Is PayPal really as bad as people say?

Also what does it mean now that they have a banking license?

The internet is full of people that wish that company would go up in flames. And after reading some of the things these customers went through, I feel like closing my paypal account.

Noooo.. Their much worse. Hell No!!!

Heres one site of user experiences and horror stories but there are many more - PayPal Sucks

I don't use it much, but have from time to time. Never had a problem.

Pay Pal Sucks website is as unbiased as the You should never buy Microsoft products chappies!

My only bad experience with PayPal is when my US clients pay in USD - the charges are horrendous. If the pay in EUR from the US life is one sweet song. Not that I use PP much but it's the cheapest and quickest way of effecting international transfers that I know of.

Considering how big they are the suck really bad. Systems are slow and clunky. They completely screw you on exchange rates and deliberately DONT allow you to have an account in 2 countries or currencies - so forcing you to use their rubbish exchange rates. Or dick around setting up multiple accounts etc, and then shaft you on transfer of the funds.

I do a lot of business with Paypal but I don't like them or their systems at all.

It's true that their international exchange rates are pretty poor and their transaction charges are high considering they often aren't enacting a "transfer" in the traditional sense - from one financial institution to another - but rather internally, i.e. changing two figures in a database. They also pay no interest on balances. But they revolutionised buying on eBay by offering instant transfers (compared to the antiquated system of writing a cheque, posting it, presenting it and then waiting a week for it to clear), which is presumably why eBay snapped 'em up. Now they're forcing it onto German eBay users, although with the Überweisung system a more acceptable setup than cheques already exists.

Of course the site is biased, Grinner. But the content is true. PayPal is not a bank and therefore not subject to US banking regulations. They can -- and have -- closed accounts, held money, and refused to return it. Their history of dispute settlement is atrocious and usually unfair. Worse, in order to open an account with them you have to link it with a real bank account, giving them the ability to stop, hold and clear out that entire account. They have done this many times. Because they're not subject to any banking regulation it's almost impossible to seek redress in court.

woof.

I got an e-mail from them (have used them a couple of times, no big transactions and nothing international) saying they are now a bank apparently...

Ah, BadDoggie, but now they are! I just got an e-mail this week announcing that PP is turning into a bank. I can't quote it as it is not on this machine but a litany of new Rules and Regulation applicable to PP was attached.

But starting july the second at least in the E.U. the will be operating under a banking license, does this makes them safer?

I think they are totally SAFE. Wankers but SAFE.

I received a notice that they were suspending my account unless I gave them my creditcard data. Jerks. No extra charges on my creditcard yet this morning.
Take care,
space

wow! it seems like all the unhappy customers are in the U.S.

I used it once a few years ago and had no problems then. In fact I should still have like 50 cents on my account. Hmmm...

@AB

Cause the rest of the world is smart enough not to use it

See here.

woof.

I've used them when buying ebay items, never had any problems.

I use them regularly as a consumer, not a trader and have never had a problem. Ebay sellers often reduce their "shipping" charge if you DON'T use PayPal, so I assume trader charges are high. Safe and convenient, but such luxuries have a cost, somewhere...

I've been using Paypal for several years now on hundred of transactions, and I've never had a problem. That said, I've never had a problem Ebay seller. So long as you understand their terms and conditions and use it wisely, it's a decent enough service. Most of the people who whine and moan about problems with Ebay have those problems, because they didn't pay attention to the terms. For example, if you sell a high-value item on Ebay, NEVER accept Paypal as a payment on international transactions - only on low-value items, which are low risk. On international transactions, the buyer can just call their credit card and have them cancel the payment, and you have absolutely no recourse, since Paypal doesn't offer protection on international transactions. For domestic purchases, there's supposedly a little more security (though I've never actually had to fight anything - just learned this info off the Ebay international trading message board).

Holy Extortion Batman!

I've used PayPal for many reasons in the past without any problems, I would have even advocated for them, but I just received the following after an eBay buyer purchased my item and paid. Keep in mind that I didn't receive this information when I listed the item (the policy wasn't in effect that day) and they made no attempt to inform me of their new policy until after money went into my account. Also keep in mind that I have a 100% feedback rating on eBay. I do not tolerate extortion and will be canceling my account promptly.

If anyone knows of alternatives (I’ll probably open a merchant account) please let me know.

****************************************************
NOTICE OF PAYMENT RECEIVED - PLEASE SHIP ITEM

Dear ****,
You've received a payment, detailed below. We’ve placed a temporary hold on the funds for this transaction.

PayPal and eBay are working together to make payments for eBay items even safer. Because we want both buyers and sellers to feel confident about sending and receiving payments through PayPal, we may temporarily hold payments for items sold on eBay.

