August 2013

Where Does All The Money Go?

Posted on August 29, 2013

Almost everyone has probably used PayPal at some point in time to either send or receive a payment, such is the almost monopolistic hold it seems to have on the eCommerce marketplace.  So here are a few thoughts on the shortcomings of PayPal, shortcomings and hang-ups that effectively inspired us to create our own alternative.  Unfortunately there are some online products or services that only take PayPal (or situations in which you will find yourself having to use it), so we still have roll our sleeves up and deal with this often frustrating company. The amount of time that PayPal holds users’ money for instance, raises serious questions about the efficacy of using it for an online business.  It’s not a bank, and you don’t earn interest on the money they hold onto for ambiguous periods of time. So let’s look at the time it takes for any transaction on PayPal…

Continue Reading

Three Major Dangers You Face When Taking Payments Through PayPal/Merchant Services:

Posted on August 21, 2013

Frozen Accounts: An internet search brings up any number of dissatisfied PayPal users and their problems. In fact judging from the volume of disasters experienced, it’s surprising that many online sellers are still effectively risking their income through taking their payments through PayPal. Here’s one account showing the dangers of the randomly frozen PayPal account, from PayPal warning.com. An online seller’s account is suddenly closed for 180 days, believe it or not due to high volume of sales passing into the account.  PayPal follow their usual practice of demanding large amounts of business documentation, and the seller supplies them; this results in the account being frozen anyway. It gets worse still. The seller then attempts to refund the money to their latest buyer, given that the transaction can no longer take place due to the frozen PayPal account.  This results in PayPal taking the money from the seller’s personal account rather than their PayPal account, meaning they have been charged twice for the amount they…

Continue Reading

Negative Paypal Balance: should you have to pay it?

Posted on August 7, 2013

Interesting point raised by this account, shared on the following thread: http://www.consumeractiongroup.co.uk/forum/showthread.php?395654-How-Do-I-get-Information-From-Paypal&highlight=paypal When PayPal demand that a defrauded seller pay their negative balance back to PayPal, have PayPal actually incurred a cost themselves by paying off the fraudulent buyer’s credit card company?  If not how can they defend the act of sending debt collection agencies after unfortunate online sellers? Here’s the situation: An established eBay seller has had a fraudulent chargeback issued against them years ago, the buyer claimed non receipt of the item despite the fact that the seller had confirmation over the phone from their delivery service that the item was delivered.  PayPal however did not acknowledge that the seller could actually demonstrate that the item was delivered, as at that time their policy was that the delivery had to be tracked online, which was not possible with the seller’s delivery service.  So instead PayPal had simply charged…

Continue Reading

A common eBay/PayPal scam and what to do if you’re the victim

Posted on August 7, 2013

Another case of the volatility of the eBay/PayPal environment: The scenario: A relatively inexperienced seller lists an iPhone 5 on eBay. About 25 minutes before the auction is due to end, the seller receives a phone call from a bidder, who asks if he can come and collect the item in person in the event of winning the auction. The seller then contacts eBay by phone, (having been slightly worried at the fact that the bidder could get his contact number), asks whether it will be safe to have the item collected in person or whether this will cause an issue with the transaction, and is told there would be no problems. So the seller receives the payment, arranges to meet the buyer in person to hand over the item sold and the deal is completed; the funds (hundreds of dollars) are in the seller’s PayPal account and they duly…

Continue Reading

The Uncertainties of a Merchant Account

Posted on August 6, 2013

More examples of the degree of uncertainty experienced by PayPal users: A person begins selling on eBay, sells an item and realises that the money takes 3 days or more to be transferred once the buyer receives the item.  Not a big deal, they think, but on paying for shipping costs they realise that the funds are not taken form their PayPal pending account where they should have the funds from the deal, but instead directly from their standard account, meaning they are immediately landed with a negative balance. They contact PayPal to try to make sure they can alleviate the negative balance by transferring money into it, and are assured that this will be done.  Instead however, they are simply charged again by PayPal.   So the customer now feels like they’ve been lied to directly, and robbed.  Next they contact customer service again and are ignored for days: at…

