Paypal can put you out of business

[niczgreat]

There are many reasons why you should have a merchant account.

Many mainstream buyers do not accept Paypal and if they see a company that doesn't accept credit cards directly thinks that they aren't reputable.

In addition Paypal is a spurious company, they will lock funds at a moment notice and cut your account off without giving you a chance to work it out. I was exploring the forum and one supplier said. "I'm back in business" Paypal closed me down but I worked it out with them.

Does it make sense to put all your eggs in one basket. Paypal could on a moments notice decide to ban the industry they have done it to other industries. Their notoriously inefficient software has blackouts.Etc

Merchant accounts are less expensive and chargebacks are easier to fight.

A final thought if your business is 100% dependent on Paypal and it's more than a hobby to you isn't it logical to have an alternative source of payments.

 

[aspen]

I absolutely agree with you. Use all resources at your disposal and diverse your buisness model. The other would give claustrophobic feelings to me but each to their own.

 

[Jaaxx]

Victim #9,999,997 right here.

 

[blackbug]

That depends on your volume. To start out with a low turnover then it is a good alternative. I did when I started making money selling a certain brand of dermatalogical products online.

Any grown up business with migrate to a merchant account once they've got the accounts behind themselves to prove themselves to be a viable company to the processor.

Paypal almost did me over on several occasions because they have a tendancy to side with the consumer with disputes.

 

[tims]

You can use google check out as well, if paypal locks your account. Monthly fee's and other stuff scare many shops away from a merchant account, also not having a TAX ID is a problem unless your selling for a while.

I dislike paypal but the truth is for many they still are the best game in town, and buyers already have accounts with paypal and feel safer. Even google check out can't make much head way, and google is well known so that saying some thing.

The bottom line is you need to write off 10% no matter what, that is normal loses for doing biz with CC's. The problem is most sellers think, they are beyond losing any money when they are not. Merchant accounts hold your money to it clears, and will indeed take a charge back out of it.

 

[Toby]

PayPal is a risk - BUT GOOGLE CULLED MY CHECK-OUT AFTER 3 WEEKS - keep wondering if I might have got away with it if hadn't used Adwords (which they also culled of course). I deleted my thread on it cos I thought it was common knowledge....

But e-cigs is too precarious a business to warrant the high charges of merchant account too (but is obviously more ideal).

And don't forget customers want it easy (speaking as one) and PayPal is very convenient for them....

 

[happily]

Correct me if I'm wrong but isn't paypal a subsidiary of EBAY and EBAY is already halting e-cig sales.

 

[SleepHater]

google checkout specifically says in its policies that it does not allow the sale of cigarettes, tobacco or "alternative devices". Don't waste you time with google check out. It is a NO GO.

 

[Flitzanu]

i think there is also an inherent feeling of security with buyers using paypal since we aren't "handing over" cc info to small companies, whether or not it really is "safe" and if they see them or not. i can't say i'm one of them, but i do prefer paypal just because it's simple and quick.

 

[niczgreat]

i think there is also an inherent feeling of security with buyers using paypal since we aren't "handing over" cc info to small companies, whether or not it really is "safe" and if they see them or not. i can't say i'm one of them, but i do prefer paypal just because it's simple and quick.

Nothing wrong with Paypal as an Option. But there are buyers who won't or can't use them and again from a merchants standpoint if Paypal decides to lock you out, or Lock out a whole industry they can. They did it with adult rated products

 

[niczgreat]

I owned an online business and my credit card processing rate with the exception of American Express was lower than Paypal. I found that my chargeback rate on credit cards directly was far below that of Paypal users.

 

[CZEdwards]

Hey, tomzgreat -- first, what does the adult industry do? Is there a vendor? Also, who are you using? I saw a swipe machine at Costco, but who handles your online processing, if you don't mind sharing? (I'm not in business, but if you're willing to give a reference, as a customer, I'd be delighted to not use my paypal account anymore. I don't trust them as a buyer since they can and do screw over the buyers too...)

 

[tims]

If CC banks see ecigs as a tobacco device, there will be no CC sales online anymore. As they passed a law saying that much before, people need to stop calling them ecigs. Call them personal vaporizers, or even anything but ecigs as that just asking to get banned by CC banks.

