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“Is PayPal good for your microISV business?” A short PayPal horror story

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Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#41

Post by Uchikoma »

josefresco wrote: post #9
robk wrote: post #2

Time and time again I've heard these PayPal horror stories (and at www.paypalsucks.com). I am very leery of PayPal and make it a point to always transfer any balance out immediately, as their freezes seem like a nightmare to deal with. I wish Google Checkout had a more compelling product, and that there were a better solution for C2C sales.

I've heard horror story after horror story and yet I've never had any issues with PayPal. I've stored money there, used their Visa/debit cart and even opted into their money market option and made some money (off my money) for several years. Factoring in anecdotal evidence like this (or mine) always has risks. I'm sure you could find someone local who absolutely hates the bank you choose to have accounts with, but th…

I've read horror story after horror story of houses burned down.

I've been living in one for decades without any problems.

Factoring in anecdotal evidence like this (or mine) always has risks.

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#42

Post by jplewicke »

jsteele wrote: post #15

Sounds a lot like the various AdSense horror stories. A recent one: http://groups.google.com/group/android-discuss/browse_thread...

It's apparently very hard to scale any exchange system to exclude fraud and prevent false positives in a humane manner. AdSense, Paypal, Google Checkout, eGold, and Prosper.com have all failed to figure out how to do it reliably. You can throw fancy machine-learning techniques at the problem and isolate most of the unusual activity, but the problem then is how you filter that between fraudsters and the genuine good guys.

The basic problem is that if you're a low-margin Internet-scale transactional business, the marginal cost of distinguishing fraud from unusual non-fraud is higher than the marginal benefit from letting the transactions through. And if you're Paypal and you get the float on a bunch of locked funds without the need to following banking regulations, it's definitely not in your best interest to do.

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#43

Post by eli »

shin_lao wrote: post #29
sailormoon wrote: post #25

Earlier quoted context omitted.

.. only an electronic paper trail a mile long. Email is absolutely of legal value.

I'd like you to exhibit cases where e-mail was ok to grant a copyright permission. My lawyers always told me the following: everything formal must be fax, snail mail or signed with an electronic certificate (I declare and pay my taxes with the later for example). Copyright handover is not just "ok we're going to buy you 2 computers" kind of e-mail.

And I'd like you to point out the law that says all contracts have to be written. With a few specific exceptions, they don't.

Sure, you should get them in writing and signed to cover your ass, but an email contract is still perfectly valid in most cases. Just like a "handshake agreement" can be legally binding.

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#44

Post by jamroom »

pkrumins wrote: post #27
dfischer wrote: post #7

What's an alternative to PayPal then?

Guys in the article recommend FastSpring.

I use both PayPal and Fastspring as our payment processors (Fastspring is there to give customers an option besides paypal). Fastspring is excellent customer service, and their "springboard" interface is very nice. Fees are a bit high, but they do offer additional services on top of what you can get from PayPal.

I've built merchant processor plugins for several different systems (2checkout, worldpay, alertpay) and NONE have as nice of an API as PayPal (both regular IPN and their PayPal Pro NVP API).

We've been selling through PayPal for 7 years now without issue, and we usually process from 2 to 3 hundred transactions per month.

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#45

Post by trezor »

dhimes wrote: post #23
robk wrote: post #2

Time and time again I've heard these PayPal horror stories (and at www.paypalsucks.com). I am very leery of PayPal and make it a point to always transfer any balance out immediately, as their freezes seem like a nightmare to deal with. I wish Google Checkout had a more compelling product, and that there were a better solution for C2C sales.

Google isn't exactly easy when it comes to dispute resolution.

Does google even have non-automated solutions if you ever get in trouble?

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#46

Post by dpcan »

pkrumins wrote: post #14

Wondering if anyone has a success story with PayPal?

I've been using PayPal for 10 years without a single problem and I process many payments every week (varies week to week).

The problem is that MOST people have success stories, but it doesn't make for a very good blog post does it? One sentence nobody wants to read.