Make sure to ship the item right away, so you'll have access to the funds sooner. We’ll release the hold in 21 days unless you receive a dispute, claim, chargeback, or reversal on the transaction subject to the hold. We may release the hold earlier if either of the following occurs:
• The buyer leaves you positive feedback on eBay.
• We confirm that the item was delivered.* We can confirm delivery if you ship the item with USPS, FedEx, or UPS and either use PayPal shipping labels or upload tracking information from the transaction details page. This applies to transactions within the United States.

Additional hold period

If you receive a dispute, claim, chargeback, or reversal on the transaction subject to the hold, we may hold the payment until the problem is resolved.
Learn more about the PayPal policy for payment holds for eBay items.

We will notify you by email when the funds are released. You can monitor the status of the hold in your Transaction History.

* This applies to US domestic transactions that are shipped by USPS, FedEx, or UPS and either (i) use PayPal shipping labels to ship items or (ii) provide tracking information to PayPal.

Payment Details
Amount (pending): $********* USD
Transaction ID: **************
Buyer's Email: *****************

Shipping Details
Address:
********

Sincerely,
PayPal

Yup.. Welcome to the Ebay/Paypal screw users yet again rehash..

Ebay, tried to force all users on their Austrian site to use only PayPal. The users revolted. The consumer protection groups screamed,
and the Banking industry cried foul. In the end Ebay was forced to reinstate multiple payment options. Fast forward to Sept. Ebay
not learning from their previous mistakes has decided to pull the same crap in the US. They have removed (Or will do so soon)
the option to pay with Postal Money orders (A Federal Document) and Checks. The only payment option is PayPal. So now Ebay
get its $ from posting fees, a % of the winning amount, and PayPal payment fees (Inbound and Out).

Oh, and if you don't already have a PayPal account, they will just hold onto your $ until you open one. PayPal should be
avoided at all costs. If you don't you will be screwed. Maybe not now but eventually.

Another Ebay/PayPal scam is that after you ship the item out the buyer can file a complaint with PayPal and have the
money held or returned. Most of the time without any valid reason. Thus not only are you out the $ you also out the
item. And can can forget seeing your Palpal $ before the 6 month investigation limit.

Well, that’s pretty much their new scam. They want to screw you with the chargebacks without actually getting their hands dirty, so they’re turning this into an escrow.

I can’t imagine that I’m the only one that’s pissed. This will go over in the US about as well as Wal-Mart went over in Germany. Web content and search engine optimization writing is what I do best, so I’ll be blogging on this topic until my fingers bleed!

Ironically, my clients pay me via PayPal. So I’ll need to do a lot of research on PayPal alternatives (which will lead me to appropriate blogs for venting I’m sure). I can’t believe that they thought this was a good idea.

Dan
A loyal PayPal customer turned vigilante

Their biggest pisstake is here in Germany. When your account balance is zero, you need to choose a funding option to pay through PayPal. They encourage you to use LSV, whereby they take the money from your bank account. This is no faster either for buyer or seller than arranging an Überweisung direct from your bank – the seller gets an email explaining that a payment has been made, but that it won't be confirmed for another 2–3 working days.

So in this instance PayPal is no faster than an Überweisung – but whereas an Überweisung is free for both parties, PayPal still charge the seller for the "convenience" of having the payment come through them!

Amazing Update:

I talked with PayPal customer service, saying I disagree with and opt out of the policy that they started after my transaction started, and the English as a Second Language customer service rep just kept trying to explain the new policy. All I have to do is go along with their extortion and I’ll get my money, unless of course the buyer decides that he doesn’t want to pay for it, and then I’m screwed.

So I chat with eBay customer service and they give me the same story. I tell them I will not participate under their new rules and ask to cancel the transaction if they can’t work something out. The suggest that I cancel the transaction by DISPUTING AN UNPAID ITEM!!!

The poor buyer paid; it’s not his fault. He has no control over this… actually their first suggestion was that the buyer leave positive feedback for me before I ship the item because that is the magic code for releasing my funds.

We both have 100% positive feedback, and we both want to complete the transaction.

No one is out to protect the buyer; they just want to wash their hands of handling chargebacks. They’re actually asking me to screw the buyer to keep them from screwing me.

Incidentally, all electronic items (and a host of other high chargeback risk items) are now required by eBay to use PayPal or a merchant credit card account. All of these items are subject to PayPal holding funds until the buyer decides that they are pleased. This will just result in a wave of unscrupulous buyers saying they are unsatisfied and keeping their new treasures for free.

Meanwhile, I’m three weeks away from an international move, with tons of electronic items to get rid of cheap since I can’t use them anymore. The buyer wants to complete the transaction, and will probably send me a check and wait weeks to get it.