 

[Rebecca]

I detest Paypal. As a seller the fees are outrageous and it's a hassle to set up multiple accounts at multiple banks in order to effectively "launder" your money in order to protect it from Paypal.

As a buyer, I don't feel the confidence or security some other posters talk about. I perceive a business using paypal as unprofessional. No matter how well put together your website is, no matter how solid your business operation is - when you only accept Paypal I imagine you as some guy "playing" at being a business, alone, in a dusty garage.

A merchant account tells me that you've convinced at least one bank that you're an actual business entity. A Payal account tells me that you have an email address.

Just my two cents.

 

[niczgreat]

Actually Costco does provide CC services. Premium members of Costco enjoy one of the lowest rates in the Industry. I don't know if they'd approve you but it's a good start. I was using a proprietary website at the time and they didn't support Costco's portal.
I'll look up the company that I used to use.
I also saw in the supplier forum a processing company that says his company has approved the industry. Remember you can pit these companies against each other to get the best deal. Often the place to begin is with your own bank. You have a relationship with them and they may be more likely to approve you. I know Wells Fargo was extremely aggressive a few years ago. But things have changed.

 

[Closet Toker]

It can suck for sellers. I sell on ebay and got "burned" several times myself. However, as mentioned, it is convenient and safe for the buyers.
On the flip side... I have purchased items through PayPal over the past 9 years and have never had a problem. I even got reimbursed several times on "bad" sellers merchandise.

 

[Taelon]

Safe for the buyers?

Massive PainPal troubles since their last system upgrade, even webservice crashes:

We are unable to complete your request.

An unexpected error has occurred.

Error message detail

java.lang.Exception: XssFilterSecurityException
at com.paypal.tool.filter.XssFilter.doFilter(XssFilter.java:69)
at weblogic.servlet.internal.FilterChainImpl.doFilter(FilterChainImpl.java:27)
at atg.servlet.pipeline.TailPipelineServlet.service(TailPipelineServlet.java:90)
at atg.servlet.pipeline.PipelineableServletImpl.passRequest(PipelineableServletImpl.java:116)
at atg.servlet.pipeline.DispatcherPipelineServletImpl.service(DispatcherPipelineServletImpl.java:202)
at atg.servlet.pipeline.PipelineableServletImpl.passRequest(PipelineableServletImpl.java:116)
at atg.userprofiling.ExpiredPasswordServlet.service(ExpiredPasswordServlet.java:356)
at atg.servlet.pipeline.PipelineableServletImpl.passRequest(PipelineableServletImpl.java:116)
at atg.servlet.pipeline.MimeTyperPipelineServlet.service(MimeTyperPipelineServlet.java:206)
....stack trace CROPPED after 10 lines.


Please try again later or resubmit your request now

xx:xx PDT Jul xx 2009

Such defects can lead to injection, privilege escalation and arbitrary code execution on the server.
So due to best internet security practice, PayPal cannot be taken as "safe" for online payments any longer!

 

[Toby]

OK, PayPal is not ideal; or far from it. They have deleted accounts before because of dealing in the dreaded menace of e-cigs.

But I take that risk because of consumer convenience (i.e speed in transaction) in PayPal, which the customer will ultimately prefer; and I estimate >90% of the time over your merchant account, if applicable.

Or you could just accept cash instead....

 

[niczgreat]

OK, PayPal is not ideal; or far from it. They have deleted accounts before because of dealing in the dreaded menace of e-cigs.

But I take that risk because of consumer convenience (i.e speed in transaction) in PayPal, which the customer will ultimately prefer; and I estimate >90% of the time over your merchant account, if applicable.

Or you could just accept cash instead....

I never said stop taking Paypal I just say that you should have an alternative to Paypal by accepting cards directly. You can do both they are not exclusive. Notice none of the merchants that take both are saying anything. I suspect that's because the merchants that take both have an competitive advantage. Why mention this to your competition.

I suspect around 20-30% customers would choose the credit card directly and the order amounts are higher for credit card customers.

 

[Toby]

Yes I agree with you (in theory) of course. But I am interested to know why you think -

I suspect around 20-30% customers would choose the credit card directly and the order amounts are higher for credit card customers.

Maybe it is different from my experience.... or in the UK?