PayPal vs. others

I'm looking at providing some goods and services, but don't expect volume to be sufficient to make a merchant account cost-effective.

I heard some rather uncomplimentary things about Paypal some time ago, and then no more. I don't know whether the complaints were justified or not, and I'm wondering if the recent quiet means that they've fixed their problems, everyone has decided that the complaints are off-base, or if I'm just out of the loop.

It's my understanding that Citibank has a similar service, but I haven't heard any reports about it.

Anyone want to share their experiences with either of these two, or recommend an alternative?

There are also systems denominated in Pounds Sterling, or other currencies. Seems like it would be convenient for users in other countries; this *is* a World Wide Web, after all. But how involved is it for a US-based company to receiving payments through these services, then turn it into something that spends at WalMart or Kroger?

I just had a rather unpleasant experience with PayPal. Very much like you, I am thinking of setting up a payment option other than having my own merchant account, so I went for PayPal. They recommend even money recepients (i.e. sellers) to verify with a credit card (although you don't NEED to). But when I tried to do so with a card that has been good for the past 5 years, I was declined. (It is still good because I immediately checked so afterwards by making a purchase on-line.) And when I called their 1-800 support, they basically told me to go to hell:

1. They refused to disclose why my card was rejected, not even by giving some possible reasons or examples if I had filled out their form incorrectly.
2. the customer service representative simply recited prepared utterances (probably from a manual) no matter what I asked any further.
3. she even refused to elevate this inquiry to a higher level (e.g. a supervisor) saying that the answer would still be the same; and when I insisted, she only agreed to make a remark on file (but then there was no reference number whatsoever to track this conversation with her).
4. I sent an e-mail via their web-based support form later, but has not heard from them since (that was 11/27/01).

I'm just thinking, if they're not willing to help with a matter even this simple, how could I expect anything from them when there are some complicated payment issues!?

(Disclaimer) I'm not taking a position on whether they were justified in how they treated you, and I'm not saying they necessarily saw some kind of suspicious credit card pattern in your case(/Disclaimer)

This recent article about Paypal was interesting, and may help (somewhat) explain why they are "secretive" about their methods.

http://www.techreview.com/magazine/dec01/schwartz.asp


Bob S.
http://www.mensetmanus.net/

My experience with PayPal has been that they are fine as long as everything runs smoothly and you don't have any special needs or hit any glitches. The automated aspect of their system is great. The problem comes if you hit a situation that requires the intervention of a live human being. Then you can expect a descent into total hell.

Fortunately this has only happened to me once since I signed up with them, but it was pretty bad. Basically, a client tried to transfer me the initial deposit for her web site, and in response they froze both her account and mine indefinitely, with no explanation, for alleged "violations of PayPal's terms of service". Both my client and I wrote to them over and over trying to get an explanation, and all we got was form letters restating the same thing, without ever saying what part of the terms of service we were supposed to have violated.

Eventually I posted about the problem on a web design mailing list, someone pointed me to a discussion forum on an auction sellers' site that had a forum specifically for PayPal problems, which was monitored regularly by a sort of PayPal ombudsman/troubleshooter who seemed to have a fairly good track record. So I wrote to him directly and got it resolved with an apology inside of 24 hours!

Apparently they had suspected the transaction of being fraudulent because of the fact that my client had only just signed up with them and had a Hotmail address. So since then I've suggested that people use a real domain or ISP address when signing up rather than a webmail address, and not transfer large amounts of money until you've already done a few small transactions to establish a history with them.

Anyway, the address of the person who sorted it out for me is damon@paypal.com in case anyone else is in need, though it was almost a year ago so I can't guarantee he's still there.

I do still use PayPal - I can't afford the security deposit for a merchant account, so it's the only way I can take credit card payments - but I'd be a little wary of depending on it as the sole support of a business.

Another option for remotely hosted e-com transactions for small businesses is Mal's E-Commerce (http://www.mals-e.com). I've set this up for one client and it was pretty straightforward, and they seem happy with it. Wouldn't use it for a large business or someone who was concerned with making a very professional impression though - it's obvious that it's remotely hosted and that says "cheap" to most people.

Lynna

Business: http://www.spidersilk.net
Personal: http://www.wildideas.net

Thanks, diva. Damon has been helpful (and much more friendlier). I was able to add another card (they have just added Amex to their list I guess this week). Hopefully, everything will be fine.

P.S. But then your story confirms that PayPal's policy is basically killing even the innocent in order not to let any fraudulent activity ruin their so-called reputation. Not very impressive to me though.

Although they broke the previous link, the introduction to the article is now still availble here:

http://www.technologyreview.com/articles/schwartz1201.asp

The whole article will cost you, however. I subscribe (and recommend it), though, so if you want a copy of the pdf, send me a note, and we'll see what we can do for public interest/educational purposes...

Cheers,


Bob S.