5 ms·

Paypal is evil

99 points by joshowens 17y ago

radu_floricica 17y ago
With all the horror stories around I'd say they're simply not a professional choice as a Merchant Account. Simple as that. They do a lot of other stuff very well.
breck 17y ago
PayPal is not evil. I can't think of a company that has done more to democratize banking than PayPal. Setting up a Merchant Account can be a real pain (and I too hope PayPal improves in this regard), but I really hope the author thinks harder about the title next time before making such a generalization. If you want to know why PayPal is not evil, try this experiment: Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc. PayPal offers this to everyone, regardless of how rich or poor you are. If you don't have a lot of money other banks such as WellsFargo, Bank of America, etc., could care less about you and will try and take as much as they can from you in the form of ATM charges, monthly fees, overdraft charges, etc. Of course, I may be making my own over generalization here, but suffice it to say that I don't think PayPal is evil.
- anApple 17y ago
  Well said. To each story there are both sites of the story. No point was being written outlining the reasons why his accounts was being closed. If he would be serious about doing business, he could have provided all that information in the beginning.
  - joshowens 17y ago
    anApple, Four Bean Soup's account wasn't closed, the paypal account is fine. Paypal disabled the gateway credit card processing with no explanation of why. Providing paperwork is easy, but they never asked for more of it to get the gateway set back up.
- joshowens 17y ago
  breck, I disagree, to me when you don't offer customer service availability to departments and don't offer any real explanations for denial of service, that is bad. Just because a "big bank" is worse, doesn't make Paypal "good". Credit Unions are the only true "good" in the banking industry. The credit unions are non-profit and thusly they don't try to gouge you.
  - thibaut_barrere 17y ago
    Sidenote: non-profit doesn't imply something isn't a scam or involves fraud.
  - kiba 17y ago
    Gouge? We all have to live by selling dearly and buying lowly.
  - scott_s 17y ago
    What you describe is ineptitude and inability to provide service at a massive scale. That is bad, but it is not "evil."
- itistoday 17y ago
  I don't think anyone actually thinks PayPal is "evil" (in the Jungian sense), but, as this story suggests, and the story it linked to suggests, and as the number of upvotes its received suggests, there is plenty of evidence that indicates PayPal isn't known for stellar customer service, and therefore you might at least want to consider having a Plan B before signing up with them. Just ask Google: http://www.google.com/search?q=paypal+horror+story http://www.google.com/search?q=paypal+horror+story
  - joshowens 17y ago
    Well put! I think the headline was just for grabbing attention, but the moral of the story is to always have a backup plan if you use paypal.
    - ams6110 17y ago
      You should always have a backup plan no matter who you use. You don't want a single point of failure on your ability to receive payments.
  - gnosis 17y ago
    Upvotes don't always indicate agreement. I know I upvote many stories that are well written, interesting, and thought provoking, even when I don't agree with them.
    - Mz 17y ago
      I typically upvote articles to "save" them for future reference. It doesn't in any way mean I "agree" with the point of view, just that I think either the article or the discussion attached to it is something I might want to revisit for some reason.
- jasonlbaptiste 17y ago
  Just because you do a lot of good does not mean you can just get off with a lot of bad. Their customer service is horrible and they don't deal with issues such as this the proper way. I agree with you, they've done a ton to democratize banking. What good is all that if you lose all the money they've allowed you to make because they have poor customer service practices?
- philwelch 17y ago
  "Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc." ING Direct has all of these.
  - teej 17y ago
    ING Direct doesn't have a strict minimum balance, but will close your account if you use too many "free" services or if you need to much personal support. "We fire our customers is a colorful way of putting it," said ING Direct's Kuhlmann. "While the banking business says the customer is always right, we're online guys and you can only do business with us in a certain way." -- "4% interest...why not bank online?" (http://money.cnn.com/2005/10/02/pf/debt/internet_banking/index.htm?cnn=yes http://money.cnn.com/2005/10/02/pf/debt/internet_banking/ind...)
