7 ms·

PayPal Rewards Some Users by Promising It Won't Hold Their Funds

58 points by iProject 14y ago

mparlane 14y ago
So much for just "PR talk" eh? Sounds like fixes are on the way. It's a start.
- Empro 14y ago
  Looks like this new president knows what he's doing. He may just end up stopping a wide-scale desertion.
  - yuhong 14y ago
    I was thinking that looking for CEOs from alternate sources is a good idea for a while now.
    - michaelt 14y ago
      Is it the new CEO, or is it that Stripe means Paypal actually have some competition?
      - jtheory 14y ago
        Both, I imagine. Though Stripe isn't yet a viable competitor for lots of businesses, because they haven't sorted out the international thing at all yet, but they're working on that (as PayPal well knows).
- protomyth 14y ago
  I was pretty negative in the previous thread, but it seems like this is more than just PR. I will see this weekend when a project I was helping with goes live (well, hopefully the cash will come).
dchuk 14y ago
I got one of these notices today. I'm also migrating my product over to Stripe for all new accounts moving forward in a couple of weeks. I know those two events aren't connected in any way, but I wonder if they're starting to feel the heat a bit now that there are more viable alternatives out there for easy subscription payment collection...
- joelrunyon 14y ago
  I'm using stripe & paypal for a new project. Absolutely LOVE stripe, but there's about 40% of people who prefer paying with paypal so I keep it around. Really nice to not have to rely on it anymore though.
MBCook 14y ago
That could easily be an Onion headline. I hope they continue with this. They were the only game in town for so long (short of getting a full merchant account) that they didn't have to bother to fix these kinds of issues.
dangrossman 14y ago
PayPal's had for years a policy of not holding funds of well-established accounts with a good history. Either this is a broadening of that policy to more accounts, or a PR move to get more people to know about it. This text has appeared in my chargeback notices back to at least mid-2010: > Usually, when a buyer files a chargeback and the card issuer reverses the charge, we temporarily hold the funds until the issue is resolved. However, because of your low dispute rate and consistent sales volume, we're allowing you access to the funds while we investigate the chargeback. We want to extend this courtesy to our valued customers, because we know how inconvenient it can be to have your funds held. http://i.imgur.com/a35fP.png http://i.imgur.com/a35fP.png
- nhebb 14y ago
  A week ago I had funds held for a dispute and received this message from PayPal today. So it is a policy change, not just a PR move.
mzuvella 14y ago
'Won't hold their funds' is a reward? That should be the standard.
- dangrossman 14y ago
  That's not how chargebacks work and even PayPal doesn't have the ability to change that system. When someone charges back a PayPal payment, the funds are removed from PayPal's bank account and deposited to the cardholder's bank before PayPal even gets notified. Their allowing you to keep the payment until the dispute is decided is actually PayPal floating you a loan on faith that if you lose the dispute, you won't have disappeared along with your balance to reverse it then. Of course, for disputes only within the PayPal system, PayPal's a bit safer not immediately reversing the payment.
  - dsrtvnvc 14y ago
    Then why there isn't any opposition to chargebacks? In Europe we just use wire transfer for all electronic payment. It's instant and free. There is no such thing as chargeback.
    - wccrawford 14y ago
      Because part of PayPal's service to their customers is that you can dispute a transaction and they will work to resolve it. It's one of the features that protects (and therefore attracts) consumers. Clearly, it causes negatives for sellers. It's a trade-off.
    - dangrossman 14y ago
      Consumers want chargebacks. They let you get your money back when you get scammed or your payment information is stolen. Does that never happen in Europe? Nobody ever takes your money then fails to deliver the product/service? You never have your information stolen and used to pay for something you didn't authorize?
      - dsrtvnvc 14y ago
lincolnwebs 14y ago
For certain people in certain circumstances, they won't do the gobsmacking, business-killing thing they've been doing. It's not so much a step in the right direction as just tilting their head toward it.
Lasher 14y ago
I didn't get one of these emails, does that mean that Paypal are going to hold even more of my funds to cover the increased risk? Ouch :)
InclinedPlane 14y ago
