Paypal and Crowdfunding: don’t do it • Hacker News Board

Re: Paypal and Crowdfunding: don’t do it

#31

Post by jeffmould » Sat, May 30, 2015, 3:45 PM UTC

dangrossman wrote: post #20

yc1010 wrote: post #11

Earlier quoted context omitted.

The thing about paypal is that when it works its fairly nice service, and people do not understand (or read terms) that it is not THEIR money displayed by digits on screen, but money held by a private company who does everything to not be regulated like a bank would. So average people then demand merchants accept Paypal and throw a hissy fit when the merchant balks rightly pointing that beside the fees there is a ver…

> who does everything to not be regulated like a bank would People say things like this all the time and I don't understand the basis for the claim. What does PayPal do to not be regulated like a bank? They're perhaps the single most heavily regulated financial company in existence. They operate in more countries [1] than almost any other, and each of those countries regulates them in some way. In some of those count…

IANAL, but I believe it is not that they are not regulated heavily, it is that bank regulations specifically are much stricter than money transmitter regulations. For example, a money transmitters (as PayPal claims it is) are only supposed to transmit money from person A to person B transparently. However, PayPal routinely will hold funds or refund funds to a buyer without giving the seller notice or fair warning. Under banking regulations there would be more transparency to the seller and these types of incidents would slow or cease to exist is my understanding. If you have a $1000 in your bank account and walk into the bank to withdraw $500 the bank has to honor your request as long as the funds are available. With PayPal it can be a guessing game of whether the funds are available and there is no one there to answer why they are not available when they make the claim. Again, IANAL but that is my general understanding of the difference.

EDITED TO ADD: Also, as I understand it if someone hacks your bank account the bank has insurance and your funds are almost always refunded sometimes the same day. With PayPal if your account is hacked and you have a balance there you risk losing your money with PayPal not refunding any of it. PayPal most likely would tell you it is your fault.

Re: Paypal and Crowdfunding: don’t do it

#32

Post by djim » Sat, May 30, 2015, 3:48 PM UTC

analog31 wrote: post #21

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

I use a PayPal merchant account for my very small side-business, selling a specialized gadget that's not very expensive. Over the past 7 years, PayPal has been utterly flawless. I have had zero issues. I monitor web forum chat, and enough people have commented about my product that I would know it if someone had a bad experience, or was reluctant to buy from me, due to PayPal. This is without discounting any of the h…

Stripe, Amazon Payments, WePay, & Square come to mind. Paypal is great, until it isn't.

Re: Paypal and Crowdfunding: don’t do it

#33

Post by crsmithdev » Sat, May 30, 2015, 3:48 PM UTC

Shouldn't this just be 'Paypal: don't do it'?

Re: Paypal and Crowdfunding: don’t do it

#34

Post by analog31 » Sat, May 30, 2015, 4:10 PM UTC

djim wrote: post #32

analog31 wrote: post #21

Earlier quoted context omitted.

I use a PayPal merchant account for my very small side-business, selling a specialized gadget that's not very expensive. Over the past 7 years, PayPal has been utterly flawless. I have had zero issues. I monitor web forum chat, and enough people have commented about my product that I would know it if someone had a bad experience, or was reluctant to buy from me, due to PayPal. This is without discounting any of the h…

Stripe, Amazon Payments, WePay, & Square come to mind. Paypal is great, until it isn't.

I looked into Stripe recently. Unless I mis-understand the technology, it's an API, and an Application Programming Interface requires Application Programming. In other words, I would need to operate a website, physically or in the cloud, and create the program that generates credit card transactions. I would also have to manage all of the policies that PayPal covers for me, such as dispute resolution.

PayPal gives me access to USPS first class mail shipping, which USPS doesn't even offer via their own website. This saves me money on shipping costs.

Last time I looked, Amazon seemed more complicated, and oriented towards bigger businesses than mine. I don't remember what I concluded about WePay and Square.

Everything is great until it isn't -- kind of a corollary to survivorship bias I guess.

