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Re: PayPal, the problem is that it is a nightmare for merchants but convenient for many consumers. On the merchant side, it’s only a matter of time before the

Re: PayPal, the problem is that it is a nightmare for merchants but convenient for many consumers. On the merchant side, it’s only a matter of time before the account gets frozen (at least temporarily) and funds held for up to six months. It’s just what they do, seemingly regardless of chargeback rates or other risk indicators. One other problem with offering PayPal as an option for a technical product/service isn’t as obvious, but is just as important. In my experience, the kind of skeptical user that insists on using PayPal because they don’t trust a given site with their credit card information tends to be more trouble than they are worth. They tend to require far higher levels of customer support than average, and will often eventually request a refund anyway because they have unrealistic expectations of either the product or its support. Also, many PayPal users abuse the deference that company pays to consumers when the consumer initiates even the most absurd dispute, and use the service with an eye toward disputing the charge from the outset. In short, for a technical product/service, those that would insist on PayPal are the PIA (pain in the ass) type customers you should avoid at all costs anyway. If someone emails you asking why you don’t accept PayPal, remind them that all major credit/debit card issuers offer generous $0 fraud liability programs and move on with your life. Don’t go down the PayPal rabbit hole, as you will be sure to regret it in one way or another.

rf15 9y ago
Happy paypal user here; don't like handing out credit card info and never contacted customer support or requested a refund of companies I dealt with. Don't give in to stereotypes so easily and do not call part of your customer base a pia just because they want support for an exceedingly common payment service.
- downandout 9y ago
  I am referring not just to PayPal users, but those that would refuse to pay a given site for a service they need unless they offer PayPal. The combination of being a “difficult” customer along with the risks of using PayPal in general simply make it not worth it to allow those people to become customers. You may be an exception to the rule, but overall it’s simply a losing proposition for the merchant.
  - hutzlibu 9y ago
    The world is maybe bigger and more diverse, than the bubble you know. Here in germany for example, much more people have PayPal, than a credit card. So what should those people do, if they want to use your service? Getting a CC, just for you? Then your service must be really good. I am also only now finally getting one, but because of flights, otherwise I never needed one.
    - JoeAltmaier 9y ago
      Wow, that's very true! https://www.usatoday.com/story/news/world/2015/07/16/germans-love-cash-and-suspicious--credit-debt/30230061/ https://www.usatoday.com/story/news/world/2015/07/16/germans... Only 32% of Germans even own a credit card. The average German uses on only 39 times a year (I use mine that many times a month or more).
      - hutzlibu 9y ago
        I guess it is because we have a different system, called EC Card. (or does the US also have it?) So we also pay with card mostly, just use a different system.
        ensignavenger 9y ago
        In the US they are called Debit cards, so yeah, we have something similar. But our debit cards are usually part of either the Visa or MasterCard networks, so they act pretty similar (different fee structures sometimes) as far as merchants are concerned.
    - downandout 9y ago
      You may not have a credit card, but I'm willing to bet you have debit cards that can be used in lieu of PayPal.
      - kuschku 9y ago
        Germany has debit cards, but the German debit card system is entirely incompatible with the VISA/MasterCard system.
nicky0 9y ago
Re. frozen funds. As a merchant it is important to sweep the account regularly (daily/weekly) and avoid building up large balances.
- downandout 9y ago
  Yeah, but the problem is that once they freeze an account, one of two things happens: 1) They only suspend withdrawals, which means payments continue to go in and all of that money is also held unless and until PayPal releases it. Or 2) They suspend both incoming payments and withdrawals. In this case, you’re back at square one, plus you’ve wasted the PayPal implementation time, plus they are withholding whatever funds you had when they arbitrarily decided to suspend the account. If your customers have recurring payments setup when this happens (as is the case with most SaaS companies), you’ve lost all of those customers, likely for good, because you have to contact them, explain that your PayPal account was shutdown, and then try to get them to give you a credit card directly. Further, until you realize that they have suspended incoming payments and disable PayPal on your site, customers trying to pay you receive an error message from PayPal, and you’ve likely lost each and every one of those customers for good as well - regardless of the payment methods you offer. So again, PayPal and many of its customers are nightmares.
  - HeyLaughingBoy 9y ago
    You do realize that this can happen with any merchant gateway, don't you?
    - jkaplowitz 9y ago
      PayPal has a worse track record than most widely known alternatives. And at least in the US, they're less regulated than the banks from which one typically obtains merchant accounts. These two facts together are a bad combo. I believe they are regulated as a bank in the EU. That said, their EU head office is in Luxembourg, which along with Ireland is one of the most pro-corporate locations they could have chosen and one of the least likely to take a pro-consumer stance where EU law allows them discretion.
icebraining 9y ago
It might be $0, but it's not free; it costs time to regularly check your extract and pore over every line. Frankly, I own a CC, yet I won't give it on any random site. Thankfully my bank also provides free virtual CCs with fixed limits, but otherwise, it's Paypal or I'll bail out.
HeyLaughingBoy 9y ago
As a general rule, I subscribe to the theory that businesses should make it as easy as possible for people to give them money! Most of my business is billed through online invoices: PayPal makes it trivial for me to email an invoice to someone and have it paid by their credit card. So trivial in fact, that every time I've looked into switching, I've found no reason to. Also, I'm finding that more and more customers are in locations where PayPal is more accessible than credit cards. YMMV but in the 10 years or so that I've been taking PayPal, I can't think of a single bad thing to say about it.

