PayPal: 'Aggressive changes' coming to frozen funds policy

"We're at risk from upstarts in every sector of our business. Developers hate us."

"All hands on deck! We've got to get the communications team together and put out the best damn press release we've ever done."

"But we don't have anything to announce."

"Just announce that we'll be making an announcement soon. An aggressive announcement."

"Ok, I'll put it in with the cheque for our last batch of commercials - that should ensure we get prominent coverage and see off the likes of Stripe - I'd like to see them get an empty press release onto CNN.com this fast."

To save everyone the trouble... This article is just a PR parrot piece, with no real substance or timelines beyond "aggressive changes" and "the next several months".

It just feels like a desperate attempt to convince potential clients not to go with competing services for a bit longer, like the new guy who took over at the top, showed up in person on a few on-line forums to say positive-sounding things, and then disappeared without trace.

Amusingly, the PR rep quoted in this article actually seems quite proud that when they screw up and freeze an innocent client's account and then demand a bunch of non-existent and inappropriate records to release the funds, the client won't be expected to submit them in the mail any more.

I'd wager that most of the people you see bagging on PayPal have:

1) Never used them in a business capacity

2) Have only read horror stories

3) Take those stories at face value

The horror stories usually have an obvious, "duh" kind of reasoning behind them when you step back and think about it from PayPal's point of view. Big influx of sales out of nowhere? That's a flagging. Accepting money for some kind of charity? That's a flagging.

I'm very satisfied with their service. They work to protect your money, your customers' money, and their reputation. If you're an entrepreneur and you aren't sure what payment processor to go with, don't exclude PayPal from consideration.

I find this quote from the article ironic:

"Nayar said he can't go into specifics about what will change, but transparency is a major focus."

This is great news.

Not because I care at all about PayPal's practices anymore, but because it might mean that enough people have joined the backlash and boycott to make PayPal take notice.

This is literally more than a decade overdue. The very first "sucks" site I ever heard of was none other than paypalsucks.com way back in the early 2000s, and even at that time it heavily documented this and many other issues with PayPal's service.

Awesome response time guys!

I feel like we've heard this all before countless times. Paypal has been poorly managed for a very long time. Their dictator like ways of, "We're freezing your account and keeping your money unless you send us all of your receipts proving all transactions are legitimate" have screwed so many over the years. I think it's a little too late to repair Paypal's image, the customer support staff are the least human like support staff I've ever dealt with. All responses from Paypal customer support are copied and pasted, 99% of the time ignoring what you've actually typed out. Maybe they should fix that problem while they're there.

I seriously doubt these aggressive changes will change anything, if they do it will probably only reduce the number of incorrectly frozen accounts by a small percentage. Paypal will always be brought down by their uneducated, non-compassionate customer support staff and their horrible policies. While my experience with them on a business level has been somewhat limited (I do have a business premier pro account) and I myself haven't had any serious issues, I've been through the frozen funds thing before but came out unscathed although after digging through the crappy support and finally getting someone with enough drive and compassionate to ensure my problems were resolved.

The number one problem isn't the policies, because a lot of people have nothing but good experiences with Paypal it's their staff, the people on the front-line who ensure your queries are appropriately directed and brought to the attention of the right people internally to solve your problem, these staff are misinterpreting policies and not listening. Another tolerable problem is Paypal's API: it feels archaic and pretty poor in comparison to other payment competitors with much nicer JSON API's and support for Javascript payments processing like Square. Paypal really need to step up their game, they've still got a chance considering the deep integration into Gumtree and eBay.

What about their arbitrary policies about freezing certain types of businesses' funds or not allowing them to operate using Paypal because they don't like them - like say if you sell a certain type of books?

Too little too late. Bitcoin already won (and for those naysayers that think Bitcoin will never win, theres at least three popular Paypal clones out there too)

so, Stripe is eating their lunch then...

It's about time. I do wonder to what extent the brand damage already done will be a drag on their usage numbers.

The one thing they don't say in this article is that they will be even attempting to reduce the number of frozen accounts. Instead, just make it a clearer process to get out of.

If they stopped doing seemingly arbitrary freezes, this would solve both problems.

It's been so long that paypal has had their reputation, I can't imagine using their services based on a statement from paypal.

paypal and godaddy -- I mean, come on, why would you if you didn't have to?

The article doesn't mention Bitcoin as an alternative :(

I still remember this: http://news.ycombinator.com/item?id=4494216

I hope to see a follow up with details on what exactly they've done, in the near future.