Some folks on this thread have suggested that you open your own merchant account. FWIW, you're likely to face the same problems with that route if the underwriting department takes a good look at your business model. If you're selling "experiences", it's too hard to demonstrate whether your clients did or did not receive the alleged service. You're likely going to open yourself up to a huge risk of chargebacks -- remember, you're now vouching for the performance of each and every one of your "experience vendors". A chargeback rate of just a few percent would eat up all of your profits, and get your merchant account canceled to boot.<p>It would also be incredibly easy for me to launder money or commit fraud with your system -- I could just set up a fake experience, like navel gazing, at $100 per, and buy up unlimited sessions with stolen credit cards, or give myself a massive cash advance at purchase interest rates, with a small mark-up. Maybe I'm missing it, but if your system doesn't include some way to reserve the time for the "experience", then there's really no way to ensure that your vendors are not double- or triple-booking their time.<p>To summarize, the financial risks of your business model run far beyond PayPal. If you can come up with ways to hedge against these risks, you might even be able to convince PayPal to take you on (though I wouldn't count on it).
Hmm, this isn't a "Paypal horror story". This is a case of Paypal getting around to due diligence on a new customer and realising that they are not in line with the terms and conditions.<p>You <i>are</i> accepting payments on behalf of other merchants (those offering travel experiences) and that brings risk. Unfortunately this is not an issue limited only to Paypal, many other payment operators will reject you for the same reason; the fraud liability is just all over the place with such systems and they won't want to take the risk.<p>It sucks, but there you go.<p>If you are really looking at 10's of Millions in revenue over the next few years.... go to your bank and work something out with them, although it might be initially expensive while the offset the risk.
I know there are plenty of legitimate PayPal horror stories, but this I’m not sure this quite qualifies. The first parts of the story are vanilla PayPal evil, sure.<p>But at the end, PayPal accuses them of offering an aggregation service. They say they are building a “a global marketplace” that “enables a brand new community of merchants and transactions”. There is not a lot of detail, but it sounds like they are taking money from customers and paying it to sellers, which sounds like an aggregation service to me.<p>They compare themselves to Etsy. But Etsy doesn’t accept PayPal payments themselves. You pay to the seller’s PayPal account.<p>There may be something I’m missing—it’s not entirely clear, so maybe they do in fact operate more like Etsy—but from the account provided it seems like PayPal has a case.
I've stopped being surprised at this genre of story showing up - on HN or elsewhere. This story basically serves to illustrate a couple of things about Paypal that are definitely salient, but haven't changed in years.<p>* Banks are still shitty and unwilling to actually compete, so Paypal has its market all to itself.<p>* Because Paypal does not fear disruption or competition, it is <i>not worth their time</i> to invest in good customer service. They know you're stuck.<p>This is pretty much the same as the stories about trying to get customer service from Google. There are no effective competitors - so, their accountants and shareholders say, who the fuck cares if customers complain? What are they going to do, go to someone else? Doing so would harm the customers more than it would harm the company that they are abandoning.<p>I use the phrase "not worth their time" even though it implies things about the employees of the company which are not true - I use it because it is true of the company itself as an entity. It's a corporation - it's a sociopath. So it is basically incapable of providing good customer service as long as the return on investment of good customer service is negative, epsilon, or invisible. The employees, as people, probably do want to provide good customer service! But when it comes down to the human, humane desires of a corporation's employees conflicting with the sociopathic requirements of the corporation itself, we only need a brief look at the history of commerce in America. Put your money on the corporation's interests winning every time.<p>PayPal (and Google) will keep giving customers the finger until the thought of customers leaving actually scares them.
For what it's worth, travel is a high-risk vertical and you're going to draw the evil eye from any competent operator if that is your focus. See also selling high end electronics or jewelry, among many other seedier business types.<p>Also FWIW: Paypal has processed close to 100k for me without complaint, and their review of my business for getting a merchant account was quick, professional, and successful. (Partly because I knew to avoid risk-adding activities like accepting yearly payments with a new business. Don't do that. Don't do aggregation. Don't do anything which envisions customers routinely receiving chargebacks or refunds.)
Sadly, for what you want to do, you essentially need to be a merchant bank yourself. Your business model seems to involve collecting payments on behalf of other people. Most merchant agreements from ANY bank or service provider would prohibit this activity.<p>Without the correct processes and procedures in place you open yourself up to issues involving money laundering and tax fraud. To do this right you need to spend the money on the identity, security and conflict resolution processes and procedures to ensure you mitigate this risk. The costs of real merchant services will pale in comparison to what you will spend on these issues.
