5 ms·

PayPal: 'Aggressive changes' coming to frozen funds policy

39 points by michaelhoffman 14y ago

olefoo 14y ago
It's about time. I do wonder to what extent the brand damage already done will be a drag on their usage numbers.
AlexMuir 14y ago
"We're at risk from upstarts in every sector of our business. Developers hate us." "All hands on deck! We've got to get the communications team together and put out the best damn press release we've ever done." "But we don't have anything to announce." "Just announce that we'll be making an announcement soon. An aggressive announcement." "Ok, I'll put it in with the cheque for our last batch of commercials - that should ensure we get prominent coverage and see off the likes of Stripe - I'd like to see them get an empty press release onto CNN.com this fast."
- DannyBee 14y ago
  Close. The aggressive change they are making is, in fact, the press. IE Paypal is making aggressive changes (in how they communicate to the press that they think they've done nothing wrong)
  - rhizome 14y ago
    To their credit, they didn't use the word "terrorist," once.
- deleted 14y ago
  [deleted]
wereHamster 14y ago
The article doesn't mention Bitcoin as an alternative :(
- fnordfnordfnord 14y ago
  That's because it's a commercial for Paypal.
- superuser2 14y ago
  That's because Bitcoin is an alternative currency and Paypal is a credit card processor. Until all of our mothers are comfortable with and capable of exchanging USD to Bitcoin and then paying with it (as well as paying the BTC exchange's percentage in addition to the purchase price of what they're buying), Bitcoin is not an alternative to traditional USD credit card processors and should not be treated as one.
JulianWasTaken 14y ago
This is great news. Not because I care at all about PayPal's practices anymore, but because it might mean that enough people have joined the backlash and boycott to make PayPal take notice.
Silhouette 14y ago
To save everyone the trouble... This article is just a PR parrot piece, with no real substance or timelines beyond "aggressive changes" and "the next several months". It just feels like a desperate attempt to convince potential clients not to go with competing services for a bit longer, like the new guy who took over at the top, showed up in person on a few on-line forums to say positive-sounding things, and then disappeared without trace. Amusingly, the PR rep quoted in this article actually seems quite proud that when they screw up and freeze an innocent client's account and then demand a bunch of non-existent and inappropriate records to release the funds, the client won't be expected to submit them in the mail any more.
- rhizome 14y ago
  What are good alternatives? I'm considering taking online payments for my freelancing work, but I'm gunshy that it could kill my cashflow without recourse if a company acted toward me like PayPal often does to others.
  - Silhouette 14y ago
    It depends a lot on where you are. You might find this HN discussion from a few hours ago interesting: http://news.ycombinator.com/item?id=5091069 http://news.ycombinator.com/item?id=5091069
  - billclerico 14y ago
    bill from wepay here. we're very interested in payments for service providers like freelancers & I would love to hear your thoughts on our invoicing, virtual terminal & payment button tools and if they'd be a good fit for your use case. [my firstname at wepay.com]
mtgx 14y ago
What about their arbitrary policies about freezing certain types of businesses' funds or not allowing them to operate using Paypal because they don't like them - like say if you sell a certain type of books?
yuhong 14y ago
I still remember this: http://news.ycombinator.com/item?id=4494216 http://news.ycombinator.com/item?id=4494216
coderdude 14y ago
I'd wager that most of the people you see bagging on PayPal have: 1) Never used them in a business capacity 2) Have only read horror stories 3) Take those stories at face value The horror stories usually have an obvious, "duh" kind of reasoning behind them when you step back and think about it from PayPal's point of view. Big influx of sales out of nowhere? That's a flagging. Accepting money for some kind of charity? That's a flagging. I'm very satisfied with their service. They work to protect your money, your customers' money, and their reputation. If you're an entrepreneur and you aren't sure what payment processor to go with, don't exclude PayPal from consideration.
- dangrossman 14y ago
  I've been taking payments with PayPal for 13 years this June. I feel exactly the same. Not only has their service and support always been excellent for me, they're by far the most economical option, at first glance (the effective transaction rate is lower than any other 3rd party processor, or the 3 traditional merchant account providers I've used), and on closer scrutiny (the fraud screening and dispute resolution mean I keep more of the money I get paid through PayPal than by credit card directly).
  - coderdude 14y ago
    That's a lot longer than I've been using them so it's good to hear that I've backed the right horse. The reduced fees for volume processing can save you a decent amount of money over time (2.2% vs. 2.9%). I also like that I'm not restricted to only PayPal users but can also accept credit card and eCheck payments as well.
  - ROFISH 14y ago