I’ll have to figure out how to do this Überweisung thing through the American banks, and then figure out how to explain it to other Americans, who aren’t quite as comfortable with the idea yet.

I can't imagine Americans being as willing to give out their banking info. But if you give out your routing and account number and tell them to deposit it... there is no stopping you or them from doing it but once they have your info in the US there is no stopping someone from using it online falsely either.

I hear what you're saying Seth. I know it can be done, and I'm pretty sure I know how, but it seems awfully counterintuitive.

Dan

No seriously, the slinky thing, that was my kid! OK, not really. *edit* uhhh... what happened to the comment I was referring too?

I’ve done a lot of transactions through PayPal (not nearly 4,000) and have always advocated for them. I’ve responded favorably in forums just like this one, and I’ve urged clients to reconsider when they’ve shied away from PayPal.

I’ve always responded to people’s claim that the fees are outrageous with my opinion that a business can’t operate without their fees. I gladly accept their fees as my business expense. I disagree with their new policy, but it is their choice, and it may save them a ton of money on disputes.

I am angry because they’ve imposed this new policy mid-transaction. If they come up with a new policy that I don’t agree with, I just won’t use their service anymore; that’s business. But don’t force a policy down my throat mid-transaction, and then tell me I don’t have a choice. That’s not just bad business - it’s illegal.

I’m sure most users will sheepishly accept this new policy, and I predict that some (definitely not all) eBay buyers will say they are unsatisfied to take advantage of it. I’m not taking my chances. Not only would I lose the item in question, but I’d also pay eBay fees, PayPal fees and postage for the pleasure.

Dan

I, too, have used Paypal for several years and for hundreds of transactions- both as buyer and seller- and have never had a problem. But I'm starting to question whether or not to keep using them after reading some of these posts! God, it sure was great back when Paypal was free and less complicated! Perhaps I've just been lucky and not had nightmare people to deal with...

Which brings me to another thought- why don't the banks in the US join the 21st century and set up something like the uberweisung system? In many ways, the US banks are ahead, but this is one area that is incredibly annoying...

They do have an "uberweisung type system", the problem is that most people and banks can't let go of checks. The ones that are
starting to get into the 21 century are going the credit card route as its been around for a long time is already established.

I wrote the slinky thing but thought I was being to wacky and off the post so I deleted it. Was it?

Check out this link to a class action lawsuit against PayPal. Any other TTers receive an email with a link to this?

Hmm, I've made some payments through Paypal lately with my US Visa check card- and have had to jump through hoops in doing so. (extra steps where you have to change the funding source, and then agree that yes you really want to use a credit card rather than your bank account.) I guess you have some more rights when using a cc than just using your bank account...

@Kitty-Kat: Yes, you do have more rights and protections through your credit card, which PayPal wishes you didn’t. The major issue however, is that just as you pay fees to PayPal when you use them to accept a payment, they pay fees to your credit card when you use it to pay them. So they make shameless attempts to trick you into using your bank account instead.

@Tinkerbel9: Wacky and off-topic, maybe; unwelcome, no. It’s hard to have a healthy debate by yourself.

Dan

Yeah, as copywriter says, they persuade you to use your bank account to fund your PayPal account because that way they avoid the credit card fees.

The other trick they pull concerns foreign-currency transactions. The de-facto process is for them to apply their own exchange rate, which is of course pretty poor. You have to jump through several hoops here as well for them to apply the charge in the original currency, so that your bank does the currency exchange.

If you looking to do a bank to bank xfer without fees, the checkout X-Etrade They offer public exchange
rates on currency conversion during xfer and are actually a certified currency xfer company registered with the US FDIC, unlike Paypal.

I lost €35 to PayPal the other day with their crappy exchange rates.

Silly me, still had my account in US dollars from the days when that was the only currency available on PayPal. I got a payment in euros which was automatically converted to dollars, and I then had to change it back to euros so I could transfer it to my bank account.

In the real world no conversion had actually been made, but after reading about PayPal's customer support I won't bother contacting them!

This is relevant to my interests.

I've been doing (non-eBay) business in the UK and EU for a while and am now starting to sell to the US and Canada. As it turns out all those new customers want to pay me by credit card, which as I'm discovering is a pain in the arse. I don't have a US bank account (though I do have a US currency account) so my options seem to be:

1. Worldpay -- does what I need but is expensive and apparently sucks
2. Paypal -- apparently sucks even more
3. Google Checkout -- only allows me to bill in GBP but otherwise doesn't appear to suck too much

I'm loath to admit it but Paypal seems to come out top for my specific needs.

Does anybody have good alternatives?