    - philwelch 17y ago
      I've not had my account closed despite being a customer for almost 5 years, and I've been everywhere from broke to carrying a modest balance. It's probably fair to point this out, though: at least ING Direct is highly unlikely to arbitrarily close my account and freeze my funds because they think I ripped someone off on eBay.
- holygoat 17y ago
  PayPal is not a bank. You have no recourse if they screw you (e.g., by suspending your account and keeping your money for 180 days). Unlike a bank they will terminate your PayPal account if your store lists items they find objectionable, such as anything related to firearms. http://www.keepandbeararms.com/information/XcIBViewItem.asp?ID=2141 http://www.keepandbeararms.com/information/XcIBViewItem.asp?... See the recently launched GunPal for a response to this. http://en.wikipedia.org/wiki/GunPal http://en.wikipedia.org/wiki/GunPal PayPal might not be evil, but they are certainly not operating with your best interests at heart, and -- unlike a bank -- they aren't regulated.
  - graham-miln 17y ago
    It is worth noting PayPal's activity is regulated within the EU: "On May 15, 2007, PayPal announced that it would move its European operations from the UK to Luxembourg, commencing July 2, 2007 as PayPal (Europe) S.à r.l. & Cie, S.C.A.[33] This would be as a Luxembourg entity regulated as a bank by the Commission de Surveillance du Secteur Financier (CSSF), the Luxembourg equivalent of the FSA.[34] PayPal Luxembourg will then provide the PayPal service throughout the European Union (EU)." -- PayPal's Wikipedia page. This status, within the EU, provides some protection for both businesses and customers.
  - moeffju 17y ago
    The way I read the linked article, PayPal just don't list gun stores in their PayPal Shops portal.
    - holygoat 17y ago
      I've seen examples of more direct action. For example, Soldier's Angels had their entire PayPal account disabled for simply processing the payments for a raffle where one prize was a pistol. They were simply selling raffle tickets for someone else's raffle, and they're a registered charity, but PayPal is very strict: it's "relate[d] to sales of … (h) ammunition, firearms, or certain firearm parts or accessories", so boom, account disabled. http://snarkybytes.com/?p=4015 http://snarkybytes.com/?p=4015
- e40 17y ago
  "Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc." You just described ingdirect.com.
- foldr 17y ago
  >Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc. You can in fact open bank accounts like that in many countries (e.g. England). Charging for simple services like wire transfers is an odd US practice.
dbz 17y ago
I'm on the side of PayPal is evil. I'm tempted to ask everyone who has been affected by PayPal's "security measures" (a frozen account) to write a post and submit it to a blog. -But I don't want to waste anyone's time. Anyways. Aye. I have been affected.
- billclerico 17y ago
  paypal's security measures can seem draconian, but they are necessary in many ways. the relative ease with which you can open an paypal account (versus another type of merchant account) makes them vulnerable to fraud. i'm not saying it couldn't be improved, i'm just saying that it's necessary in many ways. where paypal falls on its face (in my humble & biased opinion) is that they are pretty inflexible and unaccomodating with customer service. this turns a frustrating situation into an "evil" one. disclaimer: i cofounded wepay.com, which competes with paypal (in a few limited ways)
  - dbz 17y ago
    Well. I hate to be like this -but- you are now my friend. You go competitor! You go! Okay. Now for the "ness" which makes this post not spam. "they are pretty inflexible and unaccomodating with customer service" Yes. That is a problem. Another problem is that they freeze accounts almost to the point of "seemingly randomly". In my opinion. It's not uncommon either. It's not rare enough to be forgiven as a mistake. Paypal has problems with (I guess?) flagging "spam". If the problem is viewed as originating because of the ease of access (easy to sign up), then Paypal should make it harder to sign up. However, if you build a fence, you must consider the consequences for when it falls down. Anyone who has personally been affected by Paypal is also at fault for not considering it might happen and planning ahead. That statement is my opinion and I stand by it. There is a reason why I don't have a Paypal account with ten thousand dollars in it. The reason is that I will need those ten thousand dollars and I expect Paypal to take it away from me. My paranoia, however, is founded from experience. Okay. I ranted. I apologize =/
