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Burning man defeats PayPal

200 points by alexandros 16y ago

ck2 16y ago
There are precious few "victory" stories over PayPal. Unlike a credit card company, if they feel they might have to dip even 1 cent into their own profits to deal with a bad transaction, they will immediately kill an account, no matter how large or how old. I simply do not understand why there are not more competitors to PayPal - don't these corporations see the billions PayPal has made (THREE BILLION profit per YEAR) and how they get to skirt all the rules and regulations that banks have to follow? Why not jump onboard and give consumers some choices?
- wallflower 16y ago
  > I simply do not understand why there are not more competitors to PayPal If you read the excellent interview with Max Levchin in Founders at Work, he alludes to the fact that PayPal is really just a state-of-the-art, best-in-class fraud detection system with a payment frontend. He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses.
  - nkassis 16y ago
    Yeah that probably explain why their customer service is horrible, they see it as an afterthought. I don't have an issue with them trying to kill fraud but there needs to be better communication between Paypal and it's business customers. I wouldn't be surprised if at one point the government come in and tries to apply credit card regulation to them if thats not already the case.
    - jacquesm 16y ago
      Paypal is already a bank in the EU. http://en.wikipedia.org/wiki/PayPal#Bank_status http://en.wikipedia.org/wiki/PayPal#Bank_status
    - xal 16y ago
      Paypal has roughly 8000 employees of which 7500 work in fraud and customer services none of which is outsourced. It's not that they are not taking it seriously.. Their customer support tends to be really good in my experience, don't base too much on the one in a million horror stories that make it to this site.
      - bad_user 16y ago
        > one in a million horror stories Even if the stats are really that low ... why does that horror story have to exist? Why can't they be fair to everybody?
        xal 16y ago
        law of large numbers. At 100 million customers, just about any conceivable thing that can happen will happen.
      - bad_user 16y ago
        > one in a million horror stories Even if the stats are really that low ... why does that horror story have to exist? Why can't they be fair to everybody?
  - tomh- 16y ago
    He forgot to mention it has an extremely large number of false positives using that system. The reason it might work is because they take/freeze money from innocent customers. The amount of horror stories about Paypal significantly outnumber the horror stories about regular banks or credit card companies.
    - patio11 16y ago
      The amount of horror stories about Paypal significantly outnumber the horror stories about regular banks or credit card companies. I surmise this is because you're a techy and you talk to people who run businesses online on a regular basis. If you spent a lot of time on, e.g., credit card discussion boards (they exist), or spoke to "regular people" about their payment issues on a regular basis, I suspect you would come to the opposite conclusion in a hurry. Paypal is not a scam which achieves profitability by freezing accounts. That is crazy talk.
      - atlantic 16y ago
        It's not crazy talk. I had a terrible experience with PayPal six months ago. I didn't believe all the horror stories and opened an account with them. They decided there was a problem and froze my account - but they neglected to tell me and continued accepting deposits, the freeze only applied to withdrawals. It was extremely difficult to recover my money. The point is, there are no rules, there is no transparency. Their decisions are entirely arbitrary and you are at their mercy. Never again.
      - tomh- 16y ago
        You are right I'm a techy, I talk to people who run online businesses, they use PayPal and other methods. PayPal is by far the biggest problem when it comes to payment solutions. Also I'm from Europe, which means I talk to people who use the common solutions in Europe to deal with payments, which is direct bank transfers or an online alternative provided by banks (such as iDeal in Holland). While our banks don't require as much documentation as PayPal sometimes requires, you also don't have to threaten them with lawsuits to get your money (I've seen that happen). They even have an chief escalation officer who jumps in in case clients threaten them with lawsuits. PayPal doesn't have the right to just freeze money for periods of 180 days without providing sufficient methods for their customers to quickly resolve the issues. 180 days for freezing all money for one suspicious transaction is absolutely ridiculous. I don't claim PayPal achieves profitability by freezing accounts, I do claim they regularly screw their own customers with questionable account balance freezes.
  - jimbokun 16y ago
    "He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses." It seems to me that deal with fraud is an important part of any bank's business.
    - wallflower 16y ago
      From the interview: "We started with this, 'Fraud is going to kill us. What can we do to save ourselves?' They started from, 'We have no fraud. How can we build this and not let any fraud in' He also goes says something about how in the Internet world it is very hard to verify someone - the more information you get to verify (e.g. PayPal verified account) - the more 'safe' user you are. And something about how the Banks couldn't do this (virtual transactions) because most of them were public companies and couldn't hide $10m/month in fraud losses (what PayPal was losing a month to fraud at that critical point) and not spook their institutional investors.
