5 ms·

Given that we've all read similar situations happening all over the web, I'm surprised organizations aren't including "paypal drops us for arbitrary reasons" or

by rio517 10y ago

Given that we've all read similar situations happening all over the web, I'm surprised organizations aren't including "paypal drops us for arbitrary reasons" or "paypal freezes our funds with them for arbitrary reasons" in their risk assessments when choosing vendors. In almost every case, that risk should probably push decision makers away from Paypal. It is also a little entertaining that their "brand risk" department is probably doing so much unintentional damage to the brand.

draugadrotten 10y ago
> It is also a little entertaining that their "brand risk" department is probably doing so much unintentional damage to the brand. reply Their brand risk department obviosly tries to optimize the brand for someone big, someone nameless, and not for the customers. This itself leads to questions about paypals business model. Are they in business to provide payment services to users, or are their primary customers actually not end users, but someone buying something else?
- ComodoHacker 10y ago
  Perhaps they want to become "financial Facebook", to profile and and sell users' spending habits.
  - CaptSpify 10y ago
    Or they are being coerced into doing that /conspiracy-theory
simonswords82 10y ago
The reason PayPal continues to be provided with the opportunity to fuck people over is primarily due to their low financial/technical barriers to entry. A website can be configured to accept PayPal payments in less than half a day, and setting up a new PayPal account is a very straightforward process. Compare this with setting up a merchant account to take payments (here in the UK), which takes weeks, involves finding a payment gateway, all sorts of paperwork and hoop jumping. Fortunately companies like stripe.com have appeared here and will now eat in to PayPals user base. I can't wait for PayPal to go away.
- oarsinsync 10y ago
  I deployed Nochex instead of PayPal back in 2005, and it took less than half a day, and came with guaranteed no chargebacks on UK payments and lower fees. Good PayPal competitors have existed in this space for a long time. PayPal still remains.
  - simonswords82 10y ago
    So is it the sheer dominance of the PayPal brand?
- sovande 10y ago
  > Fortunately companies like stripe.com The sad truth is that Stripe is behaving exactly like PayPal. What's worse is that Stripe's fraud protection is non-existing. In other words, Stripe is actually worse than PayPal, as you risk the same account freeze, closing etc, but in addition, you will be swamped down with fraudulent purchases and chargebacks.
  - simonswords82 10y ago
    Ouch - that's a shame as I was hoping our next startup would use Stripe. I'd better do some more due diligence on them before we commit.
  - tarstarr 10y ago
    (Disclaimer: I work at Stripe) Stripe does have a fraud protection product, which is enabled by default for every user. It centers around a machine learning system, that uses static signals (e.g. card issuing country) and time-dependent, dynamic signals (e.g. "how many different devices have tried to use this card in the last N hours?") to analyze every charge that hits our systems. Transactions that are deemed almost certainly fraudulent are automatically declined (but can be reviewed in the dashboard or via the API.) We're constantly working on product & performance improvements, but feel free to get in touch with me directly (tara@stripe.com) to ask questions or share feedback on our models (and fraud product in general).
PeterisP 10y ago
It's the same for all other payment processing methods - no matter how you handle your money, "our bank drops us for one reason or another", "our creditcard acquiring provider freezes our funds for arbitrary reasons", "our favorite cryptocurrency suddenly loses liquidity due to a major fraud event" and all kinds of other channel risks should absolutely be on your mind if you want to, like, base your whole business on receiving money through that channel. You should have alternate payment channels - even if you don't want to use them now, even if they're twice as expensive, if you need that money flowing then you want to have a solid alternate payment channel. Even if you don't want to advertise them to your customers due to e.g. costs, then you want to have all the legal agreements and technical integration in place so that you can turn it on right now if you needed to.
zyx321 10y ago
For most of their existence, PayPal have been living the "shady questionably-legal startup" dream, operating in a heavily regulated industry while ignoring almost all of the regulations. They've been screwing over their customers, closing accounts on allegation of fraud and dragging out refunding the alleged victims for months and months, since before they were acquired by eBay. People still use their service. It's always been this way. People use PayPal because it's convenient, and because there's no real competitor with comparable market penetration. No, I'm not sure that PayPal's brand will suffer much from continuing to act the way they've always done.
- dopamean 10y ago
  > For most of their existence, PayPal have been living the "shady questionably-legal startup" dream, operating in a heavily regulated industry while ignoring almost all of the regulations. I'm not saying you're wrong (because I actually don't know) but this seems to be way off base. What specific regulations are they ignoring? My understanding is that most of the things people gripe about with PayPal are borne out of PayPal's attempt to stay in line with regulations.
  - zyx321 10y ago
    I suppose it depends on whether you think of PayPal as a payment processing company that just so happens to prefer keeping your money on their internal accounts indefinitely rather than paying out ASAP like most competitors, or as a pseudo-bank in denial about their bankiness.

by rio517 10y ago

draugadrotten 10y ago

> It is also a little entertaining that their "brand risk" department is probably doing so much unintentional damage to the brand. reply Their brand risk department obviosly tries to optimize the brand for someone big, someone nameless, and not for the customers. This itself leads to questions about paypals business model. Are they in business to provide payment services to users, or are their primary customers actually not end users, but someone buying something else?

