My Agenda

Contrary to some opinions posted on forums, my agenda is not to bring down any particular service. As I stated, personally, I have never had a problem with any, (even the ones I don't recommend) and I haven't used some of the ones I do recommend, either because they were geared to Canadians or Europeans, or because I had no reason to. The Internet is full of hype and the company that spends the most money or gives away the most referral fees ends up becoming the most popular, despite its drawbacks. It took less than a month for Paymentalt to sign up over 14,000 users with the promise of a $10 signup bonus and then disappear. I never heard the result of the various investigations into this "service." Exchangepath also signed up thousands with their referral fees and then closed down amid complaints of thousands of charge backs and frozen accounts.

My agenda is to rate the services based on the quality of the service. This goes beyond how many people use it or what glowing promises are made on their web site. Some allowances can be made for the fact that a larger service will have more complaints. Some allowances can be made for the fact that a larger service may take longer to respond. My goal is get the services who handle our money to realize that it is our money and we deserve quick and responsible action. Until I see this being provided, I will continue to recommend services with a proven record in handling financial transactions.

Paypal is currently the largest payment service on the Net. They were one of the pioneers and experts in the value of viral marketing through sign up bonuses and fees. Where they fell short is on the follow through. A lot of poorly conceived decisions and promises of safety that couldn't be guaranteed, were too quickly enacted. Good decisions, such as sending the seller the buyer's shipping address and allowing a seller to reject payments, were too long in coming. Customer support was treated as an afterthought, with folks reporting weeks and even months getting problems resolved.

The good news is that there have been improvements. Account restrictions are now rare. Money being taken out of bank accounts without the owner's consent is now rare. Even fraudulent payments and charge backs have dropped, due to better security and validation. However, this does not mean that I am ready to unconditionally recommend that you based your entire business model on accepting Paypal. I have heard from sellers with excellent ratings who received 80-90% of their payments through paypal, only to go bankrupt when their account was restricted over a single unsubstantiated complaint. If your account is restricted, paypal will continue accepting money "for you." This is money you can't accept or refund. Your customers will scream at YOU and post bad feedback. Your reputation will be destroyed. With a real merchant account, you may receive one or more charge backs, but the account will not be shut down except in cases of vendor fraud, and there is never a situation where your customers' cards are charged without your consent, the money appearing to go to your account without you having the ability to refund it. This is why Paypal should be extra careful before freezing an account. Unfortunately, they sometimes aren't.

Why have many folks reported that:
- they have had charge backs made against them or had their accounts restricted without any email or explanation from Paypal?
- when there is a serious problem, such as a large charge back or restricted account, it takes weeks to months to get it resolved?
- that it took only one verbal complaint to have funds frozen without the buyer providing any proof of fraud?
- that customers did charge backs against sellers without ever contacting them or Paypal, which is against Paypal's TOU (terms of use) and that Paypal upheld these charge backs even though they were against the TOU?
- that Paypal customer service consist of clerks who insist they don't have the authority to correct the problem and the person who does can't be reached and never returns calls?
- that while their accounts were restricted, Paypal continued to accept money "for them." This was money they could not withdraw or refund. In effect, Paypal was holding the money of innocent third parties. I have recommended repeatedly that if an account is restricted, any payments into that account should remain pending, so the payer can cancel if the seller does not accept it.

Paypal also uses some questionable tactics. Without notice, they changed the default payment method to bank account. Even experienced users go in to make a payment without realizing that the funds will be taken from their bank account rather than their credit card. You have to know to click a small link that says 'other funding options' in order to change this. Paypal should be more open about this. Yes, bank account payments cost them less to process. So offer an incentive for folks to use this method. Right now, the cost to seller is almost exactly the same. Charge the seller less for this method or offer the user 1% for using bank account instead of credit card.

The problems with Paypal are NOT that they are crooks looking to steal accounts or that they will go bankrupt with everyone's money or any of the other wild claims that are being made. Posts on public forums are one-sided and anonymous. You have to dismiss many of them. But the fact remains that Paypal-bashing posts far outnumber similar posts made about any other service and this can not be explained simply by the number of users. How many auctions state "absolutely no ..." for any other service? But there are hundreds if not thousands of "no paypal" auctions on ebay. One would think that Paypal should be concerned. But their attitude seems to be that as long as they are signing up new users, who cares if they lose some of the older ones. I used to see a dozen anti-paypal posts a day. This has now dropped to two or three weekly, so there is a major improvement.

Paypal used the excuse that they were new and experiencing growing pains. They are not so new anymore. They have shown they can react quickly when it comes to raising fees. I'd like to see them react as quickly when it comes to supporting their customers.