The evil paypal?

[Elite Skills]

This article is very creepy http://www.paypalsucks.com/forums/sh...29&old_block=0 . It basically states that paypal doesn't care about you and will grab your money if it feels like it and you can't do anything about it. I'm not too sure how the ebusiness things work as far as payments. Paypal takes a terrible percent of each transaction even if it's a quick alteration between 2 rows of it's database. How does everyone else do it? I know I have to have encryption but can peole signup with the credit card companies online to use them in ebusiness?

Thanks for your help and insights.

[Sualdam]

In my experience, the only disadvantage to signing up for a merchant account is the cost. You basically need to have quite a bit of business - or expect to build up to it quickly - for it to be worthwhile.

They still take a cut, but it is very small.

I think that's one of the reasons PayPal came along - it is cheap to set up and works if you only have one sale a year.

Something to bear in mind: in a free market economy the chances are you're charging as much as you can get away with for whatever it is you sell. You certainly aren't selling at a loss. Is it really so wrong that PayPal is trying to make a profit?

:)

[Unclefussy]

We use PayPal and Love it!!
To have a zon (credit card machine) in your business also cost money per transaction and you have to buy the equipment to make the transaction and they are not cheep.
We really like the eCheck feature on PayPal.

[mtheory]

People who've had PayPay freeze their account probably aren't telling the whole story. I have yet to see this happen to a reputable business.

[Elite Skills]

You're probably right. The example they gave in that 'manager's account' was what would paypal like better: risk getting a sum of money over the next few years or getting it all instantly by freezing the account. Oviously it would exclude featured merchants and such but there's still that terrible risk. I've heard all kinds of horror stories. The thing that make it seem real is it's true that they don't have their customer service or some kind of way to contact them(it's not like they're too poor to afford that). The other thing that bothers me is the % they take from transactions between paypal accounts as donations. It's a simple change between 2 rows in their database but they charge pretty tough at small transactions.

The the credit card companies offer credit card validations and use for ebusiness? I can never seem to find where to go on this matter.

[mtheory]

Originally Posted by Elite Skills

The other thing that bothers me is the % they take from transactions between paypal accounts as donations. It's a simple change between 2 rows in their database but they charge pretty tough at small transactions.

You take a narrow point of view regarding the work process PayPay takes their fees for.

It's not just changing lines in database. It is a product of doing a service. A service that incurrs real overhead. Office space, server space, maintenance, employee salaries & benefits, insurance, just to name a few.

Their actual net profit is probably less than 5% of what they have to charge to acommadate a transaction.

Business 101


http://mtheoryit.com
http://localshoppernetwork.com

[Sunshyn]

PayPal froze our account. We have had a regular merchant account since 1994 but also offered PayPal. They claimed we were selling restricted items through their service. We weren't.

We offer a small percentage of lingerie style items, which are not, in fact, restricted by PayPal. On top of that, our system was customized to not even offer PayPal for lingerie items as a - what we thought was an over the top - cautionary measure.

We finally came to the conclusion that the caution we set up for items displayed as lingerie must be the reason - not that they'd actually bother to give us a straight answer despite our many requests. We developed that caution so that jewelry shoppers, especially younger ones, don't accidentally run across them. Even though most of our customers feel our pictures are far too mild to necessitate a caution, I feel it's only courteous since my jewelry designs often appeal to teens. I'm certainly not removing it for a chance to have PayPal treat my customers as they did when they canceled our account days before alerting us to the fact. I'm actually more upset about that than the fact that they're *still* holding our money even though it's been months.
An unexpected problem is that I can't even know if a couple orders which had delivery problems have been refunded by PayPal or not.

The way PayPal handles their policies (and the way they treat a business's customers!) leaves a great deal to be desired. At the *very* least, a company deserves more explanation than repeated automatic responses regarding an account freeze or cancelation. The one response we received which seemed to be answered by an actual person managed to bypass my direct questions and, in fact, only created more confusion.