- jacquesm 16y ago
  Are you familiar with epassporte? https://www.epassporte.com/ https://www.epassporte.com/ One of the reasons why newcomers have relatively little chance is because credit card companies hate start-ups that do wallet systems.
wccrawford 16y ago
I hear way too many stories about this. I was even paying a company through PayPal when they had their account frozen and their money taken. 3 times. The company continued to use them because so many of their customers demanded PayPal. They had continued to use PayPal because it was cheaper to lose their funds (they regularly withdrew) than the customers. After the third time losing everything in their account, they finally had to tell their customers 'no PayPal' and live with the consequences. Yes, you read that right... PayPal took every cent in their account 3 times. And there's no law against it.
- ido 16y ago
  What is a better alternative? I understand Google Checkout also had similar issues in the past?
  - deleted 16y ago
    [deleted]
  - Throlkim 16y ago
    I've yet to use it myself, and I'm not sure if it's entirely been released yet, but Amazon has a payments system in the works: http://aws.amazon.com/fps/ http://aws.amazon.com/fps/
    - klous 16y ago
      I believe buyers need an Amazon account or Amazon FPS account to use Amazon FPS. How about an alternative to just accept CC# like Paypal's Website Payments Pro? (without needing a separate internet merchant account)
    - awad 16y ago
      It seems to have been out for a while. Does anyone have any experience with FPS? I'm launching a new project soon and the one thing left is payment processing. I'm scared to be tied to just PayPal and am looking into Google Checkout and Amazon as well. I know, I know, just get a merchant account. And I will. But this is not really a startup or company and much more of just a small idea I'd like to test out. Ideally, if it picks up steam, I'll switch over to a real merchant account.
rpledge 16y ago
Opencamp had similar issues, which only got resolved under public pressure http://openca.mp/blog/the-paypal-and-opencamp-resolution/ http://openca.mp/blog/the-paypal-and-opencamp-resolution/
jasonlbaptiste 16y ago
I refuse to go near PayPal. We don't accept it for PadPressed. We might be losing some revenue, but I can't support paypal / leave ourselves open to the shit they pull. Same thing with a conference we're putting on in October. Not allowing PayPal as an option. I hope WePay or someone else succeeds as being a viable+robust alternative.
- helveticaman 16y ago
  Use daily sweep.
iamelgringo 16y ago
Can I just say, kudos to WePay for picking up the drop and landing the account. These guys kick ass.
Ixiaus 16y ago
Burners are an innovative, sharp, and down to earth bunch; I'm not surprised PayPal got "burned" by pulling what they did. Burners are also a big(ish) community, some of which are influential people in mainstream society. Glad to see someone met their needs, WePay just got some damn good publicity.
blakejennelle 16y ago
We had a nightmare like this when we first launched MyDunkTank and were using PayPal for our payment processing. They suspended our ability to accept payments without warning or notification and then dragged us through a ridiculous and costly paperwork process for over a week. We supplied everything they asked for and more. They denied our appeal and then locked $2,600 in our account for 180 days without explanation. We worked every channel we could to get a more reasonable outcome and it was to no avail. There were a few good people in the PayPal bureaucracy who became champions for us but they were powerless. It was very discouraging. The irony is that PayPal originally challenged the man. Now they are the man.
- maushu 16y ago
  When you look into an abyss, the abyss also looks into you.
pinksoda 16y ago
PayPal once made me refund every customer in the last 6 months. They said it was the only way to unfreeze my account. I gave them the thumbs up because I had no other options at the time, and they said, "you have to manually refund them one-by-one yourself and then call us when it is done". It was really strange. They permanently froze my account after I refunded everyone and refused to talk to me when I called. I wasn't able to get a merchant account and I lost thousands of PayPal recurring subscriptions. This was the death of my first start-up. PayPal is a scam and it's not as uncommon as you think. If you're using PayPal, your time will come. I didn't think they would do it to me either, they never bothered me once until all of this went down.
- CamperBob 16y ago
  Well, that certainly sounds like half of a good story.
  - russell 16y ago
    Your point is well taken, but I have never seen a comment, here or elsewhere, where someone lauded the great PayPal service or the quick conflict resolution. It's always about being blindsided. Folks, if you have GOOD stories, those are worth posting for balance.
    - acgourley 16y ago
      Well the good story is pretty mundane. Here's mine: the payments have always gone through.
      - bmm6o 16y ago
        Point taken, but how about a story where there was a conflict that was settled quickly and fairly? In my case, my account was flagged (the business was legit, but I could understand if they had some cause for concern), but it was such a hassle to satisfy them I gave up. I couldn't talk to a person; I had to send dozens of faxes; I couldn't even email - I had to use a stupid form with a character limit; it was never laid out what I had to do or how many steps remained.
