A bank that suspected money laundering or suspicious activity would be expected to behave in exactly the same way. Any regulated entity would.

I think the argument is that with a bank they cannot arbitrarily freeze your account, you are given a reason for any freeze, and have the opportunity to fight it. However, I don't know enough about banking law to know if that's accurate.

That's not the case, a bank works in the same way. Typically a bank or financial institution will employ a set of machine learning models or rules (combined with human review) and freeze accounts on that basis.

Like PayPal, a bank also will not tell you why it has frozen your account (to avoid ripping off others in a crime ring). PayPal (like banks) give you an opportunity to fight it, but like banks they can't simply let you have the money if it is frozen.

Also, working in banking - banks and financial institutions will go out of their way to avoid false positives but do still need to remain compliant.

https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-...

From what I know, a bank will report suspicious transactions to the authorities, and obey whatever the authorities tell them to do about it. They will not assume the role of the authorities for themselves.

At least, that's how I understand the banking situation in Netherland, which seems about as reasonable as you can get. American companies do seem to be much more likely to play police.

> From what I know, a bank will report suspicious transactions to the authorities, and obey whatever the authorities tell them to do about it. They will not assume the role of the authorities for themselves.

Not the case. They're obliged to freeze the account when they suspect suspicious activity, and then submit a SAR if it is proven to be suspicioue. Freezing the acct is part of the investigation, and they usually now use automated tools to do so.

They're obliged to work every alert generated and unfreeze if the activity is proved to be legitimate.

> A bank that suspected money laundering or suspicious activity would be expected to behave in exactly the same way.

How many lawyers do you think a bank will have to retain to deal with the flood of preliminary injunctions they would have to deal with if they locked accounts at will?

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

His argument wasn't about protecting himself from Paypal's erroneous withdrawals. It's about not letting paypal to freeze his funds at Paypal

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

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

1. You auto sweep all money out of paypal

2. You regularly empty the checking account it sends to

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

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

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

The loss of money can be small compared to loss of business.

It is an interesting angle to try a civil suit for.

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

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

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

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

Yea I was wondering this too. In the case of something like an eBay transaction, can't PayPal pull the funds from your bank to appease a buyer?

The only account I let PayPal know anything about is dedicated to that purpose and nearly always has zero dollars in it.

Have a decent bank on the other end that doesn't charge erroneous overdraft and NSF fees?

I always go (and suggest to others) for the "bounced payment" (and it has never happened in my life). But banks really love overdrafts. It is a major source of income. I prefer to get an angry email and throw a freebie and sort this out than having the bank ripping me off. This way I show my counterpart that "hey mistakes happen here is your money and let me buy you dinner to show you that we are good", than having to the other person getting paid and me ebfing paying 5x that dinner cost.

Overdraft is a loan. Would you get a loan with insane interest rate and fees just to get a payment go through? Not me.

It stops them from freezing the account on Paypal. If you really want to insulate from the service you would set up a similar job at your bank that would immediately transfer the funds out of that account and into some other account. But honestly if you are going to this much trouble is it even worth it to use Paypal?

Just about any processor, Stripe included, stipulates they can withdraw from your account. And what if their systems are hacked, disclosing your account and routing numbers to an ill-intentioned third party?

You probably want this as a generic fail safe for any account that you disclose the account an routing number to an outside entity.

This is why bank preventing unauthorized withdrawals is so useful. And credit card processor disputes too.

Please elaborate on the means to prevent unauthorized withdrawals.

If you have someone's bank account number, you can pretty much take money out of it. By default there is no real authorization process by which the account holder is asked to allow the withdrawal. There is just the assumption that people aren't going to commit fraud, or people who commit fraud will be caught.

I'm not an expert on this, but I believe there are ways to set up business accounts where money can't be taken out in that way, at least not by the standard electronic means. You can also manage accounts in such a way as that there's no money to take out, although that does not necessarily prevent the account from going into the negative. Checking accounts can go into significant negative balances if the bank chooses to allow it.

It is more difficult than you describe it. To set up a monthly payment the bank verifies the request (e.g. if you sign such direct debit for the gym or your electricity bill). Every ebamli I ever used has a page with all these direct debit setups and alerts you when a new one is made to bring your attention to it. These also have limits. And a decent bank would scrutinize the direct debit. A gym or Vodafone will fly easier than a direct debit to VodkaPotatoLimited in Russia or China (no offense) when you live in the UK.

As to prevent the overdraft, just ask the bank to NOT have overdraft capacity on your account(s).

You can just print a check with the account and routing number.

I (always and forever) maintain accounts with NO overdraft. Banks like overdraft. I don't.

If something bounces, then I will handle it within 24h. Again, this is the setup that covers my needs. A different organizations with different needs should have different process/controls to match their liquidity/easy-to-access-cash needs.

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