[rambodog]

Bottom line is "Are there good alternatives to PayPal?" or is PayPal the best solution. Seems a lot of people I deal with accept it if they are just getting going.

[matauri]

Guys, I have moved this topic from Internet Industry into ecommerce because I think this is where talk of the up & downside of Paypal will best benefit members.


Cindy

[DanThies]

I use Paypal, and I'm very happy with them. I don't leave large amounts of money sitting in my Paypal account, so I wouldn't be out of business or bankrupt if they closed my account.

For what's still basically a one-person shop (I handle all the management), the ease of integrating our back-end systems & affiliate programs with Paypal has made my life a lot easier.

There are a lot of stories out there, but we just don't know the facts behind them. Having worked on email support and call centers, I know that a lot of people will flat out lie to get what they want.

I have never had any issues with customers or with Paypal that couldn't be resolved very quickly by their support staff. We'll be adding a regular credit card payment gateway soon (after incorporating), but even then Paypal will still be our first option for payment.

[Corey Bryant]

Actually Paypal does not take that much for being a third party processor. There are others that take a higher percentage.

I actually know one person whose bank account was frozen. Her Paypal account was hacked into & for 6 months she could not use Paypal or her bank account. I have always suggested to get another bank account only for Paypal.

Third party processors can be good for businesses that are just starting out. Usually you have very low or no start-up costs. The discount rate & transaction rates though are usually higher. Once you start to process over $1,000 a month - you should consider getting your own merchant account.

[shaz1104]

hi ive had a paypal account for 6 months now i have had no problems up to now and am pleased with it its a lot easier and quicker than waiting for cheques to arrive and makes more buisness the only thing i will say is CHANGE YOUR PASS WORD VERY REGULAR as ive had a few friend who had there accounts hacked in to and all your bank details are in there also i dont leave more than 100 in at a time before i transfer it (which is free over £50 )
i think there charges are good compared to other companies out there

[kjohnson5576]

I use a third party merchant account and Paypal. Never had any problems with Paypal and their rates are better than the 3rd party merchant account, i.e. no fees for reports, statements, etc. The 3rd party accounts are 2.6% plus $0.35 per transaction. If you do over $3000 a month with PayPal and are a Business Account holder, the rates move down to $2.6%.

I've only had one person complain to PayPal about me and I handled it the way I would any other complaint, with a refund after the goods were returned. They had bought the insurance also. PayPal never shut me down and as a matter of fact, told me not to worry about anything until their investigation was done. I think the person was trying to get a refund from me and the insurance from paypal. Didn't work.

I've heard all this..."You need to get your own Merchant Account" talk. What is your own Merchant Account and what are the fees? Just want to know some rates, set up fees, etc. My sales are well over 5K a month and if there is a way I can save on the discount rate..I'd certainly like to know it.

[redcircle]

The only advantage a normal merchant account would be if you had a normal brick and mortar plus online sales. With paypal you can't punch in someone elses credit card info.

I've been using paypal for about a year and have had no problems. My suggestion is to get the paypal debit card. you receive 1.5% back when you use it. which means I'm only getting charged .35+ 1.5% a transaction. which is darn good.

For those that say you need equipment to take CC's with a normal merchant account that is false. Authorize.net has solutions that all you need is a computer and you can do all that with them.

Although I haven't setup our authoize.net account yet we do have our merchant account through First Data and have been very pleased.

[kjohnson5576]

RedCircle

I currently use Authorizenet also with Total Merchant Services. What kind of rates does First Data have? And is it a Merchant Account or a third party account? I've got some trouble discerning the two.

[Elite Skills]

computermark:

Their actual net profit is probably less than 5% of what they have to charge to acommadate a transaction.

With the amount of transactions going through that site everyday their expenses should be very well paid for. They are basically a bank, a big huge psycho bank that has probably grown too large and messy to properly maintain order. I'm not sure how you could take that kind of stand behind them as if they were some charitable organization. Don't underestimate their size.