bluelu 16y ago
To every story there is also the other side of the story. They obviously don't freeze accounts account just like that for fun, so they certainly had some reasons to do so.
- matrix 16y ago
  The story isn't really about them freezing the account. I think everyone accepts that PayPal needs to be vigilant against fraud, given the amount they deal with. The story is that that legitimate customers are pretty much powerless to unfreeze their accounts; there's no due process, no oversight, and no accountability. If PayPal decides to screw you, that's it. Game over. Thanks for the free money.
- absconditus 16y ago
  This kind of story about PayPal is extremely common.
- almost 16y ago
  No, they freeze accounts when their automated system flags them. Things like you had more sales this week than normal. Then they won't talk to you or the people who will talk to you are so brain dead that they actually don't seem to understand what Paypal has already done or don't realise when they're asking you to do impossible things. That's my experience with them anyway. Eventually got it all sorted out but at the cost of not being able to get at my money for about a month. Just having friendly helpful customer support who can explain what's going on would make a huge difference.
ericz 16y ago
Can we start the move to Google Checkout and Amazon Payments? They both charge the same amount of fees as PayPal yet do not have draconian policies and downright retarded treatment of their customers
- dhimes 16y ago
  Customer service with PayPal is a hundred times better than customer service with Google, in my experience. I've never had a problem getting CS on the phone with PayPal. Google is a different story.
  - jrockway 16y ago
    And Amazon?
    - dhimes 16y ago
      I don't know about them yet. I hope somebody answers you, though.
    - smackfu 16y ago
      I think Amazon still has people boycotting them over the one-click patent.
- smackfu 16y ago
  Personally, I think the only options are PayPal or taking credit cards directly. Any other choice is just an obstacle to your customers, another account that they need to sign up for. Yes, people have Google accounts but do they have a credit card on file? The funny thing is that the competitors don't undercut PayPal. It's no wonder they aren't getting much traction.
gimmejimmy 16y ago
Here is another example of how PayPal is a bit shady: Sign into PayPal to send money. If you have a credit card as a payment method and a bank account as a payment method, PayPal will auto select your bank account. That's fine, except when you change your payment method from the default bank account to your credit card. A confirmation page comes up and tries to change your selection back to your bank account. There are two options: Use Bank Account / Use Credit Card. These options are randomly changed back and forth to confuse the user. Even the highlighting of these to option (which one is yellow) is randomized to make you accidently select the Bank Account option.
- christonog 16y ago
  Yes! I mainly use my credit card for everything online, including paypal, and that trick does get me on some occasions when I'm not paying close attention. It's probably a cost saving measure as credit cards most likely cost more to transact with than bank accounts.
  - oasisbob 16y ago
    Indeed. ACH processing is dirt cheap. I also wouldn't be surprised if the terms of ACH transactions are more favorable to PayPal than those of MasterCard/VISA. The ACH system has very strict rules guaranteeing payments once they clear the network, as opposed to the more consumer friendly rules that the card networks offer. ACH, afterall, is meant to be used by financial institutions that know exactly what they're doing.
- fuzzythinker 16y ago
  Based on your description, your use of "a bit" is too generous.
- Pistos2 16y ago
  I recently sent a payment from my Paypal account to someone else's. I thought I specified that the payment should be taken out of the credit card source, and not the bank account source. I saw a success page, closed my browser tab, and thought nothing more of it. Later, I received an email indicating that the recent payment I made "failed" to get funded by the bank account, and that the credit card was used as a fallback.
pyre 16y ago
I think that PayPal has the same problem as many police departments. The police spend so much time dealing with criminals and looking for criminals, that soon everyone that isn't a police officer looks and feels like a criminal. PayPal seems to have the same issue with fraudsters. They spend the majority of their time dealing with fraud and looking for fraud (the good transactions are automated and therefore abstracted away from human eyes for the most part) that everything that comes across their desk looks like fraud and is treated as guilty until proven innocent (hey, just like the IRS!). The assumption probably is that 'the system' detects fraud and 'the system' is practically infallible, so when it flags something as fraud they need mountains of evidence to prove that 'the system' is wrong (because 'the system' is perfect, didn't you know?).
stevederico 16y ago
Congrats to wepay. Great job on seizing a customer in trouble and meeting their needs. There are plenty of other frustrated pay pal customers, this could be a great starting point for wepay. Go get em wepay
techsupporter 16y ago