  - teejae 17y ago
    Which payment processor did you end up using for dealing with credit cards and whatnot? What were the fees? Would appreciate any information you might have.
nhebb 17y ago
The problem with these stories is that the millions of PayPal users who have never had a problem aren't heard from, so there is no sense of perspective or balance. That said, I have a low trust tolerance of payment processors, so I (1) have alternate payment methods setup and available, and (2) transfer cash out frequently.
Subgun 17y ago
The evil part of paypal is that they don't learn from their mistakes very quickly and they seem to not realize they are affecting peoples MONEY. Kinda silly but true. It's business as usual over there regardless of $1 or $100,000 they just tied up of your cash. I went through the same scenario in 2003 with paypal with tens of thousands of dollars locked up pending a review... Thankfully we had a back up plan (credit card processing) The plus side of paypal... when you and if you can process some serious loot through them you get treated like a rock star and you get access people and help you wouldn't otherwise get.
- boundlessdreamz 17y ago
  tens of thousands of dollars is not serious loot?
  - Subgun 17y ago
    It wasn't to them at the time... not until we had processed about 80-100k did things settle down. I think they have a hard time with their risk management protocol. Keep customers happy and loose a lot of money or piss off customers and loose less money from scammers...
aseidman 17y ago
Concerning that posts with the word "evil" in them seem to rocket up towards to the top of Hacker News. This post totally abuses the word "evil"
- derefr 17y ago
  Hackers (and I do think that, by and large, HN is still populated by "hackers") are aesthetes. When we say that something is "good" or "evil," we're not making a moral judgement, but rather an aesthetic one. Consider, for example, that most people here would consider the famous MIT pranks to be "good." There is no argument that can be made that they are morally good—but they are certainly aesthetically pleasing, and we respect that. This article points out the contrapositive: PayPal, no matter its ethical implications (which breck pointed out above), is aesthetically displeasing—it offers a bad communicative interface to the developer (a bad API), and the rules governing it cannot be elegantly described (a bad design). This also explains quite a bit of what HN seems to love or hate. We love Apple because they care about aesthetics, but we hate the App Store because it is capricious and seemingly internally shoddy/"crufty." We love Google because they're open about everything they do, and so they're predictable—they give us a sense of being a controllable force, even if they're too large to actually control. None of this has anything to do with whether their actions are helping or harming us. It's purely a matter of subjective Quality, with no quantitative measurements going on behind it. No one here ever shuts up and multiplies[1]—and that's okay. Humanity is pointless without subjective experience. But it's good to be conscious that that's what we're really talking about here. [1] http://wiki.lesswrong.com/wiki/Shut_up_and_multiply http://wiki.lesswrong.com/wiki/Shut_up_and_multiply
xsmasher 17y ago
In the most recent PayPal horror stories I've read the common denom has been digital goods. PayPal doesn't seem to know what to do when there's no physical product being shipped, and no tracking number. Do similar problems happen with physical items?
marknutter 17y ago
What's evil is offering Twitter software that lets people auto-follow followers and auto-tweet rss feeds. The former helps perpetuate all the follower spam out there and the latter fills Twitter with yet more redundant content.
CalmQuiet 17y ago
Perhaps there is a reason for the interesting Google "suggestions" when you start your search with "paypal is" [ following the strategy on boy-/girlfriends at http://news.ycombinator.com/item?id=1043476 http://news.ycombinator.com/item?id=1043476 ] Although there are customer service horror stories about Google itself, the stories about PP seem to keep on coming (as, apparently, do their policies/procedures). I make a practice to process only that $ amount through PP that I am comfortable losing.
sucuri2 17y ago
That scares the shit out of me. I am planning to start offering a paid option on my startup and using Paypal (so far it was free to everyone)... Is there a simple solution (at least as a backup) to paypal? I am not in the US, so most of the recommended solutions I see only work for US companies.

