How to Get PayPal to Freeze Your Account in Four Easy Steps

I've been resisting the urge to market my startup as a PayPal alternative, because we're really focused on payments for in-person retail sales (largely to avoid competing with PayPal), but this is probably the fifth or sixth PayPal-froze-my-account posting I've seen on Hacker News and they all seem to garner enormous amounts of sympathy from readers. We've also built all of the infrastructure you'd need to do internet payments. As an aside, my non-profit's account was frozen once but I got it unfrozen in fairly short order, and at worst it was a minor annoyance. I gather that people have had much worse experiences, however. So that leads me to wonder:

- Would people really consider signing up for a payment startup's services they'd never heard of? Everyone complains about PayPal, and I'd argue rightly so, but at the same time everyone is also quick to say that they don't trust a company they don't know with their information.

- What's the most important service that PayPal offers that people are looking for? Just plain, vanilla, pay-me-through-my-web-site? Something else?

- Are these accounts that are routinely frozen related to international transactions somehow? Because we can't do business internationally and most payment startups can't. The regulatory and risk barriers are serious.

If there's a market for U.S.-based services that we can offer, maybe it's time to think more seriously about starting to compete.

The most important service: instant money transfer (mostly) irrespective of physical location.

I had one use-case this week where paypal would not work. I needed to withdraw the amount I was to be paid by my client and paypal has a $400/day ATM limit. So I asked the client to see if he can pay directly to my bank.

The obvious solution is wire. Of course, my client happens to be in a state that didn't have his business bank so wire was a no go. You have to visit a bank to wire.

In order for him to send me money he had to write a check from his business account to his personal BOA account, then withdraw from his BOA account and then run to a Wachovia and deposit into my wachovia account--all before 2pm cuz' after that the funds wouldn't be available until the next day for me.

After I got the money, I was to deposit it into a friend's account. I couldn't do it online through my bank's interface even though we share the same bank. I ran few blocks to Wells Fargo to withdraw cash I just received from my client and transfer to my buddy.

My story is probably one of the extreme cases in terms of urgency but it does point out all the hoops you have to jump to do a simple bank-to-bank money transfer just within the US.

I'm almost falling of my chair laughing (I do feel bad about this), but we've had so many similar issues with PayPal it is just crazy to think they once were the small guys fighting the establishment.

What you are trying to do is indeed very likely against their TOS, but the whole process is just appalling. I highly recommend looking at WePay. They might be a much better fit for you anyway (not just credit card payments, but also very low cost bank transfers).

Try to get a regular merchant account, but if I understand your business model you'll likely be rejected, or face unrealistic high fees. Maybe when you can show them some transaction history you'll have more luck.

I've stopped being surprised at this genre of story showing up - on HN or elsewhere. This story basically serves to illustrate a couple of things about Paypal that are definitely salient, but haven't changed in years.

* Banks are still shitty and unwilling to actually compete, so Paypal has its market all to itself.

* Because Paypal does not fear disruption or competition, it is not worth their time to invest in good customer service. They know you're stuck.

This is pretty much the same as the stories about trying to get customer service from Google. There are no effective competitors - so, their accountants and shareholders say, who the fuck cares if customers complain? What are they going to do, go to someone else? Doing so would harm the customers more than it would harm the company that they are abandoning.

I use the phrase "not worth their time" even though it implies things about the employees of the company which are not true - I use it because it is true of the company itself as an entity. It's a corporation - it's a sociopath. So it is basically incapable of providing good customer service as long as the return on investment of good customer service is negative, epsilon, or invisible. The employees, as people, probably do want to provide good customer service! But when it comes down to the human, humane desires of a corporation's employees conflicting with the sociopathic requirements of the corporation itself, we only need a brief look at the history of commerce in America. Put your money on the corporation's interests winning every time.

PayPal (and Google) will keep giving customers the finger until the thought of customers leaving actually scares them.

In the article, Paypal's letter doesn't say you're not allowed to be an aggregator, just that you're not allowed to be an aggregator that lets merchants get around Paypal's acceptable use rules. Maybe Airbnb has assured Paypal that it does not let merchants circumvent these rules.