Cue people whinging about a system they know almost nothing about. Why are there so few true paypal competitors? Because paypal makes it so difficult to compete against them with their stellar service and low fees? No, because it's a legitimately hard problem, and you can't really avoid doing what paypal does while still abiding by all the relevant laws and financial regulations.
circa 14y ago
ugh i'm so sick of PayPal and have been working with them for years. Its time to bail. We currently use it mainly for foreign transactions. Time to find something else.
- jtheory 14y ago
  Well, let us know what you find, then -- what rates, ease of setup, currencies supported, etc.. Regardless, I'm not sure why you'd say now is the time to bail, as opposed to any other time -- now that they're finally trying to fix some of the problems (effectively or not TBD, of course).
ComputerGuru 14y ago
This is going to be a largely unpopular opinion here, but PayPal actually works really hard to limit fraud. They froze my account and "robbed" me of around $2,000 dollars (and I complained about it here) maybe 2 years ago, holding that cash for around 8 months until I got them all the paperwork they needed (it had to do with a non-501c corporation accepting donations). But when you suddenly start making real money, the game completely changes. You start getting personal phone calls from real people, you have actual phone numbers that you can call, they contact you at your cell phone, and they tell you things like "Due to rule xyz, we would technically have to freeze your account, and the next time you log in, you'll message saying if you don't provide information a, b, and c, you'll get locked out of your account; don't worry, that's not going to happen, but please work with us to determine what we can do to meet our technical requirements for donations coming in to non-profit organizations" and "We've been noticing customers filing chargebacks, however we do recognize that your chargeback rate is far below the usual x% [I'm not allowed to disclose this number] so we'll just front you the money until we rule the dispute; we also noticed you're no longer bothering to dispute the chargebacks, is there a particular reason? Is there something we can do to help you improve the process?" You get personal phone calls like "We noticed your sales volume this month has dropped by x%, is there something we can do to help?" Basically, I have come from hating PayPal and searching desperately for an alternative, to recognizing that they are doing their best and working very hard on a very difficult problem. I have worked with startups that are loved here on HN that have tried to solve the same problems, and I must say that though I was initially impressed with their work, they did not know what they were getting into, and I now actually prefer that my customers check out via PayPal than via my credit card processor alternative that I initially set up to spite PayPal (but, of course, it's important to have both PayPal and a traditional credit card processor for checkout). EDIT Yes, of course. Downvote me for providing some insight that puts PayPal in a positive light. How dare I.
- Negitivefrags 14y ago
  I'm interested to know at what point Paypal starts doing this. We have around 100k per month of turnover through them and we don't seem to get any special treatment. In fact, they put a 40k fixed reserve on our account and a 10% 90 day rolling reserve as well. This is despite our chargeback rate being low. (The performance benchmark page reports 0.00%) That said, I do concur that Paypal is much better at preventing fraud. We get perhaps 1-2 chargebacks per week on Paypal and more like 10 per week using Stripe. This is also with us fairly aggressively refunding payments that we suspect are fraudulent on Stripe also.
46Bit 14y ago
This is how it should work. This is why people try to make friends with their bank manager: the working relationship helps the bank know who the hell they're dealing with, and so means they can communicate better and have goodwill. That PayPal should do the same is, if anything, good.
chris_wot 14y ago
Funny how allowing customers access to their own Funds is now considered a "reward"!
raverbashing 14y ago
A players hire A players, B players hire C players Likely or not? Maybe the new CEO just realized that and is fixing the house.
Rulero 14y ago
It seems like PayPal is starting to realise the mistakes they have committed, and they are trying to rectify them. Most importantly, PayPal know they are screwed. This reward isn't a reward, it's just an absurd incentive to prevent them losing their market share. This is just ridiculous, I don't see how liquidity of your funds is a a form of a reward, your funds should be liquid in the first place because it's your hard earned cash.

