PayPal Online Payment System Review
July 21, 2008
Paypal is becoming a more-ingrained part of the Internet. If you’ve ever been worried about security problems using Paypal, keep reading. The service is pretty invaluable, but it’s also had some ups and downs.
What exactly is Paypal: it’s a online payment system allowing payments online without having to deal with money orders, checks, or inputting your credit card on a new site. More and more vendors are incorporating Paypal into shopping carts. For vendors, this is a cheaper and easier system than creating a merchant account for credit card processing. For spenders, it’s easier to have one type of payment system. Paypal users enter in a credit or debit card number and the funds are taken out that card. This is a free service for the majority of users, but people with a very active account, such as top eBay sellers, will need to get a higher-end Premier account to process additional transactions.
Paypal also accepts payments for individuals, rather than businesses. Each user can be paid through an email address – though basic accounts are limited to 5 debit card transaction and $500 per month. Once the funds are uploaded to Paypal, the user has a number of choices. Most commonly, users transfer these funds directly to a bank account. This is free, though a bank could charge for the transfer.
There are some fees associated with Paypal – but these are normally associated with online vendors selling a product, rather than people making purchases. There can be increased fees depending on the country of origin, type of currency, and the amount of money sent. Currently, Paypal has 164 million accounts and operates all over the world in 190 markets.
Problems with Paypal
Paypal is not without its problems, as exemplified by the site, Paypalsucks.com, which is on a crusade against the money transfer company. Their main complaints against Paypal are:
- Limited fraud protection. Unlike credit cards, if someone uses your Paypal account, you could be liable to those charges. However, if the Paypal account is connected to a credit card, you could dispute a purchase directly. In addition, Paypal offers increased anti-fraud and chargeback protection now than when these types of charges were first made.
- Paypal is vulnerable to identity theft, such as phishing scams, in which scammers set up dummy, look-alike sites to get financial information. If you’re the victim of one of these scams, Paypal has limited protection for users.
- It is at Paypal’s discretion to freeze or unload your account if they feel there has been unethical or fraudulent activity. This has happened to people who were entirely innocent, or they were penalized because someone paid them with a stolen credit card, which is entirely out of a person’s control.
This post doesn’t mean to shill for Paypal, but none of these issues appear to be too drastic. Take #2: any web surfer should be well aware of phishing and spam email schemes, so the surfer does bear some responsibility. A couple of years ago there were a lot of spam Paypal emails phishing for info, but these have fallen back a bit recently. A way to avoid #3 is to transfer funds as soon as their received in the account. However, if you’re using those funds to buy things, rather than attaching the Paypal account to a credit or debit card, then you’re going to have to leave the funds standing. The recommendation: attach the Paypal account to a card with some consumer protection.
Finally, a MAJOR caveat to those complaints. The PaypalSucks site links to a Paypal alternative called National Merchant Bancard, so there is something slightly duplicitous about the site itself. That said, the site does raise some issues that you should look out for. Generally, you should feel pretty secure using Paypal. The value in Paypal is that it is actually more secure: instead of plugging in sensitive financial info on an unverified website, you can pay through Paypal and feel more secure about the transaction.
Writer Auditions – Author Henry Brown – Offer Your Feedback
There is no site out there that is perfect, however PayPal comes pretty close. The fact that someone has a site out there bagging on PayPal is funny but sad. They do a really great job and have helped my business make some money.
As a struggling (I mean budding) entrepreneur they offer a great free service (though they charge you for your transactions with people).
I would recommend them to anyone and would shun anyone who was against them. As they would say on Charlie The Unicorn off Youtube
“Shun the non believer”
“Shun”
“Shunnnnnnnnn”
PayPal can be very handy and makes life easier when using Ebay. However, I am not a big fan of the negative issues with PayPal, therefore I try to never have more than a couple of hundred dollars in my PayPal account. I do like the cash back bonus for using the PayPal debit card and the small amount of interest you earn on your cash. Too risky to be a bank replacement or a place to keep lots of money though.
I have heard pretty good reviews about Paypal but is it really safe having an account online with all your information on it? I feel like it would be too public!
Valerie, having info on the Paypal site is secure – as secure as storing your credit card info on Amazon, though you’ve got to do stuff on your end like set up a firewall, anti-virus, anti-spyware, and the like. The main complaint people have about Paypal is that accounts get frozen, seemingly for no reason. This is actually a safety net to ensure that the site is secure by weeding out illegal activity, but innocent people have had their accounts frozen. This is not a rampant problem, however, and all the Paypal scare sites (Paypalsucks, Paypalwarning.com, Aboutpaypal.org) are set up to shill for another online payment provider. Basically, you should feel just fine using Paypal.