ComodoHacker 10y ago
Perhaps they want to become "financial Facebook", to profile and and sell users' spending habits.
- CaptSpify 10y ago
  Or they are being coerced into doing that /conspiracy-theory

simonswords82 10y ago

The reason PayPal continues to be provided with the opportunity to fuck people over is primarily due to their low financial/technical barriers to entry. A website can be configured to accept PayPal payments in less than half a day, and setting up a new PayPal account is a very straightforward process. Compare this with setting up a merchant account to take payments (here in the UK), which takes weeks, involves finding a payment gateway, all sorts of paperwork and hoop jumping. Fortunately companies like stripe.com have appeared here and will now eat in to PayPals user base. I can't wait for PayPal to go away.

oarsinsync 10y ago
I deployed Nochex instead of PayPal back in 2005, and it took less than half a day, and came with guaranteed no chargebacks on UK payments and lower fees. Good PayPal competitors have existed in this space for a long time. PayPal still remains.
- simonswords82 10y ago
  So is it the sheer dominance of the PayPal brand?
sovande 10y ago
> Fortunately companies like stripe.com The sad truth is that Stripe is behaving exactly like PayPal. What's worse is that Stripe's fraud protection is non-existing. In other words, Stripe is actually worse than PayPal, as you risk the same account freeze, closing etc, but in addition, you will be swamped down with fraudulent purchases and chargebacks.
- simonswords82 10y ago
  Ouch - that's a shame as I was hoping our next startup would use Stripe. I'd better do some more due diligence on them before we commit.
- tarstarr 10y ago
  (Disclaimer: I work at Stripe) Stripe does have a fraud protection product, which is enabled by default for every user. It centers around a machine learning system, that uses static signals (e.g. card issuing country) and time-dependent, dynamic signals (e.g. "how many different devices have tried to use this card in the last N hours?") to analyze every charge that hits our systems. Transactions that are deemed almost certainly fraudulent are automatically declined (but can be reviewed in the dashboard or via the API.) We're constantly working on product & performance improvements, but feel free to get in touch with me directly (tara@stripe.com) to ask questions or share feedback on our models (and fraud product in general).

PeterisP 10y ago

It's the same for all other payment processing methods - no matter how you handle your money, "our bank drops us for one reason or another", "our creditcard acquiring provider freezes our funds for arbitrary reasons", "our favorite cryptocurrency suddenly loses liquidity due to a major fraud event" and all kinds of other channel risks should absolutely be on your mind if you want to, like, base your whole business on receiving money through that channel. You should have alternate payment channels - even if you don't want to use them now, even if they're twice as expensive, if you need that money flowing then you want to have a solid alternate payment channel. Even if you don't want to advertise them to your customers due to e.g. costs, then you want to have all the legal agreements and technical integration in place so that you can turn it on right now if you needed to.

zyx321 10y ago

For most of their existence, PayPal have been living the "shady questionably-legal startup" dream, operating in a heavily regulated industry while ignoring almost all of the regulations. They've been screwing over their customers, closing accounts on allegation of fraud and dragging out refunding the alleged victims for months and months, since before they were acquired by eBay. People still use their service. It's always been this way. People use PayPal because it's convenient, and because there's no real competitor with comparable market penetration. No, I'm not sure that PayPal's brand will suffer much from continuing to act the way they've always done.

dopamean 10y ago
> For most of their existence, PayPal have been living the "shady questionably-legal startup" dream, operating in a heavily regulated industry while ignoring almost all of the regulations. I'm not saying you're wrong (because I actually don't know) but this seems to be way off base. What specific regulations are they ignoring? My understanding is that most of the things people gripe about with PayPal are borne out of PayPal's attempt to stay in line with regulations.
- zyx321 10y ago
  I suppose it depends on whether you think of PayPal as a payment processing company that just so happens to prefer keeping your money on their internal accounts indefinitely rather than paying out ASAP like most competitors, or as a pseudo-bank in denial about their bankiness.