posted on November 4, 2001 02:55:16 PM new
There are many payment services on the Net. Post a question about Billpoint, Paydirect or C2it, and you will get a few replies, some positive and some negative. Post a question about PayPal and you will get several pages of replies, with arguments that explode into personal attacks. What is it about this company that engenders such emotion?
PayPal was a pioneering company with a breakthrough idea: allow small-time sellers to pay for auction purchases using their credit cards. Because it was a much-needed service, millions of users quickly signed up. The $10 and $5 referral bonuses didn't hurt either. It became the single most widely-used service on the Internet.
However, many buyers have been brainwashed into thinking that a seller who accepts PayPal is safe to deal with, while a seller who does not accept PayPal is somehow suspect. Well, if PayPal is so fast, easy and safe, why don't some sellers accept PayPal payments?
PayPal was started by some young partners, inexperienced with the realities of credit card processing and too arrogant to listen to their customers. First they thought they could get away with stating that charge backs would not be allowed. When that didn't work, they came up with a buyer/seller protection plan that set up some ground rules to prevent abuse. When that didn't work, they decided to just pretend that it did and hope that no one would notice.
Newsflash: the thousands of folks scammed by abusers of this service did notice.
There were the buyers who paid using stolen credit cards. With a real merchant account, seller can validate the card and decide if it passes. Here, PayPal validates the card. The seller has no way to know if the card is fraudulent. If PayPal does a bad job, the seller pays the price. And if buyers contact their credit card company and dispute charges, again the seller loses.
But isn't this the same way that Billpoint and Paydirect work? Why do I consider PayPal worse?
Only PayPal gave a PROMISE of seller protection. PayPal terms state that if sellers followed a set of rules, they would be protected against charge backs. As PayPal failed time and again to keep this promise, they went back to their terms and added another loophole. Among the loopholes: Seller must prove shipping to the confirmed address.
But delivery confirmation does not show an address, and this argument was used to deny sellers their protection. Many buyers do not even show a confirmed address. The seller protection only covers fraudulent payments and buyer claims of non-delivery. And scammers quickly learned to make a claim of "quality of item" against which sellers are not protected.
But even after all this was publicly acknowledged by PayPal's representative on the forums, PayPal continued to send out letters stating, "Only PayPal protects you against charge backs."
While Billpoint and Paydirect will only take back a payment made from a fraudulent credit card or after a customer dispute, PayPal goes one better (or worse). If customer A pays customer B with a stolen card and customer B pays seller C with funds from their PayPal account, PayPal will take the money back from seller C. Seller C is not even aware that a credit card was used. He is completely unaware that there is any risk. Imagine your bank taking back a cash deposit you made because the person who gave you the cash received a bad check from a third party!
For buyers, the news is even worse. Unless they pay with a credit card and maintain their charge back rights, the buyer protection plan is useless. Among the loopholes: if the seller sends an empty box, buyer loses. If the seller empties their PayPal account (and any scammer would), buyer loses.
Then there is the growing problem of restricted accounts. PayPal used to restrict accounts as soon as a buyer reported one problem. After much protest, they began restricting only the specific transaction. Then they put in fraud detection software. Now the program restricts accounts that it flags as possibly fraudulent.
This wouldn't be a problem if PayPal emailed the account holder with the reason for the restriction and a phone number to call to straighten out the problem (as they promised me they would do about a year ago). There are reports of accounts that remained restricted for months. When an account is restricted, payments are still accepted into the account, which the seller can not claim or refund.
One problem with PayPal is its arrogance - only PayPal is arrogant enough to assert that it never makes a mistake. Every complaint I see on message boards gets a response from the rep that the problem is the poster's bank, credit card or ISP. It is never PayPal's fault. Just once I'd like to see PayPal admit they made a mistake and will fix it. But as long as they never admit to a mistake, nothing will get fixed.
The other big problem is false promises.
PayPal attracted folks with their promise of "always free." Their definition of "always" is not the same as the dictionary. Then they started a two-tier program of personal and business accounts, with personal accounts being able to accept $500 in credit card charges for free. When that didn't work, it became $100 a month.
PayPal's next promise, "We will never force you to upgrade." "Never" in PayPal-speak means until November, when even the $100 limit goes away.
Another re-definition of "never" is found in this statement: "We will never access your bank account without permission." As of this month, PayPal has now changed their terms to allow them to access your bank account to collect funds they believe you owe them. Though this currently only affects business and premiere accounts opened after October 11, the question has been raised repeatedly on the boards (and not yet answered): What about personal accountswhich convert to business or premiere? In any case, given PayPal's history of constantly revising their terms, who knows what terms they will change next?
Everyone has a different opinion about PayPal. If you have a PayPal story, or if you disagree with me, post a message in the AuctionBytes Services forum <http://161.58.152.123/forum/phpBB/viewforum.php?forum=7&70>. But I don't promise I'll agree with you.
