“Is PayPal good for your microISV business?” A short PayPal horror story • Hacker News Board

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

#71

Post by noodle » Thu, Dec 17, 2009, 8:51 PM UTC

jrockway wrote: post #65

noodle wrote: post #63

Earlier quoted context omitted.

sure, but it also cripples small businesses who don't really know any better. not every small-time merchant will have the wits about them to present legal threats.

Dunno, a legal threat is the first thing that came to my mind. I don't see a situation where someone collects money from your customers and refuses to give it to you any different from someone walking into your home, smashing your piggy bank, and taking your money. The second case is obviously a crime, so it follows that the first is too. When you are a victim of a crime, negotiating with the criminal seems like a ba…

it is also the first thing that came to my mind, but i'd argue that we (as are, likely, most people on HN) in the minority, being more knowledgeable about the legal, technical and business aspects of the situation than the average small business owner.

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

#72

Post by ajross » Thu, Dec 17, 2009, 9:09 PM UTC

jrockway wrote: post #65

noodle wrote: post #63

Earlier quoted context omitted.

sure, but it also cripples small businesses who don't really know any better. not every small-time merchant will have the wits about them to present legal threats.

Dunno, a legal threat is the first thing that came to my mind. I don't see a situation where someone collects money from your customers and refuses to give it to you any different from someone walking into your home, smashing your piggy bank, and taking your money. The second case is obviously a crime, so it follows that the first is too. When you are a victim of a crime, negotiating with the criminal seems like a ba…

Not to nit too much (because I think this is exactly the right thing to do) but threatening to sue someone isn't the same thing as accusing them of a crime. If someone is tried for larceny, the point is that they are punished by the state to deter future crimes. The goal is not to return the stolen property to the owner; that's what a civil suit is for.

And indeed, in the business world this happens all the time. Companies delay and defer payments to each other all the time trying to maximize profits. The situation usually comes to equilibrium without court action (e.g. "pay me for the last shipment or you won't get the next"), but it's really common. "Payment up front" is a consumer thing. B2B transactions are a whole lot more complicated.

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

#73

Post by ladyada » Thu, Dec 17, 2009, 10:18 PM UTC

jrockway wrote: post #66

ladyada wrote: post #56

You may be able to avoid the biggest problem - which is money 'trapped' in the account by depositing all your funds, daily, into your bank account. Its called Daily Sweep. Wait, you've never heard of it? Oh yes, thats because not only is it -not- advertised or mentioned anywhere on the site but to activate the -option- it you need to call up on the phone! But its quite easy to do once you know about it. With your biz…

Yes, what is to stop PayPal from requesting all the funds back from your linked account? Can you ask your bank to prevent this?

Well we've only heard of this happening when there's a chargeback/claim & they had to pay the claimant. Not sure if its happened just because an account was shut down for 'risk management' Still, we prefer to keep as little $ as possible in PP's hands.

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

#74

Post by lutorm » Thu, Dec 17, 2009, 10:43 PM UTC

bdonlan wrote: post #60

eli wrote: post #43

Earlier quoted context omitted.

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.

http://www.copyright.gov/title17/92chap2.html#204 "A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent."

There was no transfer of copyright here though.

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

#75

Post by jeduan » Thu, Dec 17, 2009, 10:45 PM UTC

andreshb wrote: post #64

chaosmachine wrote: post #10

Earlier quoted context omitted.

Google Checkout, Amazon Payments, 2Checkout, Authorize.net, and other cc processors. Or get a merchant account.

What about best alternatives for merchants outside of the US/Europe?

Would be glad to hear an alternative. I havent been able to find a payment processor for Mexico.

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

#76

Post by nfnaaron » Thu, Dec 17, 2009, 11:33 PM UTC

__david__ wrote: post #70

bdfh42 wrote: post #6

I suspect that PayPal is the payment processor of choice for all crooks and scammers. Thus, choosing them as your payment processor is risking your business reputation - they will always default to treating their customers with suspicion and if they have your cash in their coffers then they will sit on it given any excuse to be "suspicious" - that's the business model they operate within. While the cost of processing…

The one advantage paypal has is the fact that it isolates your site from credit card numbers. If I go to some podunk site to buy something I almost always choose the paypal option even if they have a merchant account set up. Why? Because with paypal I end up authenticated with paypal.com and I know that no important info is passing through to the podunk site's servers. Otherwise I'm entering my credit card number int…

As you say, good for the consumer who may not have confidence in a site's honesty.

Good for the site too, in that a consumer's credit card information never touches your database; less liability in case of a data breach.

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

#77

Post by nfnaaron » Thu, Dec 17, 2009, 11:43 PM UTC

jamroom wrote: post #44

pkrumins wrote: post #27

Earlier quoted context omitted.

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 NO…

"I use both PayPal and Fastspring as our payment processors (Fastspring is there to give customers an option besides paypal)."

I wonder if this is something of a best practice, to have two payment processors running live. Besides giving customers a choice, you also have the other one already up, running and accepting money if paypal or whoever freezes you.

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

#78

Post by JereCoh » Thu, Dec 17, 2009, 11:49 PM UTC

This happened to my company earlier this month. The categorization, not any particular activity, of my business tripped one of PayPal's safety triggers. PayPal was unapologetic and wildly unhelpful in resolving the issue (that didn't exist!) quickly.

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

#79

Post by patio11 » Fri, Dec 18, 2009, 12:14 AM UTC

pkrumins wrote: post #14

Wondering if anyone has a success story with PayPal?

I've used Paypal for three years. In that time, I've sold something on the order of $50,000 worth of software through them. I've had exactly on occasion to contact them -- a customer did not realize the charge on their credit card was due to Bingo Card Creator, called their bank and disputed it, and then Paypal asked me to explain what was up. It was resolved to the mutual satisfaction of all parties within 48 hours.

I have no complaints about them.

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

#80

Post by sorbits » Fri, Dec 18, 2009, 12:25 AM UTC

barrkel wrote: post #19

josefresco wrote: post #9

Earlier quoted context omitted.

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 had one account closed down, but luckily I hadn't registered bank account details etc., only one of my credit cards. I recommend only ever registering the bare minimum of details with any given PayPal account, so that you can open up a new one with a different email address and different set of details.

Did you get a reason as to why it was closed down?