> PayPal doesn’t want their cut of tens of millions of dollars of revenue we project in the next two years. Any idea of who does?<p>Get a real merchant account and a payment gateway. I recommend Authorize.NET. Get it from one of the re-sellers, it's cheaper than getting it directly from them. There are no shortcuts: you have to compare different vendors, do your research on what all the fees mean and who offers the best value. You CAN negotiate.
I have less than no sympathy for businesses with Paypal horror stories at this point. Paypal's reputation is very well known, especially in startup circles, and there are a ton of other services available that will handle payments for startups. There have been several HN threads about them, and it's not too hard to find those on searchyc.com.<p>If you're starting a business, and you're relying on Paypal to do it, then you're foolishly adding totally unnecessary risk to your business.
Paypal is a classic example of a fossilized bureaucracy:<p>1) The departments within Paypal are unable to share information, alert each other of status, or become aware of what they are each doing. The first clue that this is happening inside an organization is the requirement to submit (or resubmit) the same information multiple times.<p>2) Complete inflexibility. If you don't fit a pigeonhole profile of previously defined customer models <i>exactly</i> you can't use the service.<p>3) No humans. There were people once. There aren't anymore. The people you talk to on the phone seem human, but they are actually part of the machine's broken user interface. They can no more influence what goes on inside the machine than you can. They can't tell you why your account was frozen because literally <i>nobody anywhere actually knows</i>.<p>4) Insistence that you are wrong (or a criminal in this case). The customer is always <i>wrong</i>. Enough said.<p>Add to all this a moral hazard so large it almost completely guarantees it will never be fixed: when the system breaks, they just keep the money, and you're got a perfect recipe for perpetual fail.
I've been resisting the urge to market my startup as a PayPal alternative, because we're really focused on payments for in-person retail sales (largely to avoid competing with PayPal), but this is probably the fifth or sixth PayPal-froze-my-account posting I've seen on Hacker News and they all seem to garner enormous amounts of sympathy from readers. We've also built all of the infrastructure you'd need to do internet payments. As an aside, my non-profit's account was frozen once but I got it unfrozen in fairly short order, and at worst it was a minor annoyance. I gather that people have had much worse experiences, however. So that leads me to wonder:<p>- Would people really consider signing up for a payment startup's services they'd never heard of? Everyone complains about PayPal, and I'd argue rightly so, but at the same time everyone is also quick to say that they don't trust a company they don't know with their information.<p>- What's the most important service that PayPal offers that people are looking for? Just plain, vanilla, pay-me-through-my-web-site? Something else?<p>- Are these accounts that are routinely frozen related to international transactions somehow? Because we can't do business internationally and most payment startups can't. The regulatory and risk barriers are serious.<p>If there's a market for U.S.-based services that we can offer, maybe it's time to think more seriously about starting to compete.
If anyone thinks they can set up online payment processing system that accepts payments from credit cards, debit cards, echecks, and direct debit transfers worldwide easier and with less hassle than paypal then they should do that. As it happens there are some very real niches where paypal has almost no significant competition.
I'm almost falling of my chair laughing (I do feel bad about this), but we've had so many similar issues with PayPal it is just crazy to think they once were the small guys fighting the establishment.<p>What you are trying to do is indeed very likely against their TOS, but the whole process is just appalling. I highly recommend looking at WePay. They might be a much better fit for you anyway (not just credit card payments, but also very low cost bank transfers).<p>Try to get a regular merchant account, but if I understand your business model you'll likely be rejected, or face unrealistic high fees. Maybe when you can show them some transaction history you'll have more luck.
I cash several tens of thousands Euro every year in Paypal, since 2003 I guess.
I have legitimate business in Germany and the money is deposits for apartments reservations.
I have never done anything illegal, never had a dispute with a customer, never, ever created a problem for them.
Nevertheless they freeze my account once every 2 months.
They ask me a few papers, I send thema and if I'm lucky in a few days it's restored.
If I am not lucky it goes one one month.
I would have many nice stories to say, this is the last one:
since I log in often from many different countries (since 2003), they block my account.
So I asked them to write down somewhere that I travel a lot and give me a break.
They told me this is not possible and I should use only my iPad to login, not a computer.
