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Good riddance, PayPal

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Re: Good riddance, PayPal

#221

Post by philipsflat »

Silhouette wrote: post #197
lbarrow wrote: post #167

Earlier quoted context omitted.

http://www.braintreepayments.com/ just expanded into the EU and Canada! (Disclosure, I work for Braintree.)

Could you please clarify this? We made contact with Braintree just last week, resulting in an invitation to join the EU beta programme. We read over the provided docs and sent back a few follow-up questions, but haven't heard anything since. Now the whole site seems to have changed around, suggesting that the service is out of beta. Can I safely assume at this point that our reply was "lost" and we should start over?…

My apologies. I can say that's highly unusual and there's no excuse for it. Can you email me directly at rob@braintreepayments.com so I can straighten this out for you ASAP?

Re: Good riddance, PayPal

#222

Post by illumin8 »

reitzensteinm wrote: post #35

The customer service angle sucks, no question, and I'm worried about getting into similar trouble (I sell downloadable games via PayPal). But I actually think holding an issues worth of revenue in reserve is a decent enough compromise. If the company goes bankrupt before an issue ships, for whatever reason, PayPal themselves are going to be on the hook for refunding every single payment, as well as chargeback fees th…

PayPal charges 5%? You should really shop around. You can get a merchant account through any number of banks that will charge 3% or less. Merchant accounts have the added advantage that they won't freeze your funds, however, you do have to agree to honor chargebacks, even if they happen a few months later, and you have to live by the card company's dispute policy, which is heavily slanted towards the consumer.

Re: Good riddance, PayPal

#223

Post by tptacek »

marshray wrote: post #207
tptacek wrote: post #202

Earlier quoted context omitted.

Ok, and now the answer to that question is, "No, actuarially, we cannot offer you a merchant account backed only by your corporation." Like I said before. Your response is... what? No merchant account for you?

No, I've outlined two other options: A. The bank offers a merchant account to a party they feel is worthy with the understanding that this party is going to use the account for the corporation. B. The bank re-evaluates their criteria for merchant accounts and/or develops new products with which to serve the demand for merchant accounts. But the status quo seems to me like a situation in which an entrepreneur can't st…

What does it help that the corporation is going to use the account only for the corporation? How does that cover the bank when the corporation fails to deliver on its promises to customers and then goes bankrupt, leaving the bank on the hook for chargebacks?

Re: Good riddance, PayPal

#224

Post by Spooky23 »

Silhouette wrote: post #195
tptacek wrote: post #192

Earlier quoted context omitted.

If someone could make money by offering merchant services to businesses with no credit history, they'd already be doing it. No law requires banks to require personal credit checks for merchant accounts.

If someone could make money by offering merchant services to businesses with no credit history, they'd already be doing it. They are already doing it, every time a new business opens an account with them. No law requires banks to require personal credit checks for merchant accounts. I'm not talking about credit checks, I'm talking about a personal guarantee, of the "taking your house" variety.

Why would expose themselves to such obvious fraud?

The personal guarantees go away once your business is a going concern.

Re: Good riddance, PayPal

#225

Post by streptomycin »

rustynails wrote: post #168
calciphus wrote: post #162

Earlier quoted context omitted.

Paypal's goal is to protect the person giving the money, not the person receiving it. Yes, that's not ideal for you as the merchant. Welcome to being a merchant. Shrinkage exists.

Not in my case. I bought an iPod over eBay a few years back. It was delivered faulty. I chatted with seller who said send it back. I told him I would when I "got back", which I did. Sent it registered. The guy stopped answering mail when he got the device. His reputation started to plummet very quickly, mine was 100%. PayPal refused to investigate because I notified them too late (about 6 weeks after purchase) despit…

How long do you think they should accept chargebacks? 6 weeks? 6 months? 6 years?

Re: Good riddance, PayPal

#226

Post by tptacek »

Silhouette wrote: post #208
tptacek wrote: post #201

Earlier quoted context omitted.

If it's possible to build a viable business offering merchant account services backed by absolutely nothing other than the creditworthiness of a brand-new corporation, why is nobody doing that already?

Because they don't have to. The negotiating positions are entirely one-sided, and since they command all the power, they can essentially impose arbitrarily harsh terms to any extent the law permits.

I'm not sure you're following what I'm saying. That's probably my fault, for being terse. Even if the negotiating positions are "entirely one-sided" right now, that position leaves the door open for a competitor to capture market share by offering accounts without personal credit attachments. And yet nobody does that. That suggests one of two things: either (i) you can't capture much market share by offering easy terms for a merchant account (unlikely, to my mind) or (ii) you can't stay in business offering those terms.