My organization had this same problem. We formed a cooperative corporation, filed for tax exempt status, and then opened bank and PayPal accounts. Within 7 days of opening the PayPal account for our org, it was frozen on the grounds that extra documentation was needed. Before I could send those documents, PayPal then turned around and froze my personal account since the organization's account had my name as the "responsible party" contact. The resolution? There hasn't been one. I tried to get PayPal to accept our tax-exempt documents, but they've refused because we're not a 501(c)3 charity (we are 501(c)12) and both the org and my personal accounts stay frozen.
inc 16y ago
http://i.imgur.com/DaLcV.gif http://i.imgur.com/DaLcV.gif
techiferous 16y ago
My wife is organizing a conference using a non-profit and is going through the same PayPal headaches. This is extremely bad customer service. All PayPal has to do is (1) refuse to do business with non-profits or (2) present non-profits with an accurate description of what could happen (account freezing, etc.) before they sign-up. (Burying this in the terms of service doesn't count, by the way.) Customer service is as much about expectations as it is about delivering.
HeyLaughingBoy 16y ago
The bigger news here is that PayPal is getting more negative publicity in mainstream press and that will, over time, force them to become more responsive. A few hackers bitching in online forums is one thing, A large social media response in connection with a well known festival threatening to close accounts is going to be much more effective
miah_ 16y ago
I find it amusing that people still use Paypal. Its been widely documented that they're a horrible company for years now. I closed my account a few years ago and haven't looked back. Paypal will not change their ways so long as people keep giving them money. Paypal is not a bank and thus doesn't have to follow the same rules as a bank. Please people, quit treating it like its a bank. Do not store your money there. Do not link it to your primary checking or savings accounts. Remember! Paypal will cause you great pain and serious amounts of anger. Its only a matter of time.
miah_ 16y ago
I find it amusing that people still use Paypal. Its been widely documented that they're a horrible company for years now. I closed my account a few years ago and haven't looked back. Paypal will not change their ways so long as people keep giving them money. Paypal is not a bank and thus doesn't have to follow the same rules as a bank. Please people, quit treating it like its a bank. Do not store your money there. Do not link it to your primary checking or savings accounts. Remember! Paypal will cause you great pain and serious amounts of anger. Its only a matter of time.
InfinityX0 16y ago
This is ridiculous. PayPal is not some evil "big brother" - they are a company whose entire business model relies on stopping fraudulent activity, and as such, things like this often occur. Pick your poison - either have this happen on occasion, or have your money frequently stolen and more likely, be made essentially impossible to transfer safely on the web. I will take the occasional inconvenience in exchange for a payment method that makes my life much, much easier.
- mironathetin 16y ago
  You say it is only occasional inconvenience that Paypal freezes/keeps their clients money?
- Gobiner 16y ago
  I don't doubt that you'd accept the occasional inconvenience to other people. Try having your own money taken away from you and report back to us about the "inconvenience."
markbao 16y ago
PayPal is absolute trash for payment processing. Horror stories aplenty. Take the time to obtain a merchant account.
edj 16y ago
Reading this thread made me a little paranoid. So I logged into my high school reunion account (I'm the organizer) to withdraw the funds into our bank account, and lo!, of course there's a hold on one classmate's payment. That's $75 we may never see... at least not in time to pay our caterers and such.
Mistone 16y ago
seems like they folded to social pressure of the burner community which is vocal and well connected, but their change of heart was driven by wanting to further avoid a PR shit storm. Joe Q web company or individual has no chance of getting similar treatment.
donaq 16y ago
Wow, I did not know there was so much bad karma for Paypal. Does anyone know of alternatives for businesses not located in the US?
elblanco 16y ago
The tl;dr version, "Burning man defeats PayPal by routing around it."
cloudbrain 16y ago
This is why I withdraw all funds from PayPal every weekday morning. PayPal has been the sole payment solution for my software company for more than 5 years. 99% of all of my money, my families money and my employees salaries goes through PayPal. When I bought my first home (at the end of 2005, oops...) I had to call PayPal to get some financial details for the mortgage company. I spoke with a nice person on the phone from PayPal and they faxed me the documentation I needed write away. Every time a new payment processor comes on the scene I check them out, but none have been able to offer the pricing or features I get via PayPal. That being said. I have read all the horror stories. So I just assume that any money left in my PayPal account overnight could be potentially lost. No problem, I just withdraw it every morning so my lost potential is always minimal (a few grand). I don't de recurring subscriptions. I imagine things would be different then. If I did subscriptions I think I would want my own merchant account - you want to own as much of the customer as you can.