I wouldn't receive big donations for my site. I'd get a dollar and get 67 cents of it. The amount charged in small transactions is rude. It's just a quick change between two entrees in their database. It is logged and and recorded on a secure server, big deal. My site has had several hundred submissions, new users, and user interactions but it hasn't cost me more than the initial $100 a year for the host(3% of possible bandwidth used per month). It's just a number alteration in their database. Hell, they could even make money if they wanted to, and spend it all on the accounts. All it takes is an evil person with a high level ranking in the paypal corporation. I really wish I knew a better way... I'm setting up an amazon account but I hear they can be just as bad.

kjohnson5576, I think you should put your site up for review. If it's that profitable you could be making even more with a bit of feedback. Your sites a bit big in filesize and it could use some minor tweaks. Not to be rude or anything, just could be impoved.

[kjohnson5576]

Computermark...profitability and amount of sales aren't necessarily the same. My heads above water...but I could still stand to be more profitable, hence fees charged by credit card companies.

I had my site up for review about 4 months ago, and took some of the advice to heart, new logo, background color, etc. Things are so busy with after Christmas sales and stuff that I haven't had a chance to update it or get a slew of new products on yet. I'm planning a major update in the near future and may put it back in again for review.

I'll admit, it is a bit heavy, but it's gotten me top ranking (#1 spots) in Google for the major keywords that I look to, and usually top 10 spots in most other keyword catagories. This was a main goal, as well as ease of use for customers. I've gotten anonymous feedback on the site from buyers through Shopping.com. I was surprised, because I didn't think the design was all that good, but over 98% of the acutal customers said the site was easy to use, and was as good or better than most sites they have shopped at before. The only negative rating was small amount of product offered on the site.

Thanks for the advice. I think I'll throw it in for critique before the next update. I can think of lots of things I would like to do different, but the search word ranking is really great, and I shutter to think about tampering with the site too much.

[kimbecker1]

Well most of the time! Easy to use and doesn't really cost any more than Visa, Amex or MC accounts for fees.

BUT ... we had a dishonest customer make a huge order and after delivery do a charge back it was $600+.

Paypal claims to protect merchants but when it came down to it the small print kept us from getting the $ returned to us.

Credit Card companies and Paypal have to start doing something about protecting Merchants from dishonest buyers.

[Elite Skills]

I bet paypal has some kind of statistical result that says people are far less likely to persue legal matters under $1000 than those over. It is not beneficial for them to persue such claims due to this fact(all about probability of losing money). I'm not all to sure how the ebusiness transactions work yet. I don't understand why most merchants don't give out contact information and offer payment through a cashiers check mailed directly. Why just the 3rd person median?

kjohnson5576: use tools like http://www.designerwiz.com/test/keyw...sity_check.htm and http://www.keywordcount.com/ on keywords that are turning up high ranking. Count the repetitions in the description, keywords, title, and body and keep them the same. Use
http://www.widexl.com/remote/search-...-analyzer.html to keep the relavance up. Delete the words that don't yield high results and that will raise your results in the search engine because of the newly optimised focus you put on your keywords. If you take the time and use the proper tools it won't be so much of a risk and you may significantly increase sales in the longrun.

[leatherblues]

I read on another forum about http://www.pay-line.com/

Has anyone ever used this service either to sell or to buy something?

Do you think it would be a good idea to use it as a second alternative. I already use Paypal on my site.

[Elite Skills]

4% is a bit steep. The "contact us" page looks very encouraging. Checking by alexa.com it says they've been online since 96 and only have a rank of 2-3 million and it has no reviews. It looks like people don't "prefer" it due to that fact, but only speculating. An angry reviewer is more likely to review than an satisfied user so it looks fairly promising in that aspect. I can't say it looks like a scam. It seems to be small so far so that's good in that scammers will be less likely to jump to it and bad in that it has less reliability in it's financial situation and (possibility)security.