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Paypal is great for buyers..and paypal USED to be great for sellers.. someone stole a credit card and purchsed an item from me on ebay and boy did i suffer for that..they froze my account and held $700 from me for 6 months over the whole thing..even though I wasnt the one who stole the account.. so in the meantime i took my losses for that and opened another account and thought all was jolly..was selling my behind off sending everything out then for no reason 1 month after tallying up all the money in the account paypal freezes me again for no reason at all. try to call them and sometimes you get an american whos great and helps you out the other times get some foreign who cant even spell paypal let alone work for it. i hate they only allow you to withdraw $500 a month unless you do this or that…paypal has literally stolen over $2,000 from me, i am out my product i shipped and my money.. i truly hate paypal and it really sucks that they are the only site that works so well with ebay..boy do i wish someone made an alternative to paypal that was just like them without all the freezing like they are the IRS. man i can just imagine how much money they have stolen from there loyal customers..yeah so paypal sucks and any idiot who dosent think so than needs to see the kinda crap they are pulling on sellers these days.
Here are some facts about PayPal that you may all know, by now.
1) PayPal does not provide it’s Business Customers with any Credit Card Merchant ID’s, which in turn means that any Business using PayPal as the Card Processor, will not be able to contact American Express, Visa, and MasterCard, to verify billing and shipping information.
2) PayPal’s Confirmed addresses, are not always verified addresses, and can be checked out, by using any of the free tools on the Internet, such as Whitepages, proving that no such person ever lived at the given addres.
3) PayPal Merchants do not have the option to participate in the Verified by Visa, and MasterCard programs, thus hindering merchants from gaining an additional layer of security, which benefits Customer’s the same way as it does Merchants.
4) PayPal does not provide any information, when a Chargeback is received, unless, a Merchant pursues a Court Order/Subpoena, thus ensuring that most Merchants, will not pursue any legal action, especially if a Chargeback amounts to less than a couple of hundred dollars.
5) PayPal treats all chargebacks, the same, be it; Non-receipt, Received not as specified, or Unauthorized Charge, although an Unauthorized is something that no Merchant can fully protect themselves, no matter what measures are set in place.
6) PayPal does not include a Address Verification System tool as a standard free tool. Merchants have to pay an additional Monthly fee + Charge to each transaction,
Any Merchant, that feels that they were wronged, by any of the above mentioned issues, should contact their local and State Representatives.
Yes paypal is awful! I used to not think so until they recently let a buyer screw me over. I have a no returns policy (sorry, but it is in black and white on the auction before buying) and yet I buy insurance out of my pocket to guarantee against any damage in shipment. An item was damaged, the buyer told me how much it would cost to fix item, so I told her I would pay it…WITH proof of course. An estimate was all I needed to that I could claim it on the insurance. The buyer then threw a fit and filed a dispute with paypal. She won. Though I have my policy AND was willing to work with her so that she didn’t have any money out of pocket to get the item fixed. Now I’ve sent three different emails to paypal and all I get back are automated responses. NO ONE there will talk to me, no one will pay attention to their lack of seller protection. So now I’m out $500 because of paypal. Oh, and THEN the buyer starts to claim that she is willing to do anything so that I cannot claim the damages! So a vindictive lying b…buyer is the one that paypal helps, not the seller that has had a paypal account since they where FIRST online. Seriously.
I was working on building a website and decided I would give PayPal a try since they will process credit card payments. I did two test runs to see how the transactions would process. The first time I got a fictitious email saying that someone was trying to access my account and to click on the link in the email to resolve the issue. That one was a phishing scam. The next time I tried internet explorer shut down because there was a possibility that malicious software was trying to download onto my computer. Needless to say I will have to find another alternative to PayPal.
OMG!!! I wish there was a legitimate alternative to Paypal. I completely agree with what many above me have said. Paypal blows!
They have a resolution department that is simply a joke. I purchased something on ebay. They seller didn’t keep up their end of the bargain so I disputed it. Told them that I never received the information that was supposed to be sent to me. They get back with this douche in China who says that he sent it to me. There is no tracking information possible but that he did it and they should take his word for it. They complete the dispute and agree with the seller. I am out $5. Fine, lesson learned. I should have checked everything out more. I have used paypal and ebay for 8 years, but I messed up on this one.