200 points by alexandros 16y ago

ck2 16y ago

There are precious few "victory" stories over PayPal. Unlike a credit card company, if they feel they might have to dip even 1 cent into their own profits to deal with a bad transaction, they will immediately kill an account, no matter how large or how old. I simply do not understand why there are not more competitors to PayPal - don't these corporations see the billions PayPal has made (THREE BILLION profit per YEAR) and how they get to skirt all the rules and regulations that banks have to follow? Why not jump onboard and give consumers some choices?

wallflower 16y ago
> I simply do not understand why there are not more competitors to PayPal If you read the excellent interview with Max Levchin in Founders at Work, he alludes to the fact that PayPal is really just a state-of-the-art, best-in-class fraud detection system with a payment frontend. He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses.
- nkassis 16y ago
  Yeah that probably explain why their customer service is horrible, they see it as an afterthought. I don't have an issue with them trying to kill fraud but there needs to be better communication between Paypal and it's business customers. I wouldn't be surprised if at one point the government come in and tries to apply credit card regulation to them if thats not already the case.
  - jacquesm 16y ago
    Paypal is already a bank in the EU. http://en.wikipedia.org/wiki/PayPal#Bank_status http://en.wikipedia.org/wiki/PayPal#Bank_status
  - xal 16y ago
    Paypal has roughly 8000 employees of which 7500 work in fraud and customer services none of which is outsourced. It's not that they are not taking it seriously.. Their customer support tends to be really good in my experience, don't base too much on the one in a million horror stories that make it to this site.
    - bad_user 16y ago
      > one in a million horror stories Even if the stats are really that low ... why does that horror story have to exist? Why can't they be fair to everybody?
      - xal 16y ago
        law of large numbers. At 100 million customers, just about any conceivable thing that can happen will happen.
    - bad_user 16y ago
      > one in a million horror stories Even if the stats are really that low ... why does that horror story have to exist? Why can't they be fair to everybody?
- tomh- 16y ago
  He forgot to mention it has an extremely large number of false positives using that system. The reason it might work is because they take/freeze money from innocent customers. The amount of horror stories about Paypal significantly outnumber the horror stories about regular banks or credit card companies.
  - patio11 16y ago
    The amount of horror stories about Paypal significantly outnumber the horror stories about regular banks or credit card companies. I surmise this is because you're a techy and you talk to people who run businesses online on a regular basis. If you spent a lot of time on, e.g., credit card discussion boards (they exist), or spoke to "regular people" about their payment issues on a regular basis, I suspect you would come to the opposite conclusion in a hurry. Paypal is not a scam which achieves profitability by freezing accounts. That is crazy talk.
    - atlantic 16y ago
      It's not crazy talk. I had a terrible experience with PayPal six months ago. I didn't believe all the horror stories and opened an account with them. They decided there was a problem and froze my account - but they neglected to tell me and continued accepting deposits, the freeze only applied to withdrawals. It was extremely difficult to recover my money. The point is, there are no rules, there is no transparency. Their decisions are entirely arbitrary and you are at their mercy. Never again.
    - tomh- 16y ago
      You are right I'm a techy, I talk to people who run online businesses, they use PayPal and other methods. PayPal is by far the biggest problem when it comes to payment solutions. Also I'm from Europe, which means I talk to people who use the common solutions in Europe to deal with payments, which is direct bank transfers or an online alternative provided by banks (such as iDeal in Holland). While our banks don't require as much documentation as PayPal sometimes requires, you also don't have to threaten them with lawsuits to get your money (I've seen that happen). They even have an chief escalation officer who jumps in in case clients threaten them with lawsuits. PayPal doesn't have the right to just freeze money for periods of 180 days without providing sufficient methods for their customers to quickly resolve the issues. 180 days for freezing all money for one suspicious transaction is absolutely ridiculous. I don't claim PayPal achieves profitability by freezing accounts, I do claim they regularly screw their own customers with questionable account balance freezes.
- jimbokun 16y ago
  "He also says that Banks are more conservative than PayPal - in that they can't go after a business model where there is going to be fraud - and the game is to minimize the losses." It seems to me that deal with fraud is an important part of any bank's business.
  - wallflower 16y ago
    From the interview: "We started with this, 'Fraud is going to kill us. What can we do to save ourselves?' They started from, 'We have no fraud. How can we build this and not let any fraud in' He also goes says something about how in the Internet world it is very hard to verify someone - the more information you get to verify (e.g. PayPal verified account) - the more 'safe' user you are. And something about how the Banks couldn't do this (virtual transactions) because most of them were public companies and couldn't hide $10m/month in fraud losses (what PayPal was losing a month to fraud at that critical point) and not spook their institutional investors.
jacquesm 16y ago
Are you familiar with epassporte? https://www.epassporte.com/ https://www.epassporte.com/ One of the reasons why newcomers have relatively little chance is because credit card companies hate start-ups that do wallet systems.