NOTE: PayPal lacks FDIC protection. Here's an article that brings up the question, should PayPal be regulated as a bank?
<http://www.banktechnews.com/btn/articles/btnoct01-13.shtml>
posted on November 4, 2001 03:25:38 PM new
I appreciate your concerns. However, since using PayPal for over two years, I've never had a problem. I find it simpler and easier to use than Billpoint--where you have to "dig" to find out how much was deposited into your bank account. Whenever I've had a problem, I call their 800 number and they are usually able to take care of it. Maybe I've been one of the lucky ones.
posted on November 4, 2001 03:57:34 PM new
I to have been using PayPal for a long time. I had a problem once, but it was not PayPals fault, and I called them and they helped me out right away.
I take PayPal and BillPoint. What ever will make it easier for my customers. I also take personal checks and money orders. I would say that 30% pay via BillPoint, 60% pay via PayPal, and 10% send their payment.
"There can't be a crisis today. My schedule is already full"
posted on November 4, 2001 04:22:28 PM new
i never have a problem with paypal,majority of my ebay customers use paypal so i go along with it.
i think we must ask ourselves if we are too old or too young to believe in fairy tales or lullabyes? we are here becasue we like the money we make selling on ebay or buying at bargain price,the motive is money.
so why do we always have to expect somone to keep offering free service?when was the last time you work for free?if so,how do you meet your mortgage and buy your grocery?
the fact that personal accounts are free up to 500 or 100 is due to the fact someone either the founder/worker/venture capitalist or fellow paypal business or premier accounts are subsidising you,dont you think it is about time to wean you off that subsidy?
if you have been selling on ebay and still cannot afford to upgrade and pay the fee,may be you should consider yourself not a good businessman/woman and drop out.
-----------------------------------
as for all that chargeback,fraud and restrictions,yes it can get messy but this is a risk of accepting credit card unseen,if you have a merchant account,your cc processor will be doing the same checking as billpoint or paypal.
if the owner does not realise her card is stolen,there is no way any cc processor will know,i know they have ways to detect fraudulent usage and call the owner but if the owner is not by the phone,charges will keep on accumulating until credit is reached.
--------------------------------------------
if someone has the intention of defrauding a seller or buyer,he/she will use any means convenient and available-forged check,false promise,stolen cc etc.even wire transfer is not 100% proof.
if seller ships a box of rocks or an empty box,it becomes a he said/she said situation,and the victim should make note that in the future buy from reputable source such as walmart,kmart,compusa,bestbuy.
------------------------------------------
yes,using paypal has its risks,dont use it if you feel the risk is too much for you to tolerate,ask for money order .
or just dont buy from individual ,buy from reputable stores.
-------------------------------------
this is just like riding a horse,if it takes you from point a to point b fast and easy,then go for it.
if it is going to kick you in the butt,then avoid it.
the choice is yours.
------------------------------------------
posted on November 4, 2001 07:02:27 PM new
I have also been with paypal for quite a while without a problem
those that thought there would never be a charge for this service were living in a dream world
if a check you deposit in your bank account bounces, who is ultimately responsibel to the bank? you, they don't go after the check writer that they don't know, they go after your account
posted on November 4, 2001 07:29:42 PM new
I've lost count of how many successful transactions I've made with PayPal, selling, buying, debit card purchases, transfering funds from one bank to another, personal transactions, etc. As a buyer I notice sellers will accept PayPal more often than not.
PayPal works great for me and it is a thorn in eBay's attempt to control the whole enchilada... double plus good.
PayPal blazed the trail on person to person email payments and yes they have made changes since their inceptions, businesses have to do that. Remember PayPlace, PayMe, TradeSafe, ExchangePath? Those are some other companies that didn't make the business decisions PayPal made. You can now visit those companies in the dot com cemetary.
posted on November 4, 2001 09:03:23 PM new
I had one of my credit card numbers stolen just a little while ago, Not my card, just the number. I guess one night whoever got it, just went crazy on a web site and kept making one charge after another. Luckily, the fraud department from my credit card company called me first thing the next morning, and asked if I had charged almost $1,000 worth of stuff on the one web site!
I hadn't even heard of the web site! Something must have tipped them off that it wasn't me... Thankfully!
Now, who is responsible for that? Not me. So I guess the web site that my stolen number was used at. If all of the credit card companys had to pay for all of the fraud, they would be out of business.
It's the same thing with PayPal. They can't afford to pay for all the fraudulent charges that might arise. They have some safe gaurds in place for you to follow, that is the best they and you can do.
When you take a credit card, that is the chance you take. Nobody wants it to happen, but it does sometimes.
"There can't be a crisis today. My schedule is already full"