    I agree with this sentiment for having over 4 years of heavy use. They have plenty of things that need updating (slow history, API sucks), but at least I get great support if I have trouble and need to call. The 2.2% fees aren't bad; not a great rate either, but it's keeping me from moving to Stripe, which has worse fees. Note that I have a traditional ecommerce store who sells real physical items.
- 14y ago
elchief 14y ago
so, Stripe is eating their lunch then...
- jayfuerstenberg 14y ago
  Too little too late for Paypal. This was always the most pressing problem they've always continued to ignore and now their hubris is going to hurt them. I hope Stripe buries them and I hope this case is taught in business schools the world over.
cdvonstinkpot 14y ago
I hope to see a follow up with details on what exactly they've done, in the near future.
jakejake 14y ago
I find this quote from the article ironic: "Nayar said he can't go into specifics about what will change, but transparency is a major focus."
- skot9000 14y ago
  Having dealt (attempted to deal) with PayPal after my 10 year old account was randomly frozen, I have come to the conclusion the PayPal is run by robots. Poorly programmed robots.
flxmglrb 14y ago
This is literally more than a decade overdue. The very first "sucks" site I ever heard of was none other than paypalsucks.com way back in the early 2000s, and even at that time it heavily documented this and many other issues with PayPal's service. Awesome response time guys!
DiabloD3 14y ago
Too little too late. Bitcoin already won (and for those naysayers that think Bitcoin will never win, theres at least three popular Paypal clones out there too)
- jfoster 14y ago
  I'm not going to say that Bitcoin will never win, but why do you think Bitcoin has already won? I've never even seen it as an available payment method on a site, and people employed outside of the tech industry generally haven't heard of it.
  - MacsHeadroom 14y ago
    Three of the top 1000 websites in the world started accepting bitcoins in the past few months--most notably Wordpress. http://www.thebitcointrader.com/2011/12/bitcoin-bounty-ladder.html http://www.thebitcointrader.com/2011/12/bitcoin-bounty-ladde... Thousands of other sites and hundreds of real life locations accept bitcoins--many exclusively. I get unsolicited questions about Bitcoin from non-tech people who see my posts about it just about every day. The coming Bitcoin update is specifically meant to make Bitcoin much more non-tech friendly. I greatly anticipate swaths of non-tech users buying in very soon. I think it's a little early to say Bitcoin has "won" against Paypal when the BTC market cap only just recently broke $200 Million USD. But it is certainly here to stay. Bitcoin's exponentially increasing global adoption rate all but ensures that it will be around for a long time to come.
  - deleted 14y ago
    [deleted]
DigitalSea 14y ago
I feel like we've heard this all before countless times. Paypal has been poorly managed for a very long time. Their dictator like ways of, "We're freezing your account and keeping your money unless you send us all of your receipts proving all transactions are legitimate" have screwed so many over the years. I think it's a little too late to repair Paypal's image, the customer support staff are the least human like support staff I've ever dealt with. All responses from Paypal customer support are copied and pasted, 99% of the time ignoring what you've actually typed out. Maybe they should fix that problem while they're there. I seriously doubt these aggressive changes will change anything, if they do it will probably only reduce the number of incorrectly frozen accounts by a small percentage. Paypal will always be brought down by their uneducated, non-compassionate customer support staff and their horrible policies. While my experience with them on a business level has been somewhat limited (I do have a business premier pro account) and I myself haven't had any serious issues, I've been through the frozen funds thing before but came out unscathed although after digging through the crappy support and finally getting someone with enough drive and compassionate to ensure my problems were resolved. The number one problem isn't the policies, because a lot of people have nothing but good experiences with Paypal it's their staff, the people on the front-line who ensure your queries are appropriately directed and brought to the attention of the right people internally to solve your problem, these staff are misinterpreting policies and not listening. Another tolerable problem is Paypal's API: it feels archaic and pretty poor in comparison to other payment competitors with much nicer JSON API's and support for Javascript payments processing like Square. Paypal really need to step up their game, they've still got a chance considering the deep integration into Gumtree and eBay.
nonamegiven 14y ago
It's been so long that paypal has had their reputation, I can't imagine using their services based on a statement from paypal. paypal and godaddy -- I mean, come on, why would you if you didn't have to?
- Karunamon 14y ago
  Because you use eBay, because they're the 1000lb gorilla that everybody knows. And, because they're the biggest host out there, because their prices are actually really good, because they're the 1000lb gorilla that everybody knows.
stickydink 14y ago
The one thing they don't say in this article is that they will be even attempting to reduce the number of frozen accounts. Instead, just make it a clearer process to get out of. If they stopped doing seemingly arbitrary freezes, this would solve both problems.