wccrawford 16y ago

I hear way too many stories about this. I was even paying a company through PayPal when they had their account frozen and their money taken. 3 times. The company continued to use them because so many of their customers demanded PayPal. They had continued to use PayPal because it was cheaper to lose their funds (they regularly withdrew) than the customers. After the third time losing everything in their account, they finally had to tell their customers 'no PayPal' and live with the consequences. Yes, you read that right... PayPal took every cent in their account 3 times. And there's no law against it.

ido 16y ago
What is a better alternative? I understand Google Checkout also had similar issues in the past?
- deleted 16y ago
  [deleted]
- Throlkim 16y ago
  I've yet to use it myself, and I'm not sure if it's entirely been released yet, but Amazon has a payments system in the works: http://aws.amazon.com/fps/ http://aws.amazon.com/fps/
  - klous 16y ago
    I believe buyers need an Amazon account or Amazon FPS account to use Amazon FPS. How about an alternative to just accept CC# like Paypal's Website Payments Pro? (without needing a separate internet merchant account)
  - awad 16y ago
    It seems to have been out for a while. Does anyone have any experience with FPS? I'm launching a new project soon and the one thing left is payment processing. I'm scared to be tied to just PayPal and am looking into Google Checkout and Amazon as well. I know, I know, just get a merchant account. And I will. But this is not really a startup or company and much more of just a small idea I'd like to test out. Ideally, if it picks up steam, I'll switch over to a real merchant account.

rpledge 16y ago

Opencamp had similar issues, which only got resolved under public pressure http://openca.mp/blog/the-paypal-and-opencamp-resolution/ http://openca.mp/blog/the-paypal-and-opencamp-resolution/

jasonlbaptiste 16y ago

I refuse to go near PayPal. We don't accept it for PadPressed. We might be losing some revenue, but I can't support paypal / leave ourselves open to the shit they pull. Same thing with a conference we're putting on in October. Not allowing PayPal as an option. I hope WePay or someone else succeeds as being a viable+robust alternative.

helveticaman 16y ago
Use daily sweep.

iamelgringo 16y ago

Can I just say, kudos to WePay for picking up the drop and landing the account. These guys kick ass.

Ixiaus 16y ago

Burners are an innovative, sharp, and down to earth bunch; I'm not surprised PayPal got "burned" by pulling what they did. Burners are also a big(ish) community, some of which are influential people in mainstream society. Glad to see someone met their needs, WePay just got some damn good publicity.

blakejennelle 16y ago

We had a nightmare like this when we first launched MyDunkTank and were using PayPal for our payment processing. They suspended our ability to accept payments without warning or notification and then dragged us through a ridiculous and costly paperwork process for over a week. We supplied everything they asked for and more. They denied our appeal and then locked $2,600 in our account for 180 days without explanation. We worked every channel we could to get a more reasonable outcome and it was to no avail. There were a few good people in the PayPal bureaucracy who became champions for us but they were powerless. It was very discouraging. The irony is that PayPal originally challenged the man. Now they are the man.

maushu 16y ago
When you look into an abyss, the abyss also looks into you.

pinksoda 16y ago

PayPal once made me refund every customer in the last 6 months. They said it was the only way to unfreeze my account. I gave them the thumbs up because I had no other options at the time, and they said, "you have to manually refund them one-by-one yourself and then call us when it is done". It was really strange. They permanently froze my account after I refunded everyone and refused to talk to me when I called. I wasn't able to get a merchant account and I lost thousands of PayPal recurring subscriptions. This was the death of my first start-up. PayPal is a scam and it's not as uncommon as you think. If you're using PayPal, your time will come. I didn't think they would do it to me either, they never bothered me once until all of this went down.