58 points by iProject 14y ago

mparlane 14y ago

So much for just "PR talk" eh? Sounds like fixes are on the way. It's a start.

Empro 14y ago
Looks like this new president knows what he's doing. He may just end up stopping a wide-scale desertion.
- yuhong 14y ago
  I was thinking that looking for CEOs from alternate sources is a good idea for a while now.
  - michaelt 14y ago
    Is it the new CEO, or is it that Stripe means Paypal actually have some competition?
    - jtheory 14y ago
      Both, I imagine. Though Stripe isn't yet a viable competitor for lots of businesses, because they haven't sorted out the international thing at all yet, but they're working on that (as PayPal well knows).
protomyth 14y ago
I was pretty negative in the previous thread, but it seems like this is more than just PR. I will see this weekend when a project I was helping with goes live (well, hopefully the cash will come).

dchuk 14y ago

I got one of these notices today. I'm also migrating my product over to Stripe for all new accounts moving forward in a couple of weeks. I know those two events aren't connected in any way, but I wonder if they're starting to feel the heat a bit now that there are more viable alternatives out there for easy subscription payment collection...

joelrunyon 14y ago
I'm using stripe & paypal for a new project. Absolutely LOVE stripe, but there's about 40% of people who prefer paying with paypal so I keep it around. Really nice to not have to rely on it anymore though.

MBCook 14y ago

That could easily be an Onion headline. I hope they continue with this. They were the only game in town for so long (short of getting a full merchant account) that they didn't have to bother to fix these kinds of issues.

dangrossman 14y ago

PayPal's had for years a policy of not holding funds of well-established accounts with a good history. Either this is a broadening of that policy to more accounts, or a PR move to get more people to know about it. This text has appeared in my chargeback notices back to at least mid-2010: > Usually, when a buyer files a chargeback and the card issuer reverses the charge, we temporarily hold the funds until the issue is resolved. However, because of your low dispute rate and consistent sales volume, we're allowing you access to the funds while we investigate the chargeback. We want to extend this courtesy to our valued customers, because we know how inconvenient it can be to have your funds held. http://i.imgur.com/a35fP.png http://i.imgur.com/a35fP.png

nhebb 14y ago
A week ago I had funds held for a dispute and received this message from PayPal today. So it is a policy change, not just a PR move.

mzuvella 14y ago

'Won't hold their funds' is a reward? That should be the standard.

dangrossman 14y ago
That's not how chargebacks work and even PayPal doesn't have the ability to change that system. When someone charges back a PayPal payment, the funds are removed from PayPal's bank account and deposited to the cardholder's bank before PayPal even gets notified. Their allowing you to keep the payment until the dispute is decided is actually PayPal floating you a loan on faith that if you lose the dispute, you won't have disappeared along with your balance to reverse it then. Of course, for disputes only within the PayPal system, PayPal's a bit safer not immediately reversing the payment.
- dsrtvnvc 14y ago
  Then why there isn't any opposition to chargebacks? In Europe we just use wire transfer for all electronic payment. It's instant and free. There is no such thing as chargeback.
  - wccrawford 14y ago
    Because part of PayPal's service to their customers is that you can dispute a transaction and they will work to resolve it. It's one of the features that protects (and therefore attracts) consumers. Clearly, it causes negatives for sellers. It's a trade-off.
  - dangrossman 14y ago
    Consumers want chargebacks. They let you get your money back when you get scammed or your payment information is stolen. Does that never happen in Europe? Nobody ever takes your money then fails to deliver the product/service? You never have your information stolen and used to pay for something you didn't authorize?
    - dsrtvnvc 14y ago

lincolnwebs 14y ago

For certain people in certain circumstances, they won't do the gobsmacking, business-killing thing they've been doing. It's not so much a step in the right direction as just tilting their head toward it.