It's about time. I do wonder to what extent the brand damage already done will be a drag on their usage numbers.

"We're at risk from upstarts in every sector of our business. Developers hate us." "All hands on deck! We've got to get the communications team together and put out the best damn press release we've ever done." "But we don't have anything to announce." "Just announce that we'll be making an announcement soon. An aggressive announcement." "Ok, I'll put it in with the cheque for our last batch of commercials - that should ensure we get prominent coverage and see off the likes of Stripe - I'd like to see them get an empty press release onto CNN.com this fast."

DannyBee 14y ago
Close. The aggressive change they are making is, in fact, the press. IE Paypal is making aggressive changes (in how they communicate to the press that they think they've done nothing wrong)
- rhizome 14y ago
  To their credit, they didn't use the word "terrorist," once.
deleted 14y ago
[deleted]

wereHamster 14y ago

The article doesn't mention Bitcoin as an alternative :(

fnordfnordfnord 14y ago
That's because it's a commercial for Paypal.
superuser2 14y ago
That's because Bitcoin is an alternative currency and Paypal is a credit card processor. Until all of our mothers are comfortable with and capable of exchanging USD to Bitcoin and then paying with it (as well as paying the BTC exchange's percentage in addition to the purchase price of what they're buying), Bitcoin is not an alternative to traditional USD credit card processors and should not be treated as one.

JulianWasTaken 14y ago

This is great news. Not because I care at all about PayPal's practices anymore, but because it might mean that enough people have joined the backlash and boycott to make PayPal take notice.

Silhouette 14y ago

To save everyone the trouble... This article is just a PR parrot piece, with no real substance or timelines beyond "aggressive changes" and "the next several months". It just feels like a desperate attempt to convince potential clients not to go with competing services for a bit longer, like the new guy who took over at the top, showed up in person on a few on-line forums to say positive-sounding things, and then disappeared without trace. Amusingly, the PR rep quoted in this article actually seems quite proud that when they screw up and freeze an innocent client's account and then demand a bunch of non-existent and inappropriate records to release the funds, the client won't be expected to submit them in the mail any more.

rhizome 14y ago
What are good alternatives? I'm considering taking online payments for my freelancing work, but I'm gunshy that it could kill my cashflow without recourse if a company acted toward me like PayPal often does to others.
- Silhouette 14y ago
  It depends a lot on where you are. You might find this HN discussion from a few hours ago interesting: http://news.ycombinator.com/item?id=5091069 http://news.ycombinator.com/item?id=5091069
- billclerico 14y ago
  bill from wepay here. we're very interested in payments for service providers like freelancers & I would love to hear your thoughts on our invoicing, virtual terminal & payment button tools and if they'd be a good fit for your use case. [my firstname at wepay.com]

mtgx 14y ago

What about their arbitrary policies about freezing certain types of businesses' funds or not allowing them to operate using Paypal because they don't like them - like say if you sell a certain type of books?

yuhong 14y ago

I still remember this: http://news.ycombinator.com/item?id=4494216 http://news.ycombinator.com/item?id=4494216

coderdude 14y ago

I'd wager that most of the people you see bagging on PayPal have: 1) Never used them in a business capacity 2) Have only read horror stories 3) Take those stories at face value The horror stories usually have an obvious, "duh" kind of reasoning behind them when you step back and think about it from PayPal's point of view. Big influx of sales out of nowhere? That's a flagging. Accepting money for some kind of charity? That's a flagging. I'm very satisfied with their service. They work to protect your money, your customers' money, and their reputation. If you're an entrepreneur and you aren't sure what payment processor to go with, don't exclude PayPal from consideration.

dangrossman 14y ago
I've been taking payments with PayPal for 13 years this June. I feel exactly the same. Not only has their service and support always been excellent for me, they're by far the most economical option, at first glance (the effective transaction rate is lower than any other 3rd party processor, or the 3 traditional merchant account providers I've used), and on closer scrutiny (the fraud screening and dispute resolution mean I keep more of the money I get paid through PayPal than by credit card directly).
- coderdude 14y ago
  That's a lot longer than I've been using them so it's good to hear that I've backed the right horse. The reduced fees for volume processing can save you a decent amount of money over time (2.2% vs. 2.9%). I also like that I'm not restricted to only PayPal users but can also accept credit card and eCheck payments as well.
- ROFISH 14y ago
  I agree with this sentiment for having over 4 years of heavy use. They have plenty of things that need updating (slow history, API sucks), but at least I get great support if I have trouble and need to call. The 2.2% fees aren't bad; not a great rate either, but it's keeping me from moving to Stripe, which has worse fees. Note that I have a traditional ecommerce store who sells real physical items.
14y ago

elchief 14y ago

so, Stripe is eating their lunch then...