Re: Good riddance, PayPal

#227

Post by tptacek »

marshray wrote: post #198
tptacek wrote: post #193

Earlier quoted context omitted.

Help me understand. What you're suggesting is that, simply by having paid a couple hundred bucks to incorporate, regardless of my personal credit, I should be able to establish a merchant account?

Asking to see some personal references and a personal background check is one thing. But requring a 'natural person' to become personally liable for a corporate contract is basically equivalent to denying the corporation. So maybe the bank is willing to issue the merchant account to the individual with the understanding that it may be used by a corporation. But let's not call it something it isn't.

You said it earlier: requiring a personal guarantee is indeed the equivalent of denying the account to the corporation. I'm not sure what else there is to talk about, unless you think contracts for merchant accounts should be compulsory.

Re: Good riddance, PayPal

#228

Post by shiftpgdn »

nemetroid wrote: post #219
FireBeyond wrote: post #204

Earlier quoted context omitted.

When you fund a Kickstarter project, you're investing in the project. If it does not fully fund, you receive a refund from Kickstarter. If it does, your funds go to the project, who are on their best effort to successfully launch the project. You are NOT, however, directly purchasing a reward. You receive a reward as a gift for helping to fund at a given level.

Are you unable to read? The T&C, as quoted, very clearly states that the project creator is required to fulfil the reward or they must refund the backer.

Under what penalty? Plenty of Kickstarter projects have gone unfulfilled with no refunds.

Re: Good riddance, PayPal

#229

Post by tptacek »

Silhouette wrote: post #211
marshray wrote: post #207

Earlier quoted context omitted.

No, I've outlined two other options: A. The bank offers a merchant account to a party they feel is worthy with the understanding that this party is going to use the account for the corporation. B. The bank re-evaluates their criteria for merchant accounts and/or develops new products with which to serve the demand for merchant accounts. But the status quo seems to me like a situation in which an entrepreneur can't st…

But the status quo seems to me like a situation in which an entrepreneur can't start an honest corporation without putting his kids' college savings at risk of highly unpredictable fraud loss. And to add insult to injury, that kind of risk is entirely the fault of the payment industry itself, for failing to implement sufficiently robust security measures. And yet, the merchant typically carries the risk, not the paym…

Merchant account providers are not in the insurance business. If you're starting a business and worried that your own product failures are going to bankrupt you, pay for insurance.

It seems to me at this point that we've lost track of what a merchant account provider even does, and that your argument in some way depends on the fact that it's easier for large companies to bear losses than small ones, and so they should bear those losses regardless of who causes them. Why not just say Apple and Walmart should insure all new startups against personal losses at the same time? It's the same argument.

Re: Good riddance, PayPal

#230

Post by tptacek »

Silhouette wrote: post #209
tptacek wrote: post #202

Earlier quoted context omitted.

Ok, and now the answer to that question is, "No, actuarially, we cannot offer you a merchant account backed only by your corporation." Like I said before. Your response is... what? No merchant account for you?

Ok, and now the answer to that question is, "No, actuarially, we cannot offer you a merchant account backed only by your corporation." Like I said before. Well, I don't believe that would be the universal answer in most cases, and perhaps where it really is there is a lesson that someone should learn cheaply. But let's assume you're right for the sake of this discussion. Your response is... what? That a financial ser…

This is not a serious argument. It suggests that a simple form of contract between two consenting counterparties should be made unlawful, and then, to get around the fact that this would result in a market where small startups would never be able to get merchant accounts, suggests that the entire payment processing market would either restructure itself or be forced to restructure itself to get around that problem.

No. That's not going to happen. I'll go one further: if you so much as sign your name on a contract the wrong way, for instance by leaving out your title, you can easily create situations in which contracts that individual officers of your company sign bind directly to them; for instance, your VP/Engineering could easily sign a contract with a consulting developer that would leave them personally liable to that consultant if the company went out of business and didn't pay the consultant. The VP/Engineering in that scenario didn't even intend to create a personal attachment, and yet cases like this have been decided against people like that.

Similarly, in some states, payroll obligations --- which are contractual, precisely the type of exposure that limited liability covers --- can automatically pierce corporate liability and bind to the owners of the company.

I think you drastically overestimate the protection afforded by limited liability.

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