99 points by joshowens 17y ago

With all the horror stories around I'd say they're simply not a professional choice as a Merchant Account. Simple as that. They do a lot of other stuff very well.

breck 17y ago

PayPal is not evil. I can't think of a company that has done more to democratize banking than PayPal. Setting up a Merchant Account can be a real pain (and I too hope PayPal improves in this regard), but I really hope the author thinks harder about the title next time before making such a generalization. If you want to know why PayPal is not evil, try this experiment: Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc. PayPal offers this to everyone, regardless of how rich or poor you are. If you don't have a lot of money other banks such as WellsFargo, Bank of America, etc., could care less about you and will try and take as much as they can from you in the form of ATM charges, monthly fees, overdraft charges, etc. Of course, I may be making my own over generalization here, but suffice it to say that I don't think PayPal is evil.

anApple 17y ago
Well said. To each story there are both sites of the story. No point was being written outlining the reasons why his accounts was being closed. If he would be serious about doing business, he could have provided all that information in the beginning.
- joshowens 17y ago
  anApple, Four Bean Soup's account wasn't closed, the paypal account is fine. Paypal disabled the gateway credit card processing with no explanation of why. Providing paperwork is easy, but they never asked for more of it to get the gateway set back up.
joshowens 17y ago
breck, I disagree, to me when you don't offer customer service availability to departments and don't offer any real explanations for denial of service, that is bad. Just because a "big bank" is worse, doesn't make Paypal "good". Credit Unions are the only true "good" in the banking industry. The credit unions are non-profit and thusly they don't try to gouge you.
- thibaut_barrere 17y ago
  Sidenote: non-profit doesn't imply something isn't a scam or involves fraud.
- kiba 17y ago
  Gouge? We all have to live by selling dearly and buying lowly.
- scott_s 17y ago
  What you describe is ineptitude and inability to provide service at a massive scale. That is bad, but it is not "evil."
itistoday 17y ago
I don't think anyone actually thinks PayPal is "evil" (in the Jungian sense), but, as this story suggests, and the story it linked to suggests, and as the number of upvotes its received suggests, there is plenty of evidence that indicates PayPal isn't known for stellar customer service, and therefore you might at least want to consider having a Plan B before signing up with them. Just ask Google: http://www.google.com/search?q=paypal+horror+story http://www.google.com/search?q=paypal+horror+story
- joshowens 17y ago
  Well put! I think the headline was just for grabbing attention, but the moral of the story is to always have a backup plan if you use paypal.
  - ams6110 17y ago
    You should always have a backup plan no matter who you use. You don't want a single point of failure on your ability to receive payments.
- gnosis 17y ago
  Upvotes don't always indicate agreement. I know I upvote many stories that are well written, interesting, and thought provoking, even when I don't agree with them.
  - Mz 17y ago
    I typically upvote articles to "save" them for future reference. It doesn't in any way mean I "agree" with the point of view, just that I think either the article or the discussion attached to it is something I might want to revisit for some reason.
jasonlbaptiste 17y ago
Just because you do a lot of good does not mean you can just get off with a lot of bad. Their customer service is horrible and they don't deal with issues such as this the proper way. I agree with you, they've done a ton to democratize banking. What good is all that if you lose all the money they've allowed you to make because they have poor customer service practices?
philwelch 17y ago
"Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc." ING Direct has all of these.
- teej 17y ago
  ING Direct doesn't have a strict minimum balance, but will close your account if you use too many "free" services or if you need to much personal support. "We fire our customers is a colorful way of putting it," said ING Direct's Kuhlmann. "While the banking business says the customer is always right, we're online guys and you can only do business with us in a certain way." -- "4% interest...why not bank online?" (http://money.cnn.com/2005/10/02/pf/debt/internet_banking/index.htm?cnn=yes http://money.cnn.com/2005/10/02/pf/debt/internet_banking/ind...)
  - philwelch 17y ago
    I've not had my account closed despite being a customer for almost 5 years, and I've been everywhere from broke to carrying a modest balance. It's probably fair to point this out, though: at least ING Direct is highly unlikely to arbitrarily close my account and freeze my funds because they think I ripped someone off on eBay.
holygoat 17y ago
PayPal is not a bank. You have no recourse if they screw you (e.g., by suspending your account and keeping your money for 180 days). Unlike a bank they will terminate your PayPal account if your store lists items they find objectionable, such as anything related to firearms. http://www.keepandbeararms.com/information/XcIBViewItem.asp?ID=2141 http://www.keepandbeararms.com/information/XcIBViewItem.asp?... See the recently launched GunPal for a response to this. http://en.wikipedia.org/wiki/GunPal http://en.wikipedia.org/wiki/GunPal PayPal might not be evil, but they are certainly not operating with your best interests at heart, and -- unlike a bank -- they aren't regulated.
- graham-miln 17y ago
  It is worth noting PayPal's activity is regulated within the EU: "On May 15, 2007, PayPal announced that it would move its European operations from the UK to Luxembourg, commencing July 2, 2007 as PayPal (Europe) S.à r.l. & Cie, S.C.A.[33] This would be as a Luxembourg entity regulated as a bank by the Commission de Surveillance du Secteur Financier (CSSF), the Luxembourg equivalent of the FSA.[34] PayPal Luxembourg will then provide the PayPal service throughout the European Union (EU)." -- PayPal's Wikipedia page. This status, within the EU, provides some protection for both businesses and customers.
- moeffju 17y ago
  The way I read the linked article, PayPal just don't list gun stores in their PayPal Shops portal.
  - holygoat 17y ago
    I've seen examples of more direct action. For example, Soldier's Angels had their entire PayPal account disabled for simply processing the payments for a raffle where one prize was a pistol. They were simply selling raffle tickets for someone else's raffle, and they're a registered charity, but PayPal is very strict: it's "relate[d] to sales of … (h) ammunition, firearms, or certain firearm parts or accessories", so boom, account disabled. http://snarkybytes.com/?p=4015 http://snarkybytes.com/?p=4015
e40 17y ago
"Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc." You just described ingdirect.com.
foldr 17y ago
>Go to your bank and try to open a checking account with a debit card with no minimum balance, a positive interest rate, ability to transfer money instantly without writing a check (basically a wire transfer) for free, no insufficient fund charges, no monthly fees, free online and mobile banking, etc. You can in fact open bank accounts like that in many countries (e.g. England). Charging for simple services like wire transfers is an odd US practice.