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#47

Post by [deleted] »

dhimes wrote: post #26
robk wrote: post #2

Time and time again I've heard these PayPal horror stories (and at www.paypalsucks.com). I am very leery of PayPal and make it a point to always transfer any balance out immediately, as their freezes seem like a nightmare to deal with. I wish Google Checkout had a more compelling product, and that there were a better solution for C2C sales.

I dug around a little. Apparently PayPal's problem is that some folks are selling pirated stuff (dvds, etc.), while advertising them as legit and using PayPal to do so. Under these circumstances they have to use any means they can to verify that the seller is legit and the software (whatever) is not pirated. Apparently they were trying to do this here, but a bunch of emails wouldn't cut it. I can actually understand…

[deleted]

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#48

Post by jasonlbaptiste »

I've dealt with this before, and it's absolutely ridiculous. Paypal should not be in business or allowed to operate. They go around acting as if they are "bank like", but in actual reality they do not have to adhere to bank standards. This means they can do things like this. I understand there are a lot of scammers and fraudsters out there. If they need to do something like this, they cannot make it a multiweek process that will most likely end up in you waiting 180 days for your money. They also need better communication with those that have had their accounts frozen. Using their system is utterly ridiculous and not being able to talk to the actual person making a decision is even worse. We're talking rightfully earned money that people rely upon to make a living, you can't screw around with a person's living like this. I see all these Paypal developer conferences and "developers love paypal" promotion going on, and I call complete fucking horseshit on it. There's no way a single dev or software company should go near your service with service+rules like this in place.

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#49

Post by shin_lao »

eli wrote: post #43
shin_lao wrote: post #29

Earlier quoted context omitted.

I'd like you to exhibit cases where e-mail was ok to grant a copyright permission. My lawyers always told me the following: everything formal must be fax, snail mail or signed with an electronic certificate (I declare and pay my taxes with the later for example). Copyright handover is not just "ok we're going to buy you 2 computers" kind of e-mail.

And I'd like you to point out the law that says all contracts have to be written. With a few specific exceptions, they don't. Sure, you should get them in writing and signed to cover your ass, but an email contract is still perfectly valid in most cases. Just like a "handshake agreement" can be legally binding.

Which country are you referring to? In France this is not the case. If there is a disagreement and nothing is written down you're screwed.

edit: I've checked up a bit. There is such a thing as "oral contract" in French law but it's very strict and limited to certain transactions.

The legal definition of contract doesn't say if it must be written or not (http://www.legifrance.gouv.fr/affichCodeArticle.do?cidTexte=...).

It's extremely rare (read: never) to start a work without a signed fax or letter which basically says "ok, go ahead for that price".

That goes from a plumber who's going to fix your sink to me paying a designer to work on a web site. I guess in some cases an e-mail has got a valid proof, but it depends on the price of the transaction. You can confirm a 1,000 € job by e-mail, but I guess a 100,000 € transaction needs more.

What you need is a proof that the agreement occurred between the two entities.

When giving someone the right to sell your product, I'm quite certain than an oral agreement or even an e-mail is insufficient.

A printed e-mail sent by fax, let's just not talk about it. ;)

Re: “Is PayPal good for your microISV business?” A short PayPal horror story

#50

Post by bmm6o »

swombat wrote: post #24

The way I see it, for something as critical as payment infrastructure, it is simply not an option to go with someone who doesn't have a phone number where you can speak to a real, intelligent person who can act beyond the confines of a few support call scripts. This is largely why we use a merchant account with a real bank (which has a dedicated account manager), and a gateway with quality support staff that always p…

Absolutely. PayPal is fine right up until the point when they cut you off, and then you have virtually no recourse. A similar thing happened to me (though I was dealing in physical goods), and I was never able to get it straightened out. They kept asking for more info, I kept faxing it to them; it was never really clear to me what specifically they found suspicious or what I had to do to allay their fears. Having to interact by fax with people who have no authority or incentive to resolve the matter is awful; I think they hope you just give up.
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