CamperBob 16y ago
Well, that certainly sounds like half of a good story.
- russell 16y ago
  Your point is well taken, but I have never seen a comment, here or elsewhere, where someone lauded the great PayPal service or the quick conflict resolution. It's always about being blindsided. Folks, if you have GOOD stories, those are worth posting for balance.
  - acgourley 16y ago
    Well the good story is pretty mundane. Here's mine: the payments have always gone through.
    - bmm6o 16y ago
      Point taken, but how about a story where there was a conflict that was settled quickly and fairly? In my case, my account was flagged (the business was legit, but I could understand if they had some cause for concern), but it was such a hassle to satisfy them I gave up. I couldn't talk to a person; I had to send dozens of faxes; I couldn't even email - I had to use a stupid form with a character limit; it was never laid out what I had to do or how many steps remained.

bluelu 16y ago

To every story there is also the other side of the story. They obviously don't freeze accounts account just like that for fun, so they certainly had some reasons to do so.

matrix 16y ago
The story isn't really about them freezing the account. I think everyone accepts that PayPal needs to be vigilant against fraud, given the amount they deal with. The story is that that legitimate customers are pretty much powerless to unfreeze their accounts; there's no due process, no oversight, and no accountability. If PayPal decides to screw you, that's it. Game over. Thanks for the free money.
absconditus 16y ago
This kind of story about PayPal is extremely common.
almost 16y ago
No, they freeze accounts when their automated system flags them. Things like you had more sales this week than normal. Then they won't talk to you or the people who will talk to you are so brain dead that they actually don't seem to understand what Paypal has already done or don't realise when they're asking you to do impossible things. That's my experience with them anyway. Eventually got it all sorted out but at the cost of not being able to get at my money for about a month. Just having friendly helpful customer support who can explain what's going on would make a huge difference.

ericz 16y ago

Can we start the move to Google Checkout and Amazon Payments? They both charge the same amount of fees as PayPal yet do not have draconian policies and downright retarded treatment of their customers

dhimes 16y ago
Customer service with PayPal is a hundred times better than customer service with Google, in my experience. I've never had a problem getting CS on the phone with PayPal. Google is a different story.
- jrockway 16y ago
  And Amazon?
  - dhimes 16y ago
    I don't know about them yet. I hope somebody answers you, though.
  - smackfu 16y ago
    I think Amazon still has people boycotting them over the one-click patent.
smackfu 16y ago
Personally, I think the only options are PayPal or taking credit cards directly. Any other choice is just an obstacle to your customers, another account that they need to sign up for. Yes, people have Google accounts but do they have a credit card on file? The funny thing is that the competitors don't undercut PayPal. It's no wonder they aren't getting much traction.

gimmejimmy 16y ago

Here is another example of how PayPal is a bit shady: Sign into PayPal to send money. If you have a credit card as a payment method and a bank account as a payment method, PayPal will auto select your bank account. That's fine, except when you change your payment method from the default bank account to your credit card. A confirmation page comes up and tries to change your selection back to your bank account. There are two options: Use Bank Account / Use Credit Card. These options are randomly changed back and forth to confuse the user. Even the highlighting of these to option (which one is yellow) is randomized to make you accidently select the Bank Account option.

christonog 16y ago
Yes! I mainly use my credit card for everything online, including paypal, and that trick does get me on some occasions when I'm not paying close attention. It's probably a cost saving measure as credit cards most likely cost more to transact with than bank accounts.
- oasisbob 16y ago
  Indeed. ACH processing is dirt cheap. I also wouldn't be surprised if the terms of ACH transactions are more favorable to PayPal than those of MasterCard/VISA. The ACH system has very strict rules guaranteeing payments once they clear the network, as opposed to the more consumer friendly rules that the card networks offer. ACH, afterall, is meant to be used by financial institutions that know exactly what they're doing.
fuzzythinker 16y ago
Based on your description, your use of "a bit" is too generous.
Pistos2 16y ago
I recently sent a payment from my Paypal account to someone else's. I thought I specified that the payment should be taken out of the credit card source, and not the bank account source. I saw a success page, closed my browser tab, and thought nothing more of it. Later, I received an email indicating that the recent payment I made "failed" to get funded by the bank account, and that the credit card was used as a fallback.

pyre 16y ago

I think that PayPal has the same problem as many police departments. The police spend so much time dealing with criminals and looking for criminals, that soon everyone that isn't a police officer looks and feels like a criminal. PayPal seems to have the same issue with fraudsters. They spend the majority of their time dealing with fraud and looking for fraud (the good transactions are automated and therefore abstracted away from human eyes for the most part) that everything that comes across their desk looks like fraud and is treated as guilty until proven innocent (hey, just like the IRS!). The assumption probably is that 'the system' detects fraud and 'the system' is practically infallible, so when it flags something as fraud they need mountains of evidence to prove that 'the system' is wrong (because 'the system' is perfect, didn't you know?).

