I haven't trusted Paypal for a long time, since they repeatedly froze my account just for accessing it from a foreign IP. That wouldn't be so bad, except for their demands of things like faxes of utility bills and bank account statements just to get it unfrozen. Ridiculous.
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.
I had the same experience, but even more ridiculous.
When I was trying to fill the form for the verification, I always had an error on the page that said "please try again later". I tried to get in touch with support, and at all my emails they were replying with the same copy and paste with the steps, which I could not follow. I tried to get someone on the phone, with no luck. After weeks I gave up, because the money on the account were not worth the hassle (they were around 300€).
But I will never use PayPal again, that's for sure.
I wonder how much Paypal has stolen from their former customers this way over the years. It might even account for a sizable portion of their total revenue.
It will be held in non-interest generating accounts until it can be released. Srsly, this is financial services and there's the odd regulation or two that everyone - including PayPal - have to follow.
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.
I had a similar experience when I accessed my personal PayPal account from another country.
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.
Without wanting to justify Paypal's actions wouldn't it be easy to launder money through Paypal if they let you so easily mark a 'suspicious' transaction as legit?
True and I'm not trying to undermine the point that Paypal is a complete PITA but..
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.
I understand your point, what I'm saying is that even after following all of PayPal's instructions, re-verifications and talking to customer services - as well as telling them (as the buyer) that the transaction is legit, I wasn't able to sort it out.
The fundamental problem here: PayPal doesn't really care about how merchants feel about it. PayPal cares about making people who spend money really happy, and they succeed at that. They have a huge captive audience with eBay, which requires the use of PayPal. They have thus created a huge base of clients who want to spend money using PayPal, because they find it convenient, because in many cases because it doesn't require a credit card, and because the customers know that they can always complain to PayPal and PayPal will make them happy.
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).
Techcrunch jumped the shark a long time ago. I'm assuming a band wagon is much larger than a shark, so it seems like the extra effort deserves some praise?
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."
Google could've really capitalized on this now if they didn't sit on their asses for years with Google Checkout. They will probably focus more on it now that they've renamed it to Google Wallet and they need it for Android, but it will take a while before it can even touch Paypal.
I don't believe Google could do it right. Nope, not with their track record of (automatically) blocking ad publishers' accounts and later stonewalling said publishers. All in the name of click fraud prevention, of course.
I think they realize this and it might be the reason they drag their feet on Google Checkout.
It really took you this long to lose confidence in PayPal? The Regretsy & Diaspora account freezes are just the tip of an iceberg of consumer abuse whose girth spans over a decade now. The real question is this: Why is it that all consumer banks become incredibly anti-consumer once they reach a certain scale? Paypal's business practices are no less abusive and invasive from that of Chase, Wells Fargo or Bank Of America.
A friend of mine recently had some money stolen from his Paypal account. The long and short is that someone was sat outside his house connected to his wireless and were monitoring keystrokes somehow. I don't know the detailed story as they were telling me over a series of months and I lost track.
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.
How is that sort of technology not possible? Is it not possible to connect to a secured wireless network with enough effort, and then maybe perform a MITM attack? Maybe the user used the same password on sites not protected with SSL. Or the hacker maybe manipulated traffic at router-level etc.
A far fetched scenario indeed, but not impossible.
However I do agree with you that the most likely scenario was him being phished or exposed to a trojan.
All this effort to steal money from someone who (I think) lives with their parents?!
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.
Haha, how is my statement of it being far fetched misleading? The scenario is far fetched, but possible, didn't say it was likely. The only reason I replied to your comment was that you said "That sort of technology per se is not possible.".
If you're a criminal who wants to do something from someone's IP, what's easier - (a) drive to their house, hack their wifi, and sit outside or (b) install a trojan on their computer and remote control it
I'm going to go for (b) personally. (a) would work, though!
Yes I agree, I wouldn't have come to the conclusion of option a originally if I had not watched a quite in-depth report on tv about it. It was quite unreal really how easy it was, they sat on a quiet suburb area, scanned for all the wireless networks and waiting for information to come in
All along, I've been hoping that the average person would start to take computers seriously and make an honest effort to learn what is going on with them... since the average person has started using computers throughout the day, unlike say, 1992.
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.
The reason they came to this conclusion is because they said the transfer initiated from his IP address. It's the only possible conclusion I came to.
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!)
It is more likely that it was a trojan/virus. There are several out there that monitor for just banking/paypal/payroll details, once it has something good the operator can easily bounce through the machine it's controlling to move the money.
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.
No, it was report on the TV where they sat outside their house and monitored all purchases they were making. They then ran a report off and went to the persons door with the report.
If you read further comments I admit a more feasible reason will probably be trojans.