dbz 17y ago

I'm on the side of PayPal is evil. I'm tempted to ask everyone who has been affected by PayPal's "security measures" (a frozen account) to write a post and submit it to a blog. -But I don't want to waste anyone's time. Anyways. Aye. I have been affected.

billclerico 17y ago
paypal's security measures can seem draconian, but they are necessary in many ways. the relative ease with which you can open an paypal account (versus another type of merchant account) makes them vulnerable to fraud. i'm not saying it couldn't be improved, i'm just saying that it's necessary in many ways. where paypal falls on its face (in my humble & biased opinion) is that they are pretty inflexible and unaccomodating with customer service. this turns a frustrating situation into an "evil" one. disclaimer: i cofounded wepay.com, which competes with paypal (in a few limited ways)
- dbz 17y ago
  Well. I hate to be like this -but- you are now my friend. You go competitor! You go! Okay. Now for the "ness" which makes this post not spam. "they are pretty inflexible and unaccomodating with customer service" Yes. That is a problem. Another problem is that they freeze accounts almost to the point of "seemingly randomly". In my opinion. It's not uncommon either. It's not rare enough to be forgiven as a mistake. Paypal has problems with (I guess?) flagging "spam". If the problem is viewed as originating because of the ease of access (easy to sign up), then Paypal should make it harder to sign up. However, if you build a fence, you must consider the consequences for when it falls down. Anyone who has personally been affected by Paypal is also at fault for not considering it might happen and planning ahead. That statement is my opinion and I stand by it. There is a reason why I don't have a Paypal account with ten thousand dollars in it. The reason is that I will need those ten thousand dollars and I expect Paypal to take it away from me. My paranoia, however, is founded from experience. Okay. I ranted. I apologize =/
- teejae 17y ago
  Which payment processor did you end up using for dealing with credit cards and whatnot? What were the fees? Would appreciate any information you might have.

nhebb 17y ago

The problem with these stories is that the millions of PayPal users who have never had a problem aren't heard from, so there is no sense of perspective or balance. That said, I have a low trust tolerance of payment processors, so I (1) have alternate payment methods setup and available, and (2) transfer cash out frequently.

