After The Regretsy and Diaspora Account Freezes, We’ve Lost Confidence In PayPal
techcrunch.com
techcrunch.com
I recently had to receive a significant payment from a client of mine. It would have been convenient--and worth the fees--for me to use Paypal to receive that money. But after all the stories of frozen accounts and my own experiences, I'm scared to use Paypal for more than a few hundred dollars. I had the client send a check instead.
But I will never use PayPal again, that's for sure.
They can't 'steal' the money - when accounts are locked they either hold onto it for six months or require you to keep a minimum balance. This is how they mitigate their massive risk profile.
Their customer services are entirely worthless, it's true, but I suspect that anyone coming to 'disrupt' PayPal will struggle with many of the same issues because they're caused by fundamental risk issues with online payments.
In this case I was both the buyer (from my personal account) and the seller (my business paypal account - I was using my own app to register a domain).
So despite the fact that I had access to both accounts PayPal interfered and did not let either side mark the transaction as legit! Various emails to paypal later I gave up. I did everything they asked, re-verified etc
It was basically impossible to sort out either through the paypal interface, through their customer support, or by phone. At least I know what my customers go through... bye paypal.
If this property is sacrificed in the interest of making it difficult to 'launder', then its utility is questionable.
One of the properties of money is that it's value can be trusted. If money can be easily laundered then it can't be trusted and it's utility is questionable.
Thus, PayPal doesn't particularly care if merchants despise them, because the merchants have little choice; you can't easily convince people to use a new service, and on eBay you have no choice at all. PayPal will quickly provide a refund to customers because PayPal want to keep customers happy, and because they know merchants will eat a refund now and then. And PayPal doesn't particularly care about understanding merchants who don't ship physical objects to customers in boxes, because they don't want to think too hard about that case when it doesn't matter to most of their customers; they'd rather err on the side of "you haven't shipped a product, so we'll issue a refund".
No amount of bad PR among people like us, who actually care about merchant woes, will overcome the incredibly positive impression PayPal makes on people who spend money.
Once upon a time, I was ordering a shiny new processor from eBay. The processor was located in Italy and the seller was Italian (obviously). I think nothing of what PayPal would do and send the money. Mere hours later: "Your account has been frozen." They wanted my utility bill, SSN card, drivers' license, and a copy of my birth certificate (I still live with my parents because I'm in high school, so my name wasn't even on the utility bill). To pay for one fucking $200 processor.
Luckily, I contacted the seller and we did the transaction through Escrow. He was pretty understanding of it and claimed that his account had been suspended numerous times. He used the exact words "piece of shit scammers" to describe PayPal.
WePay all the way. Someone needs to start a rival auction site that uses these other payment services. I'd use that nonstop as I have a ton of stuff to sell but my eBay account is banned (and my name is blacklisted from both PayPal and eBay, hilariously).
Good point, with WePay you wouldn't have this problem. No Italians would be able to take your money https://www.wepay.com/Does-WePay-allow-international-non-US-...
The first line about people no longer trusting Paypal. People haven't trusted Paypal for many years, but used them anyway.
The whole business of freezing legit accounts and consequently stonewalling the owners, often for months has all the hallmarks of a scam.
I would not be surprised to see Paypal execs end up in jail.
I would be incredibly surprised to see bankers/paypal execs go to jail. It would almost restore faith in our system. The only bankers I've heard about going to jail in my life were a handful of scapegoats involved with the SNL scandal, a couple of "rogue traders", and Bernie Madoff.
To quote Anti-Heros, "Don't pass go. Don't post bail. Rich people don't go to jail."
I think they realize this and it might be the reason they drag their feet on Google Checkout.
Paypal would not release where his money had gone or even how to get it back and even went as far as suggesting his parents had stolen it from his account before finally releasing the money back into his account. This went on for months, it was all over a nominal £200 theft.
I highly doubt this story. That sort of technology per se is not possible.
More likely someone used the same password on the email and or paypal account and it got out.
However I do agree with you that the most likely scenario was him being phished or exposed to a trojan.
A lot of the things you say "far fetched, but not impossible"/"enough effort" are misleading. These things are about as likely as winning the lottery several weeks in a row. Possible. But be realistic.
What is realistic and happens a lot is (a) bad computers security (b) password reuse (c) simple passwords ("password1" and friends) (d) one site someone gets hacked and people know that password (e) some malware on the machine. These things are much more likely than someone sitting outside their house.