I'm confused. PayPal offers a 3-party payment product, where you can accept a payment and split the proceeds between yourself and another seller. They call it "chained" payments.<p><a href="https://www.x.com/servlet/JiveServlet/download/1044-1-1033/pp_dev_Datasheet_APC_R3.pdf" rel="nofollow">https://www.x.com/servlet/JiveServlet/download/1044-1-1033/p...</a><p>Why doesn't this work for your scenario?
Wow, incredibly timely- this is EXACTLY what we've been going through for the last two weeks. EXACTLY.<p>The problem with PayPal is that there is absolutely "0" real customer support. We were labeled as a "money transfer service"- even though that's not our business- and had our acct suspended. Our site isn't public yet, we were just testing live payments as opposed to the already completed sandbox tests. We thought we'd be ok since we modeled our pay structure similar to a few others we had seen.<p>When you call PayPal, you get a nice enough customer service rep- friendly but really doesn't know anything. They put a "note" on our acct to have someone higher up call us back...and that's when the real fun begins.<p>If you're lucky enough to have the rep call you (we're like 2/7), you can get some limited info. If you miss the call, or have an additional question after the fact, you have to go through the first level of general cust. service and hope that someone will call you back. No left messages, no other phone number you can call, definitely no dedicated rep. it's taking weeks out of our production dev time.<p>What makes this mockery of service so severe is that our business depends on buyers paying sellers. We got a form email letting us know of our general "violation", but no specifics. It's up to us to interpret what exactly violates their policies. Thanks to this article, and everyone's comments, I do understand some areas where we possibly made an error- which I take responsibility for- but without a definite response we won't know if we accidentally violate it again when we spend more to retool our system.<p>It's ridiculous.
I have heard enough horror stories about Paypal from others, and had enough hassle from them myself, that I never use them whenever there is another payment option.<p>How easy would it be to set up an online transaction site that was actually easy and hassle-free to use? One where:<p>(a) costs of transferring money to another account are low, and similar to the cost of performing the transaction, not the 3-5% of transaction that Paypal and credit cards charge. The only thing that might be expensive is getting money in and out of the site, because you'd have to go through the traditional banking industry.<p>(b) where there is no distinction between merchant accounts and other accounts. Why should there be? All accounts should be able to send and receive money.<p>(c) the site started off with some ways you could spend/get money, e.g. something like flickr, adsense/adwords, and web hosting.<p>(d) there would be no credit protection; if Alice give money to Bob and then isn't satisfied with the goods the she received from Bob, she should take it up with him not with the transaction service.<p>(e) the service would have apis that made it easy for other companies to build services around.<p>I'm assuming it would be difficult to impossible due to banking laws -- does anyone know better?
Take the same approach as grubwith.us and groupon did, avoid the PayPal risk.<p>However, if you believe there's a significant advantage of having PayPal (doubt it), then you may want to consider setting up an eBay store and handle all payments for reservations through BINs on ebay pages... vayable.com would then become a "wrapper" around your ebay store. Additionally if you get significant traction, you may get $10-40 for every person who registers with ebay through your links.
Hey guys seriously is there any "real" alternative to pay pal? I'm getting sick about these stories.<p>To be honest my account got never frozen but I also never sold anything with Paypal. I don't want to support this insane service.<p>What about using Amazon payment? I payed once with Amazon on kickstarter and was surprised how smooth it was! Is Amazon a valid alternative?
> "PayPal doesn’t want their cut of tens of millions of dollars of revenue we project in the next two years. Any idea of who does?"<p>If you makes you feel any better, I offered them a cut of a projected billion dollars and they still didn't take it.<p>More seriously though, just go to your bank and open a merchant account.
My dad had a small eBay business several years ago and his account was frozen for some very illegitimate reasons. I was too young to really understand then, but in light of this and several other similar cases I've read about online, I'd stay away from PayPal.
With all these Paypal horror stories(this one you could see Paypal's side at least) of inflexible bureaucracy, what I find most ironic is that it was started with highly idealistic libertarian aspirations in mind.<p>Somewhere along the way something important was lost.
I also find the fact that the official email from PayPal is just signed "Julie" with no surname and just comes from a generic sink account, thus eliminating any chance of actually following up the problem with a human being rather annoying.
Slightly OT:<p>I've been looking into paypal alternatives but there really wasn't anything available, besides setting up a merchant account, for non-US businesses.<p>Does anyone know of any similar service available internationally?