jayfuerstenberg 14y ago
Too little too late for Paypal. This was always the most pressing problem they've always continued to ignore and now their hubris is going to hurt them. I hope Stripe buries them and I hope this case is taught in business schools the world over.

cdvonstinkpot 14y ago

I hope to see a follow up with details on what exactly they've done, in the near future.

jakejake 14y ago

I find this quote from the article ironic: "Nayar said he can't go into specifics about what will change, but transparency is a major focus."

skot9000 14y ago
Having dealt (attempted to deal) with PayPal after my 10 year old account was randomly frozen, I have come to the conclusion the PayPal is run by robots. Poorly programmed robots.

flxmglrb 14y ago

This is literally more than a decade overdue. The very first "sucks" site I ever heard of was none other than paypalsucks.com way back in the early 2000s, and even at that time it heavily documented this and many other issues with PayPal's service. Awesome response time guys!

DiabloD3 14y ago

Too little too late. Bitcoin already won (and for those naysayers that think Bitcoin will never win, theres at least three popular Paypal clones out there too)

jfoster 14y ago
I'm not going to say that Bitcoin will never win, but why do you think Bitcoin has already won? I've never even seen it as an available payment method on a site, and people employed outside of the tech industry generally haven't heard of it.
- MacsHeadroom 14y ago
  Three of the top 1000 websites in the world started accepting bitcoins in the past few months--most notably Wordpress. http://www.thebitcointrader.com/2011/12/bitcoin-bounty-ladder.html http://www.thebitcointrader.com/2011/12/bitcoin-bounty-ladde... Thousands of other sites and hundreds of real life locations accept bitcoins--many exclusively. I get unsolicited questions about Bitcoin from non-tech people who see my posts about it just about every day. The coming Bitcoin update is specifically meant to make Bitcoin much more non-tech friendly. I greatly anticipate swaths of non-tech users buying in very soon. I think it's a little early to say Bitcoin has "won" against Paypal when the BTC market cap only just recently broke $200 Million USD. But it is certainly here to stay. Bitcoin's exponentially increasing global adoption rate all but ensures that it will be around for a long time to come.
- deleted 14y ago
  [deleted]

DigitalSea 14y ago

I feel like we've heard this all before countless times. Paypal has been poorly managed for a very long time. Their dictator like ways of, "We're freezing your account and keeping your money unless you send us all of your receipts proving all transactions are legitimate" have screwed so many over the years. I think it's a little too late to repair Paypal's image, the customer support staff are the least human like support staff I've ever dealt with. All responses from Paypal customer support are copied and pasted, 99% of the time ignoring what you've actually typed out. Maybe they should fix that problem while they're there. I seriously doubt these aggressive changes will change anything, if they do it will probably only reduce the number of incorrectly frozen accounts by a small percentage. Paypal will always be brought down by their uneducated, non-compassionate customer support staff and their horrible policies. While my experience with them on a business level has been somewhat limited (I do have a business premier pro account) and I myself haven't had any serious issues, I've been through the frozen funds thing before but came out unscathed although after digging through the crappy support and finally getting someone with enough drive and compassionate to ensure my problems were resolved. The number one problem isn't the policies, because a lot of people have nothing but good experiences with Paypal it's their staff, the people on the front-line who ensure your queries are appropriately directed and brought to the attention of the right people internally to solve your problem, these staff are misinterpreting policies and not listening. Another tolerable problem is Paypal's API: it feels archaic and pretty poor in comparison to other payment competitors with much nicer JSON API's and support for Javascript payments processing like Square. Paypal really need to step up their game, they've still got a chance considering the deep integration into Gumtree and eBay.

nonamegiven 14y ago

It's been so long that paypal has had their reputation, I can't imagine using their services based on a statement from paypal. paypal and godaddy -- I mean, come on, why would you if you didn't have to?

Karunamon 14y ago
Because you use eBay, because they're the 1000lb gorilla that everybody knows. And, because they're the biggest host out there, because their prices are actually really good, because they're the 1000lb gorilla that everybody knows.

stickydink 14y ago

The one thing they don't say in this article is that they will be even attempting to reduce the number of frozen accounts. Instead, just make it a clearer process to get out of. If they stopped doing seemingly arbitrary freezes, this would solve both problems.