Paypal scamming the *hit out of Business Accounts.

[POLiSH]

I've been using PayPal for 10 years now and I am just blown away by the practices that are going on right now, specifically with Business Accounts.

The 2.9% + .30 of each transaction I can handle.
The $30.00 per month for PayPal Pro I can handle.

What I cannot handle is them taking 2.9% + .30 cents and on top of that holding 30% of any sales you make for 90 days in reserve and you cannot touch it, it's not yours and they take it.

Don't tell me this is because of charge backs, I really don't give a *hit about them, they happen and it's up to the seller to setup protection from them. i.e. requiring UPS Signature's on any product delivered etc. In some cases, the PayPal business merchant had an additional 20% taking from the account and put in a magical reserve account that was held until the account reached X amount, X amount based on previous sales history or whatever PayPal decides.

I am ditching PAYPAL for good / never to return this week and will be looking at merchant accounts via our Business Bank.

PayPal is not the place for the small guy anymore and it's current practices will eventually lead to it's destruction.


Ryan

 

[Rockefeller]

Yeah, I also dumped paypal after literally about 12-13 years of use, I was probably one of the first 500 sign ups. They have no loyalty to members that have stuck by them and all they care about is the money...period. I've been Paypal free now for about 2 months...I canceled my cards on my Paypal account so that sellers can send me invoices through email (only to an email that was not on your paypal account), also make sure that you're not using a card that was added to your Paypal account. Now I just pay the seller's invoice and be done with it.

 

[POLiSH]

Justin are you selling digital goods or physical goods.

 

[Onward]

I cannot stand paypal, but it seems I need it for subscription based services on sites I am developing

I think there is a paypal killer....it is at squareup.com - developed by twitter's founder...this is seriously good. I have it and it is by far the best solution for the little guy....I think web payments are coming.

 

[Rockefeller]

I use 2checkout for subscription based services and physical good sales on my sites...I use escrow, paypal invoice for direct wire for domain sales

 

[Onward]

I will look into 2checkout...thanks.

 

[POLiSH]

I'm going through the process of setting up a true merchant account now. With a true merchant account unlike PayPal, funds will be deposited into your bank account more regularly and your fees could also be significantly lower. One requirement is that your bank supports debited via ACH methods. I'll let you know how the process goes.

Ryan

 

[Tia Wood]

What I cannot handle is them taking 2.9% + .30 cents and on top of that holding 30% of any sales you make for 90 days in reserve and you cannot touch it, it's not yours and they take it.

Ryan

How and when did you experience this? I have a business account but not Paypal Pro. Is this something new?

 

[POLiSH]

How: every time someone orders using our PayPal Pro Website Payments Pro/Credit Card Processing.
When: it's happening now
And yes it's new.

Here is a copy of part of the email I received with them:

----------------
We'll bill you for all monthly fees on or around the first business day of each month.
Your customers will be able to pay with American Express, Visa, MasterCard, Discover, PayPal balance or bank transfers.

What are payment reserves?
Reserves are funds that belong to you that we set aside to make sure that you have money in your PayPal balance to cover any payment reversals.

After 90 days, your reserve funds will be released on a rolling basis. For example, we hold 30% of the total amount you receive at the end of the first day, and release the money on day 91. 30% of your payments that are held at the end of the second day will be released on day 92, and so on.

We regularly review reserve levels and make adjustments when possible. If we make any changes to your payment reserve, we'll email you right away.

Withdrawing funds
Usually you can withdraw funds within 1-2 business days. If we need more information from you, though, it may take up to 10 days.

 

[Tia Wood]

Seems like it only applies to a certain percentage and you were one of the unlucky ones:

http://www.studio1c.com/blog/29-business-startup/167-paypal-rolling-reserve-irks-many.html

PayPal may require that a small percentage of some of our sellers’ payment volume (from 5% to 20%) be held in their account for a period of time (30-90 day), sort of like a security deposit to cover future chargebacks and reversals.
To determine when to place a reserve, PayPal looks at the merchants risk factors - things like industry categories that have higher-than-average chargebacks, or sellers who are new to PayPal.
PayPal will reassess risk factors periodically, and if it is determined that the risk has gone down in certain seller accounts, they will release the reserve.
"We're requiring reserves for a very small percentage of sellers – currently less than 1%." Bill Clark, PayPal Risk Team Analyst

However, reading from the comments I see established accounts in good standing being hit with this. Unbelievable.

 

[POLiSH]

I'm done with them, period. . .

 

[Rockefeller]

I have also used authorize.net for years now...since i started escrowdns. I now use them to process client payments that would normally use paypal with their cards. Cheaper than pp too

 

[POLiSH]

Seems like it only applies to a certain percentage and you were one of the unlucky ones:

http://www.studio1c.com/blog/29-business-startup/167-paypal-rolling-reserve-irks-many.html


However, reading from the comments I see established accounts in good standing being hit with this. Unbelievable.

If they have let's say 250,000 business accounts 1% is a lot of accounts.