Subgun 17y ago

The evil part of paypal is that they don't learn from their mistakes very quickly and they seem to not realize they are affecting peoples MONEY. Kinda silly but true. It's business as usual over there regardless of $1 or $100,000 they just tied up of your cash. I went through the same scenario in 2003 with paypal with tens of thousands of dollars locked up pending a review... Thankfully we had a back up plan (credit card processing) The plus side of paypal... when you and if you can process some serious loot through them you get treated like a rock star and you get access people and help you wouldn't otherwise get.

boundlessdreamz 17y ago
tens of thousands of dollars is not serious loot?
- Subgun 17y ago
  It wasn't to them at the time... not until we had processed about 80-100k did things settle down. I think they have a hard time with their risk management protocol. Keep customers happy and loose a lot of money or piss off customers and loose less money from scammers...

aseidman 17y ago

Concerning that posts with the word "evil" in them seem to rocket up towards to the top of Hacker News. This post totally abuses the word "evil"

derefr 17y ago
Hackers (and I do think that, by and large, HN is still populated by "hackers") are aesthetes. When we say that something is "good" or "evil," we're not making a moral judgement, but rather an aesthetic one. Consider, for example, that most people here would consider the famous MIT pranks to be "good." There is no argument that can be made that they are morally good—but they are certainly aesthetically pleasing, and we respect that. This article points out the contrapositive: PayPal, no matter its ethical implications (which breck pointed out above), is aesthetically displeasing—it offers a bad communicative interface to the developer (a bad API), and the rules governing it cannot be elegantly described (a bad design). This also explains quite a bit of what HN seems to love or hate. We love Apple because they care about aesthetics, but we hate the App Store because it is capricious and seemingly internally shoddy/"crufty." We love Google because they're open about everything they do, and so they're predictable—they give us a sense of being a controllable force, even if they're too large to actually control. None of this has anything to do with whether their actions are helping or harming us. It's purely a matter of subjective Quality, with no quantitative measurements going on behind it. No one here ever shuts up and multiplies[1]—and that's okay. Humanity is pointless without subjective experience. But it's good to be conscious that that's what we're really talking about here. [1] http://wiki.lesswrong.com/wiki/Shut_up_and_multiply http://wiki.lesswrong.com/wiki/Shut_up_and_multiply

xsmasher 17y ago

In the most recent PayPal horror stories I've read the common denom has been digital goods. PayPal doesn't seem to know what to do when there's no physical product being shipped, and no tracking number. Do similar problems happen with physical items?

marknutter 17y ago

What's evil is offering Twitter software that lets people auto-follow followers and auto-tweet rss feeds. The former helps perpetuate all the follower spam out there and the latter fills Twitter with yet more redundant content.

CalmQuiet 17y ago

Perhaps there is a reason for the interesting Google "suggestions" when you start your search with "paypal is" [ following the strategy on boy-/girlfriends at http://news.ycombinator.com/item?id=1043476 http://news.ycombinator.com/item?id=1043476 ] Although there are customer service horror stories about Google itself, the stories about PP seem to keep on coming (as, apparently, do their policies/procedures). I make a practice to process only that $ amount through PP that I am comfortable losing.

sucuri2 17y ago

That scares the shit out of me. I am planning to start offering a paid option on my startup and using Paypal (so far it was free to everyone)... Is there a simple solution (at least as a backup) to paypal? I am not in the US, so most of the recommended solutions I see only work for US companies.