rf15 9y ago

Happy paypal user here; don't like handing out credit card info and never contacted customer support or requested a refund of companies I dealt with. Don't give in to stereotypes so easily and do not call part of your customer base a pia just because they want support for an exceedingly common payment service.

downandout 9y ago
I am referring not just to PayPal users, but those that would refuse to pay a given site for a service they need unless they offer PayPal. The combination of being a “difficult” customer along with the risks of using PayPal in general simply make it not worth it to allow those people to become customers. You may be an exception to the rule, but overall it’s simply a losing proposition for the merchant.
- hutzlibu 9y ago
  The world is maybe bigger and more diverse, than the bubble you know. Here in germany for example, much more people have PayPal, than a credit card. So what should those people do, if they want to use your service? Getting a CC, just for you? Then your service must be really good. I am also only now finally getting one, but because of flights, otherwise I never needed one.
  - JoeAltmaier 9y ago
    Wow, that's very true! https://www.usatoday.com/story/news/world/2015/07/16/germans-love-cash-and-suspicious--credit-debt/30230061/ https://www.usatoday.com/story/news/world/2015/07/16/germans... Only 32% of Germans even own a credit card. The average German uses on only 39 times a year (I use mine that many times a month or more).
    - hutzlibu 9y ago
      I guess it is because we have a different system, called EC Card. (or does the US also have it?) So we also pay with card mostly, just use a different system.
      - ensignavenger 9y ago
        In the US they are called Debit cards, so yeah, we have something similar. But our debit cards are usually part of either the Visa or MasterCard networks, so they act pretty similar (different fee structures sometimes) as far as merchants are concerned.
  - downandout 9y ago
    You may not have a credit card, but I'm willing to bet you have debit cards that can be used in lieu of PayPal.
    - kuschku 9y ago
      Germany has debit cards, but the German debit card system is entirely incompatible with the VISA/MasterCard system.

nicky0 9y ago

Re. frozen funds. As a merchant it is important to sweep the account regularly (daily/weekly) and avoid building up large balances.

downandout 9y ago
Yeah, but the problem is that once they freeze an account, one of two things happens: 1) They only suspend withdrawals, which means payments continue to go in and all of that money is also held unless and until PayPal releases it. Or 2) They suspend both incoming payments and withdrawals. In this case, you’re back at square one, plus you’ve wasted the PayPal implementation time, plus they are withholding whatever funds you had when they arbitrarily decided to suspend the account. If your customers have recurring payments setup when this happens (as is the case with most SaaS companies), you’ve lost all of those customers, likely for good, because you have to contact them, explain that your PayPal account was shutdown, and then try to get them to give you a credit card directly. Further, until you realize that they have suspended incoming payments and disable PayPal on your site, customers trying to pay you receive an error message from PayPal, and you’ve likely lost each and every one of those customers for good as well - regardless of the payment methods you offer. So again, PayPal and many of its customers are nightmares.
- HeyLaughingBoy 9y ago
  You do realize that this can happen with any merchant gateway, don't you?
  - jkaplowitz 9y ago
    PayPal has a worse track record than most widely known alternatives. And at least in the US, they're less regulated than the banks from which one typically obtains merchant accounts. These two facts together are a bad combo. I believe they are regulated as a bank in the EU. That said, their EU head office is in Luxembourg, which along with Ireland is one of the most pro-corporate locations they could have chosen and one of the least likely to take a pro-consumer stance where EU law allows them discretion.

icebraining 9y ago

It might be $0, but it's not free; it costs time to regularly check your extract and pore over every line. Frankly, I own a CC, yet I won't give it on any random site. Thankfully my bank also provides free virtual CCs with fixed limits, but otherwise, it's Paypal or I'll bail out.

HeyLaughingBoy 9y ago

As a general rule, I subscribe to the theory that businesses should make it as easy as possible for people to give them money! Most of my business is billed through online invoices: PayPal makes it trivial for me to email an invoice to someone and have it paid by their credit card. So trivial in fact, that every time I've looked into switching, I've found no reason to. Also, I'm finding that more and more customers are in locations where PayPal is more accessible than credit cards. YMMV but in the 10 years or so that I've been taking PayPal, I can't think of a single bad thing to say about it.