Lasher 14y ago

I didn't get one of these emails, does that mean that Paypal are going to hold even more of my funds to cover the increased risk? Ouch :)

InclinedPlane 14y ago

Cue people whinging about a system they know almost nothing about. Why are there so few true paypal competitors? Because paypal makes it so difficult to compete against them with their stellar service and low fees? No, because it's a legitimately hard problem, and you can't really avoid doing what paypal does while still abiding by all the relevant laws and financial regulations.

circa 14y ago

ugh i'm so sick of PayPal and have been working with them for years. Its time to bail. We currently use it mainly for foreign transactions. Time to find something else.

jtheory 14y ago
Well, let us know what you find, then -- what rates, ease of setup, currencies supported, etc.. Regardless, I'm not sure why you'd say now is the time to bail, as opposed to any other time -- now that they're finally trying to fix some of the problems (effectively or not TBD, of course).

ComputerGuru 14y ago

This is going to be a largely unpopular opinion here, but PayPal actually works really hard to limit fraud. They froze my account and "robbed" me of around $2,000 dollars (and I complained about it here) maybe 2 years ago, holding that cash for around 8 months until I got them all the paperwork they needed (it had to do with a non-501c corporation accepting donations). But when you suddenly start making real money, the game completely changes. You start getting personal phone calls from real people, you have actual phone numbers that you can call, they contact you at your cell phone, and they tell you things like "Due to rule xyz, we would technically have to freeze your account, and the next time you log in, you'll message saying if you don't provide information a, b, and c, you'll get locked out of your account; don't worry, that's not going to happen, but please work with us to determine what we can do to meet our technical requirements for donations coming in to non-profit organizations" and "We've been noticing customers filing chargebacks, however we do recognize that your chargeback rate is far below the usual x% [I'm not allowed to disclose this number] so we'll just front you the money until we rule the dispute; we also noticed you're no longer bothering to dispute the chargebacks, is there a particular reason? Is there something we can do to help you improve the process?" You get personal phone calls like "We noticed your sales volume this month has dropped by x%, is there something we can do to help?" Basically, I have come from hating PayPal and searching desperately for an alternative, to recognizing that they are doing their best and working very hard on a very difficult problem. I have worked with startups that are loved here on HN that have tried to solve the same problems, and I must say that though I was initially impressed with their work, they did not know what they were getting into, and I now actually prefer that my customers check out via PayPal than via my credit card processor alternative that I initially set up to spite PayPal (but, of course, it's important to have both PayPal and a traditional credit card processor for checkout). EDIT Yes, of course. Downvote me for providing some insight that puts PayPal in a positive light. How dare I.

Negitivefrags 14y ago
I'm interested to know at what point Paypal starts doing this. We have around 100k per month of turnover through them and we don't seem to get any special treatment. In fact, they put a 40k fixed reserve on our account and a 10% 90 day rolling reserve as well. This is despite our chargeback rate being low. (The performance benchmark page reports 0.00%) That said, I do concur that Paypal is much better at preventing fraud. We get perhaps 1-2 chargebacks per week on Paypal and more like 10 per week using Stripe. This is also with us fairly aggressively refunding payments that we suspect are fraudulent on Stripe also.

46Bit 14y ago

This is how it should work. This is why people try to make friends with their bank manager: the working relationship helps the bank know who the hell they're dealing with, and so means they can communicate better and have goodwill. That PayPal should do the same is, if anything, good.

chris_wot 14y ago

Funny how allowing customers access to their own Funds is now considered a "reward"!

raverbashing 14y ago

A players hire A players, B players hire C players Likely or not? Maybe the new CEO just realized that and is fixing the house.

Rulero 14y ago

It seems like PayPal is starting to realise the mistakes they have committed, and they are trying to rectify them. Most importantly, PayPal know they are screwed. This reward isn't a reward, it's just an absurd incentive to prevent them losing their market share. This is just ridiculous, I don't see how liquidity of your funds is a a form of a reward, your funds should be liquid in the first place because it's your hard earned cash.