I then get an e-mail from PP about 2 weeks later informing me of a buyer disputing an item that I sold 2 MONTHS prior. Seriously? You are going to wait 2 months to notify that you didn’t receive an item that you paid $90 for and on top of that you aren’t even going to contact the seller to verify that it was shipped? HA, scammer! Now, I learned that you have to have tracking on anything that you sell with PP. PP tells me if I can’t provide a tracking number for the shipment then I have to payback the money. Wait a second, you are telling me I have to have a tracking number or refund the money? Okay, what happened on the transaction I disputed and there wasn’t a tracking number. You still found in favor of the seller? You change that and I will gladly pay this. You can’t tell me both….what morons. Gladly I didn’t have any money in my PP account at the time so they are waiting for me to send them the money. HAHAHAHAHA!!! Like that is ever going to happen. I will french kiss a horses butt before that happens!! Luckily I have a friend from high school that is an attorney. The moment they try to take the money out of my account, the suit gets filed. Bring it PP. I promise you will receive a counter suit for expenses and so much more!
BTW, if anyone knows of a truly legit alternative to PP, please post it here for all of us to look at.
Happy Holidays
PayPal is ridiculous. I cannot wait until ACTUAL businessmen (and not scam artists) come up with a smooth alternative that all can benefit from. It also doesn’t take a genius to figure out the little trick eBay is pulling by first purchasing PayPal, and then almost forcing people to use it. eBay might own PayPal and Skype, but as long as there are moral, motivated, educated people out there, their expansion and law-bending will be short lived. I wouldn’t invest in them. Don’t let the “PayPal revenues to double by 2011″ headlines influence your judgment. After all, PayPal doesn’t have a good track record for being honest or ethical. All it will take is a law suit that they cant get out of by paying a measly $9.25mil.
After my recent dealings with Paypal I can promise them and anyone else I will NEVER deal with them ever, ever, ever again – not even if I had to crawl over ten miles of broken beer bottles to pay an account by another method. I had my account “limited” for some reason I have yet to be informed of (despite requesting they give me the reason on numerous occasions) and I even had to pay THEM to go through some bizarre rigmarole to reinstate my account. I was made to feel like a criminal and it was an experience I will never repeat with Paypal. I have lost count of how many of their staff wrote emails to me (after much delay and always a different name!) and there was never any apology nor reason for my account being “limited”. They still owe me a few dollars but I find it difficult even to write their name without feeling furious, let alone go through any more dealings with them to extract what they owe me – completely, absolutely, shocking experience. Anyone with any doubts should consider how any company can survive with web pages devoted to their shocking service, namely http://www.paypalsucks.com. and http://www.aboutpaypal.org and others. I only wish I had done the research before I used them.Get lost Paypal
One of the nice features that PayPal offers was being able to email my customers a copy of the invoice that we gave them when we serviced their location. And the emailed invoice had a “PayNow” button. But there appear to be challenges when the customer does not have a PayPal account.
Has anyone found a similar feature/function?
Thanks!
After almost 5 years, it finally happened. A buyer succeeded scamming me.
On Nov 27th 2009, I sold a iPhone for $745 on Paypal. Sure-thing, verified buyer and confirmed address. Jan 22nd 2010, I receive an email from Paypal claiming that a chargeback was filed against this transaction.
This link Understanding Chargebacks has it written, every seller should know this… https://www.paypal.com/us/cgi-bin/webscr?cmd=xpt/Marketing/securitycenter/sell/ChargebackGuide1
Excerpt from paypal website:
“Chargebacks and sellers.
Sellers who accept credit card payments run the risk of receiving chargebacks. Most sellers factor potential chargeback losses into the cost of doing business. ”
Paypal seller protection is a joke, but so is every transaction that is done with a credit card. The buyer has so many options to file a chargeback. I ‘wish’ paypal would cover this, but I also wish that I was a billionaire
. Seriously, if paypal ever covered Chargebacks, they would be bust already by now… There is too much Fraud… with the FBI would crack and follow the leads…
Or if only FedEx or UPS had a shipping service that used Photo ID’s to match the receiver at delivery…. I would gladly pay an additional $10 when I am shipping something worth over $500…
Anyway, as it is.. I cleared my negative balance in paypal, I have less than $5000 total sales anually… and margin is slim as it is… That scammer wiped all of my earnings from 2009 and then some… but I am moving on…
I wouldn’t use PAYPAL to buy a piece of bubble gum, they SUCK, they are only for the buyer NOT the seller, EXAMPLE: I sold a person( whom I thought they were who they said) something for $150.00 and they filed a complaint to there credit card company and the charges were reversed on my PAYPAL account so now I have a NEGATIVE balance for 72 days and they keep reassuring me that they will fight the case in my favor, WHATEVER that did not happen so now I have been out $300.00 with PAYPAL and they DONT GIVE A CRAP!! There MANAGEMENT TEAM ARE VERY RUDE, I hope everyone reads this before the decide to USE PAYPAL!! HORRIBLE EXPERIENCE