That's not only misleading, but also wrong.
Might make more sense than the way I went about it
I'm going to go for (b) personally. (a) would work, though!
However, this has not happened and indeed, people are pleased to obliviously broadcast their personal details across their neighborhood without even considering 'if I can pick this up, can my neighbor next door listen in?'. They'd probably figure it out if it was just a radio, right?
Security hazards of unsecured (or poorly secured, say WEP) wifi has been known for some time, of course. My current favorite is coffee shop that don't use AP isolation... nothing is more exciting than eavesdropping on students doing their nursing homework.
And it is entirely possible, the was a story in the UK running warning people of open wireless networks. I know data between the client and Paypal is encrypted but it's the only conclusion I came to.
Like I say, I only followed his issue in passing but that is the only way I could see it happening (without his parents actually stealing the money!)
There are stories in popular UK newspapers saying using facebook gives you cancer ( http://www.dailymail.co.uk/health/article-1149207/How-using-... ). Are you sure the warning open wireless wasn't that it'd give you cancer? ( http://www.dailymail.co.uk/news/article-1168547/Wi-fi-networ... http://www.dailymail.co.uk/news/article-456534/The-classroom... )
If you do any amount of tech support, you'll find users who will misremember, outright lie, or have silly ideas about computer security. A user could tell you that of course they never go to any of those website where you might get a virus, or that their computer is acting fine, and that's how they know they don't have a virus, or that of course they would never use the same password anywhere. All of these things make me doubt users.
If you read further comments I admit a more feasible reason will probably be trojans.
But, making your customers loathe you turns out to be a bad idea in the long term. The very moment reasonable alternatives present themselves, those customers are gone for good.
PayPal has done a lot of legwork, especially for international commerce. But this legwork can and will be done again one day – or, someone will discover an interesting workaround that makes this legwork unnecessary for some specific but perhaps very common cases. Human ingenuity is inevitable, especially with such rich rewards waiting.
Either way, PayPal won't enjoy its position forever. Unless they turn these perceptions around, it'll be hard fall.
I now try to remember to phone them before buying computer bits or large "unusual" purchases, but that has a 50% chance of a dropped call as they try to transfer my request.
So, no, PayPal aren't really any different to any other payment processor in my experience.
I have a business account with my bank and I'm a valued customer and they offer me extra services and discounts. Yet with Paypal, if you run a business through them, you're almost automatically treated like a hassle, a criminal, a 'suspect'.
The truth is they couldn't care less; they're a preferred point for e-transactions on eBay and elsewhere.
It's back when you wanted an iPhone but hated AT&T, they knew you couldn't get an iPhone with another provider, so they didn't give two shits about their crappy service and customer care.
That said, I have no major complaints with Paypal. (Nor do most merchants who use the service. You just don't read blog posts like "Day 1,349: Paypal continues to provide very cheap services without requiring a merchant account. Details pretty much same as Day 1,348."
Paypal does need to make some changes, but many of the people that get their accounts frozen are either transferring lots of money in a short amount of time or are running suspicious businesses (even though they may not be illegal or even unethical).
People want better customer service, not less security precautions. (Who would want less security precautions with their money? Is this just a really argumentative way to push a position?)
I never withdraw less than $5000 at a time...
Of course once it's frozen you can't get at the money, that's the whole point of locking down the account. I've experienced it myself, but not with PayPal -- I had over $13,000 held for 6 months.
$34
$17
$14
$9
$7
$7
$5
$4
$4
$3
$3
$3
$2
$2
$2
$2
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
$1
That is a normal night. I use the PayPal MassPay API. On any given day my website gets something like $70 and pays out something like $50.
I assume I'm using the MassPay API the way PayPal wants, so I have not yet gotten in trouble. But the whole thing makes me nervous, so I plan to spend all of January switching my websites over to different payment processors.
However, I have not yet found an easier way to send money than the PayPal MassPay API. I worry I may have to stick with PayPal for awhile, as a way to send automated payments.
EDIT:also, Wepay.
Could also be worth noting that bitcoin is a real possibility, some business do it without any issues (except higher-than-normal volatility, but if you exchange your bitcoins quickly this won't ever be a problem).
Is it that hard for startups to provide international support?
Until there is a viable alternative, most of the world will be compelled to use PayPal.