Re: Paypal and Crowdfunding: don’t do it

#35

Post by jotm » Sat, May 30, 2015, 4:41 PM UTC

jusben1369 wrote: post #12

Weird he or she blames PayPal much more than Indiegogo. PayPal is the one who carries all the risk (if you aren't legit and people demand their money back after you fled) while IG watches this play out in their front yard over and over again and says nothing. And the reference to a rifle and other sections about physical violence being the only way PayPal will learn are disturbing.

Oh, but Paypal has been doing this to a whole lot of people for a very long time. There's plenty of horror stories of this kind.

In fact, he should've known that they are really, really biased against crowdfunding, pre-paying for events and processing lots of payments for non-physical goods.

The reasons technically make sense, but in reality, they should be able to do that without issues - it's not the early 00's, after all.

But it's like Paypal wants to be a "small payments" processor, instead of holding large amounts of money for other people. Maybe there are legal reasons for this...

Re: Paypal and Crowdfunding: don’t do it

#36

Post by jotm » Sat, May 30, 2015, 4:44 PM UTC

wolfgke wrote: post #29

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

Because most other payment providers (say Stripe) require a credit card, which is, at least in Germany, a not very popular payment option (the prefered payment option there is SEPA direct debit). I often have the impression that lots of vendors forget that in other countries (say, Germany) not everbody has and is willing to get a credit card and other payment options are prefered. Paypal provides them (in this case S…

Can you tell me if SEPA provide some kind of buyer protection? I bought a few parts on eBay and paid with SEPA, but there's no mention of any protection in case the seller is fraudulent, felt a bit uneasy unlike when paying with Paypal :-). Do you just call the bank and tell them to reverse the transaction? Thanks!

Re: Paypal and Crowdfunding: don’t do it

#37

Post by junto » Sat, May 30, 2015, 4:49 PM UTC

Much of these problems can be avoided when you treat PayPal as a conduit and not as a bank. It isn't a bank. Don't trust it to hold your money.

Treat it like a dodgey money exchanger on a back street in Lima and you are much less likely to get burned.

Re: Paypal and Crowdfunding: don’t do it

#38

Post by shalmanese » Sat, May 30, 2015, 4:50 PM UTC

Paypal is absolutely not freezing accounts to earn interest, that's absurd.

Paypal, and other money transmitters have a business model that earns them ~1% profit for a non-fraudulent transaction and -100% profit for a fraudulent transaction. That's just the nature of the game when you're in payments. That means paypal cares ~100x more about preventing fraud than keeping you happy.

Re: Paypal and Crowdfunding: don’t do it

#39

Post by MrBuddyCasino » Sat, May 30, 2015, 5:27 PM UTC

wolfgke wrote: post #29

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

Because most other payment providers (say Stripe) require a credit card, which is, at least in Germany, a not very popular payment option (the prefered payment option there is SEPA direct debit). I often have the impression that lots of vendors forget that in other countries (say, Germany) not everbody has and is willing to get a credit card and other payment options are prefered. Paypal provides them (in this case S…

Exactly. If Stripe managed to offer SEPA transfers, or integrate with giropay.de or whatever, I would be happy to use that instead. Credit cards are an inferior technology compared to the electronic bank transfers that are common in Europe since the early 80s.

Re: Paypal and Crowdfunding: don’t do it

#40

Post by MrBuddyCasino » Sat, May 30, 2015, 5:32 PM UTC

jotm wrote: post #36

wolfgke wrote: post #29

Earlier quoted context omitted.

Because most other payment providers (say Stripe) require a credit card, which is, at least in Germany, a not very popular payment option (the prefered payment option there is SEPA direct debit). I often have the impression that lots of vendors forget that in other countries (say, Germany) not everbody has and is willing to get a credit card and other payment options are prefered. Paypal provides them (in this case S…

Can you tell me if SEPA provide some kind of buyer protection? I bought a few parts on eBay and paid with SEPA, but there's no mention of any protection in case the seller is fraudulent, felt a bit uneasy unlike when paying with Paypal :-). Do you just call the bank and tell them to reverse the transaction? Thanks!

For basic SEPA, You can order the bank to reverse the transaction for up to 8 weeks afterwards. There are different kinds of SEPA transfers though, and I think its different between companies.