Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Good riddance, PayPal

elliotjaystocks.com

Post reply on HN
Print view View original

201–210 of 272 posts

Re: Good riddance, PayPal

#201

Post by tptacek »

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.

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?

Re: Good riddance, PayPal

#202

Post by tptacek »

Silhouette wrote: post #196
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?

No, we're suggesting that if you're going to offer a merchant account to a company, your decision and terms should be based on the nature of that company. You might reasonably do a credit check on the principals, since someone running a company who has a track record of bad debts is obviously a warning sign. Likewise you can check them against the databases of people who've been kicked off payment services before. Bu…

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?

Re: Good riddance, PayPal

#203

Post by bobbles »

qeorge wrote: post #117

Anecdotal, but maybe helpful: we had a customer purchase software from us almost a year ago, who paid via PayPal but using their Visa. They've now initiated a chargeback. When that occurs, Visa takes the money from PayPal, who takes it from us, immediately - Visa presumes their customer is "innocent" if you will. It makes no sense, but if you don't like it your option is to not accept Visa. They own the customer so t…

FYI,

Here in Australia, my bank told me they were obligated to have a chargeback process resolved within 90 days.

Not sure if its a legal thing or just their own internal policy (Westpac).

Re: Good riddance, PayPal

#204

Post by FireBeyond »

petercooper wrote: post #180
ig1 wrote: post #175

Earlier quoted context omitted.

Kickstarter isn't prepayment, it's patronage, the providers are under no obligation to deliver the product.

Kickstarter's T&Cs state: Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill. http://www.kickstarter.com/terms-of-use

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.

Re: Good riddance, PayPal

#205

Post by joeyh »

petercooper wrote: post #180
ig1 wrote: post #175

Earlier quoted context omitted.

Kickstarter isn't prepayment, it's patronage, the providers are under no obligation to deliver the product.

Kickstarter's T&Cs state: Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill. http://www.kickstarter.com/terms-of-use

The teeth backing up that TOS is that if you violate it, you'll probably find it hard to get a new kickstarter project accepted. But that doesn't mean there's a legal obligation to fulfill rewards.

Re: Good riddance, PayPal

#206

Post by lhnn »

jedberg wrote: post #89
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…

But yet somehow banks stay in business while being legally barred from these same protections.

Meh. As the author does, he finds another option. I'm not yet convinced that Paypal's shitty service is illegal, but I'm sure if it got bad enough, someone could reasonably argue theft or extortion.

Point being: The precedent of putting Paypal under the behemoth of banking laws/PCI/Frank-Dodd is more frightening than people still willing to do business with them getting shafted. Dare I say, if it were easier and less regulated to move money through the interwebs, Paypal wouldn't be an issue.

Re: Good riddance, PayPal

#207

Post by marshray »

tptacek wrote: post #202
Silhouette wrote: post #196

Earlier quoted context omitted.

No, we're suggesting that if you're going to offer a merchant account to a company, your decision and terms should be based on the nature of that company. You might reasonably do a credit check on the principals, since someone running a company who has a track record of bad debts is obviously a warning sign. Likewise you can check them against the databases of people who've been kicked off payment services before. Bu…

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 start an honest corporation without putting his kids' college savings at risk of highly unpredictable fraud loss. Unless this person is connected to the right people in finance and banking, of course.

Why shouldn't my local tree-trimmer be able to accept credit cards? Like Greece, imagine the uncaptured tax that results from this sector of the economy dealing instead in mostly cash. I don't think this the current system is optimal or fair.

Re: Good riddance, PayPal

#208

Post by Silhouette »

tptacek wrote: post #201
Silhouette wrote: post #195

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. 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.

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.

Re: Good riddance, PayPal

#209

Post by Silhouette »

tptacek wrote: post #202
Silhouette wrote: post #196

Earlier quoted context omitted.

No, we're suggesting that if you're going to offer a merchant account to a company, your decision and terms should be based on the nature of that company. You might reasonably do a credit check on the principals, since someone running a company who has a track record of bad debts is obviously a warning sign. Likewise you can check them against the databases of people who've been kicked off payment services before. Bu…

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 service company with no new clients is not long for the business world.

Re: Good riddance, PayPal

#210

Post by pzxc »

nathanb wrote: post #155
wpietri wrote: post #102

Earlier quoted context omitted.

I believe it's a classic business mistake to think that you must turn a profit on every single customer. It's much better to think like a casino: as long as you're in the black for a service and segment of customers, it's a win. That's especially true for PayPal now. Before merchants didn't have much choice. If PayPal continues to be seen as difficult and risky, the better-qualified merchants will be the first to shi…

I don't think any reasonable person has a problem with PayPal deciding to freeze funds in order to ensure that they make a profit. The problem is that, once they have done so, it requires Moses and ten Biblical plagues in order for them to let your money go.

I don't have a problem with PayPal putting a temporary hold (delay) on new funds coming into an account (as long as it's clear what the guidelines are for such a policy), but what I do have a problem with is PayPal freezing an entire account, including funds that are more than a year old. Which PayPal absolutely does in some circumstances.

5-year ex-paypal customer (and hated being one the whole time). 6-month stripe customer (and happy every minute of it so far)

Post reply on HN