Pass on Paypal January 18, 2008
People ask us all the time if we accept Paypal. We don’t. Of course the next question is, “why not?” This article from the Wall Street Journal contains the reason:
You’ll Get Weaker Protections. Security is frequently touted as one of the upsides to alternate-payment programs. After all, there is no credit-card number to steal. “But that means you won’t have the same protections as if you were paying with a credit card,” said Consumer Federation’s Ms. Grant. “[Fraud] coverage is extremely limited, and whatever protections the service does give you are voluntary.”
I’m not singling out Paypal here; it’s simply the most popular example of an unregulated financial institution. They are not bound by the same laws as banks and consumers do not enjoy the protection of FDIC insurance or credit card liability limitations. While the risk is low, it would be a critical condition if you’re an event organizer with $10,000 of invoices and a frozen Paypal account.
Here at MotorsportReg.com, we’ll continue to accept good old fashioned, guaranteed payment so organizers don’t have to worry about their bank account going dry. We pay out every two weeks via direct deposit whether you’re due $1 or $100,000. Like clockwork!
Update Jan 24th: Paypal freezes Ron Paul donations. Yikes!
December 13th, 2010 at 8:44 pm
Paypal came up today on a local mailing list I read and I thought I’d share what’s going on with Paypal since this article was written. Here’s what one long-term seller just received:
“Starting Dec/11/2010, money from payments you receive will be placed in a pending balance for up to 21days. By doing this, we’re making sure that there’s enough money in your account to cover potential refunds or claims.
Even though you can’t access the money right away, please ship orders quickly and communicate with your customers. After 21 days, you can withdraw money from each payment as long as the customer hasn’t filed a dispute, chargeback, claim, return, or reversal.”
Gotta love that! Keep shipping your product in a timely fashion but don’t expect to get paid for an extra 3 weeks!
Another user got slapped with cash advance fees as the payee too:
“Paypal did something awesome to me. They pulled a cash advance off one of
my credit cards to cover a balance, because UPS doubled the cost for a shipment that was 1″ larger than indicated. UPS billed paypal and paypal decided to fund it by pulling a cash advance off a credit card, despite it being a normal charge.
This meant that despite me paying off my balance monthly, I have an interest charge now on the entire balance, since cash advances are interest earning no matter when it happens.”
We’ve said it before and we’ll say it again; *most* of the time Paypal works just fine. It’s when it doesn’t that the lack of a proper remediation channel makes it completely unsuitable for any serious use.
December 6th, 2011 at 10:10 am
Another arbitrary action by Paypal where they keep lots of fees but make the lives of their merchant difficult. Oh, and this time, you can use Paypal to help sick kittens but not poor people (you can’t make this up…):
http://www.regretsy.com/2011/12/05/cats-1-kids-0/