But that Paypal does this shit has been a hardy perennial new story for years now. Competitors are coming, slowly, from different directions, but it's not clear that Paypal is actually much damaged by these stories.
Blockbuster wasn't damaged by all the ill-will they created by charging absurd, usurious late fees. They were the king of their realm, as PayPal is now.
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.
Paypal was the first to rise to the top, and has since benefited from the network effect. It's only been about 5 years since the average American started to be comfortable buying products online.
There were real competitors when PayPal was a younger company, but a lot of them went out of business because they didn't solve the fraud problem. It wasn't just a matter of adoption. PayPal hemorrhaged millions to fraud before they created the technical and people systems to make it manageable.
People are complaining about PayPal "hiding behind antifraud", but real banks do this too - at least in the UK. My bank has phoned me up multiple times to check transactions. On one occasion they simply "black-holed" a credit card transaction and didn't bother to tell me, nor did the merchant contact me. On another, they made a simple purchase take 45 minutes of phone-tag because buying a bed is an "unusual" purchase. Well, DUH. Moving house is pretty fucking unusual, too.
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.
yep, Paypal is awful. They hide behind 'fraud protection' as an excuse for absolutely awful and opaque customer services, yet... how many people here have had their bank account hacked/defrauded? And, at least for me, I can usually get my bank on the phone and most problems resolved within 5 minutes (and that's living in China dealing with a UK bank account).
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'.
As a counterpoint, when Paypal detected suspicious activity on my account ("Egads, someone just accessed your account from a novel IP in Japan and then received a payment of about a month of your normal turnover and then spent it really really quickly!!1"), it took a one-minute phone call to resolve. ("Hiya Paypal, it's me. does recognition dance I just moved apartments." "Oh, OK. We just wanted to make sure no hanky panky was happening. I've unlimited the account for you.")
Wow! That is positive. So far I've had really poor customer service from them, and not once spoken to a real person. I've never had the account frozen, just payments reversed and no explanation.
Wishful thinking. PayPal simply does not give a fuck what noise the silicon valley crowd makes. The startups that choose not to do business with PayPal are a drop in the bucket.
"Hey PayPal, do you realize people no longer trust you?"
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.
So what is the alternative for subscription-based software services? Is WePay a viable option here? I'm currently in the market, and, while not afraid of PayPal, I'm not fully enamored of them, either.
If I were picking new for today, I'd use Stripe + Spreedly if I were a US developer. (I've used both separately.)
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."
Why not Samurai? I looked at both stripe and samurai in conjunction w/ Spreedly and came out on the Samurai end (lower prices being the motivating factor)
I was done with them as soon as I read about the passing of Ilya Zhitomirskiy because I can't imagine the additional stresses put upon him because of how Paypal treated Diaspora. I stopped using them years ago but we need to organize a massive snub of the service until they revise their policies, make them fully transparent and stop constantly screwing people. Remember that we, as a country, were able to get the banks to scrap the $5 debit card fee. What are we waiting for with Paypal?
The article implies there have been problems with withdrawing your own money. I've never seen that come up in any of the stories over the years. Has anyone experienced that issue?
I am not clear on what you mean. Most of the time when a PayPal account is frozen, you can not get any money out. My PayPal account was frozen for almost 2 months, back in 2002. I had about $1,200 in the account, and I could not get at any of it. It was a painful episode for me, as I was broke and had been planning to use some of the money to pay my rent. PayPal asked for a lot of documentation from me. They wanted me to prove my address, but as I rented and moved around a lot, it was difficult to do so. I had to get a friend to put me on the electricity bill over at their house (the friend's house) so I could get some paper documentation that PayPal would accept. They hung onto my money for a long time.
The TechCrunch article warns that withdrawing too much money from your account can trigger having the account frozen, and recommends withdrawing less at a time. That's what I've not heard of before.
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.
I don't have any experience withdrawing money from paypal, but perhaps there is a way to make small automated withdrawals constantly? Though who knows, they may flag that behavior as fraudulent as well.
I should add, right now I've a cron job that runs once a night and which pays everyone who is owed money from my PayPal account. I have long worried this might look suspicious to PayPal. But the payments are usually small. On a normal night, at 3 AM EST, my PayPal account makes payments that might look like this:
$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.
I just found a reference shortly after mentioning Moneybookers and Payoneer, I have never used Wepay. Actually, I have only used Moneybookers (soon to be renamed "Skrill"). I'm based in Europe myself.
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).
"Startups are gunning" for PayPal? Since when? No one else has gone beyond the US. No one is creating any alternatives for international ecommerce. And how many years has it been that PayPal has had complete domination?
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.
It seems like everyone wants less security precautions. If a new company does just this and your account gets hacked, are you going to blame the service provider or expect them to take the hit for your lost money?
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).
>It seems like everyone wants less security precautions.
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 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.