stevederico 16y ago

Congrats to wepay. Great job on seizing a customer in trouble and meeting their needs. There are plenty of other frustrated pay pal customers, this could be a great starting point for wepay. Go get em wepay

techsupporter 16y ago

My organization had this same problem. We formed a cooperative corporation, filed for tax exempt status, and then opened bank and PayPal accounts. Within 7 days of opening the PayPal account for our org, it was frozen on the grounds that extra documentation was needed. Before I could send those documents, PayPal then turned around and froze my personal account since the organization's account had my name as the "responsible party" contact. The resolution? There hasn't been one. I tried to get PayPal to accept our tax-exempt documents, but they've refused because we're not a 501(c)3 charity (we are 501(c)12) and both the org and my personal accounts stay frozen.

inc 16y ago

http://i.imgur.com/DaLcV.gif http://i.imgur.com/DaLcV.gif

techiferous 16y ago

My wife is organizing a conference using a non-profit and is going through the same PayPal headaches. This is extremely bad customer service. All PayPal has to do is (1) refuse to do business with non-profits or (2) present non-profits with an accurate description of what could happen (account freezing, etc.) before they sign-up. (Burying this in the terms of service doesn't count, by the way.) Customer service is as much about expectations as it is about delivering.

HeyLaughingBoy 16y ago

The bigger news here is that PayPal is getting more negative publicity in mainstream press and that will, over time, force them to become more responsive. A few hackers bitching in online forums is one thing, A large social media response in connection with a well known festival threatening to close accounts is going to be much more effective

miah_ 16y ago

I find it amusing that people still use Paypal. Its been widely documented that they're a horrible company for years now. I closed my account a few years ago and haven't looked back. Paypal will not change their ways so long as people keep giving them money. Paypal is not a bank and thus doesn't have to follow the same rules as a bank. Please people, quit treating it like its a bank. Do not store your money there. Do not link it to your primary checking or savings accounts. Remember! Paypal will cause you great pain and serious amounts of anger. Its only a matter of time.

miah_ 16y ago

InfinityX0 16y ago

This is ridiculous. PayPal is not some evil "big brother" - they are a company whose entire business model relies on stopping fraudulent activity, and as such, things like this often occur. Pick your poison - either have this happen on occasion, or have your money frequently stolen and more likely, be made essentially impossible to transfer safely on the web. I will take the occasional inconvenience in exchange for a payment method that makes my life much, much easier.

mironathetin 16y ago
You say it is only occasional inconvenience that Paypal freezes/keeps their clients money?
Gobiner 16y ago
I don't doubt that you'd accept the occasional inconvenience to other people. Try having your own money taken away from you and report back to us about the "inconvenience."

markbao 16y ago

PayPal is absolute trash for payment processing. Horror stories aplenty. Take the time to obtain a merchant account.

edj 16y ago

Reading this thread made me a little paranoid. So I logged into my high school reunion account (I'm the organizer) to withdraw the funds into our bank account, and lo!, of course there's a hold on one classmate's payment. That's $75 we may never see... at least not in time to pay our caterers and such.

Mistone 16y ago

seems like they folded to social pressure of the burner community which is vocal and well connected, but their change of heart was driven by wanting to further avoid a PR shit storm. Joe Q web company or individual has no chance of getting similar treatment.

donaq 16y ago

Wow, I did not know there was so much bad karma for Paypal. Does anyone know of alternatives for businesses not located in the US?

elblanco 16y ago

The tl;dr version, "Burning man defeats PayPal by routing around it."

cloudbrain 16y ago

This is why I withdraw all funds from PayPal every weekday morning. PayPal has been the sole payment solution for my software company for more than 5 years. 99% of all of my money, my families money and my employees salaries goes through PayPal. When I bought my first home (at the end of 2005, oops...) I had to call PayPal to get some financial details for the mortgage company. I spoke with a nice person on the phone from PayPal and they faxed me the documentation I needed write away. Every time a new payment processor comes on the scene I check them out, but none have been able to offer the pricing or features I get via PayPal. That being said. I have read all the horror stories. So I just assume that any money left in my PayPal account overnight could be potentially lost. No problem, I just withdraw it every morning so my lost potential is always minimal (a few grand). I don't de recurring subscriptions. I imagine things would be different then. If I did subscriptions I think I would want my own merchant account - you want to own as much of the customer as you can.