Continue Reading

The Chargeback Process and Your Online Business

Posted on August 6, 2013

It’s well known that a great number of chargeback processes are not actually the fault of online business, whether we’re talking about fraudulent transactions or failure to meet the obligations of the deal. Of course credit card companies are interested in keeping their customers happy, they want them to continue to use their card to make transactions online.  As such, most cases of alleged customer dissatisfaction usually result in a chargeback, with the funds being returned to the buyer and the seller losing out, whether they have been fraudulent, incompetent or otherwise. So there are significant dangers facing an online merchant where credit cards are concerned: on top of the obvious cost of losing an entire sale, sellers can incur penalty fees for chargebacks and have higher commission rates imposed on them when classified ‘risky’ accounts by the processing bank. However the terms, conditions and practices of major online payment…

Continue Reading

Online Payments: Pitfalls to Avoid

Posted on August 6, 2013

There’s no shortage of nightmare cases in the world of online payments: many come down to the fact that online sellers are forced into using one or two major online payment processors that simply don’t care for their business, with poor, impersonal customer service and arbitrary, unfair payment procedures. A few examples to illustrate: (1) An online seller deals in furniture and has been doing business without problems, all their customers have got what they paid for and they’ve only had positive feedback. One day, PayPal contacts them and demands to see a load of business documentation, saying that their account will be frozen until they supply it. The seller has to spend several weeks getting this information together, due to the fact that they have to contact all the courier companies they have used I order to obtain proof of delivery on every transaction, despite having only had positive…

Continue Reading

More Paypal Problems…

Posted on August 6, 2013

Your online funds can be seized on the spot, but it will take you an age to get a decent solution. Today’s top payment horror stories: (1) ‘Ironically, before this happened, I was a big fan of Paypal…’ PayPal freeze a seller’s account with more than $5000 dollars in it without warning, saying that they had carried out a routine check and taken issue with something they and found in the seller’s credit report.  The seller therefore could neither withdraw nor earn interest on the funds for 6 months. The seller has a 100% positive eBay account, with more than 100 sales successfully made and a number of repeat customers,  so it’s not as though there’s anything suspect about the seller’s account history in any way.  In fact the auction from which the money as made produced only positive feedback form all of the inning bidders/buyers involved. So the seller…

Continue Reading

Arbitrary PayPal Account Freezes and Poor Customer Service

Posted on August 6, 2013

A small company, recently established, chooses to take pre-orders.  But, PayPal doesn’t like the fact that the small company is receiving payments without delivering the item straight away, the account is frozen and this takes place just as the business is getting up and running, maybe taking more pre-orders on the new product that they have based their plans around launching. In order to unfreeze the account, the small business owner is told they must submit a huge raft of information establishing in depth the credentials of the business: invoices, proof of delivery, ‘business documentation’ and more.  The company owner then has a dreadful time in trying to submit the information, encountering technical errors and generally having a lot of their time wasted. Further to this, assuming the company succeeds in providing all the correct documentation required to verify it’s account, PayPal says it aims to respond within 14 days.  This is…

Continue Reading

Why More Sellers Are Looking For PayPal Alternatives

Posted on August 6, 2013

A common scenario for all those online sellers who are forced into using major payments companies like Paypal purely for lack of alternatives: A buyer decides to return an already used item but doesn’t feel like paying for return postage, so on the last day of their return period they establish a complaint procedure, and Paypal refunds them. The seller ends up with no item and no money. We see the same kind of process happen all the time with chargebacks and ‘unauthorized transaction’ claims, and this is why PayPal alternatives are becoming more and more sought after. No-one would tolerate the same situation in a real-world, offline monetary transaction, because the equivalent would be absurd: The buyer buys and uses an item, decides they don’t want it and demands that the seller come and collect it from them and give them a refund at the same time! The problem here…

Continue Reading

Older Posts