Comments on: PayPal reserves: here's what's really happening

By: Lino

Lino — Tue, 17 Mar 2009 17:25:32 +0000

#84 We use Secure Trading, and have found them to be excellent.

By: Paul

Paul — Tue, 17 Mar 2009 17:18:42 +0000

# 80 I’m just setting up a website, Whirly, and wondering what payment plan to use. I’m pretty sure what not to use, though. What’s the story with Protx? I hear a bit about it, mostly good but haven’t explored it yet.

By: Lino

Lino — Tue, 17 Mar 2009 16:30:18 +0000

#82 It’s not great.

We feel quite lucky that our reserve is only 3%. Some sellers’ we’ve heard from are having to stomach 10% reserves!

We also asked whether we would be able to earn interest off the reserve, but we’re told due to Paypal’s Banking License this wouldn’t be possible. But we were told this is an option for US reserves.

We’re still selling well on eBay, but are definitely looking to concentrate a lot more time and money away from eBay as a result of this.

By: Whirly

Whirly — Tue, 17 Mar 2009 15:46:27 +0000

#82 Frightening stuff.

PP could effectively hold onto your companies profits for the entire duration of your business, increasing the amount they hold as you grow.

This must be a total nightmare for any seller effected, especially if you sell on eBay, your only choice then is to leave eBay or lump it and try and survive with a big chunk of your cash taken away from you.

By: Lino

Lino — Tue, 17 Mar 2009 15:00:05 +0000

We’ve recently had our 90 day Reserve reviewed by Paypal. We sent them all the information they asked for, and they admitted our company is in a healthy state.
However, they say they will not be removing the reserve, nor will they be looking to do this in future.
They are now saying that the reserve is to cover Paypal should we go bankrupt as they would be liable for all transactions up to 6 months down the line (I thought that was why we paid the fees?).
The impression we were given was that Paypal were looking to place these reserves to as many accounts as possible over time.
We were told that the % Paypal hold would be increased should our turnover with Paypal increase. Not really much of an incentive to grow with Paypal.
All this came to light after speaking to a member of their ‘Risk’ team, and some of it does contradict previous conversations with them.
We asked directly whether there was anything we could do or suppy to Paypal in order to have the reserve removed, and were told quite clearly “No”.

If you’ve got a reserve on your acccount, get used to it. And if you haven’t, I’d get ready for it.

By: Matthew J. Bannick

Matthew J. Bannick — Tue, 17 Mar 2009 14:10:22 +0000

Sadly, although it is hard to prove that in court (you know, the law sides with the ones who have the money, not necessarily the ones who are morally just), it seems that PayPal was hijacked by criminal organizations. Think about it: if you want to launder money, wouldn't a company like PayPal be the best vehicle for that? If you want to learn more about what's /really/ happening in PayPal, read this inside information in the following link: I was a middle management type with Pay-Pal

By: Whirly

Whirly — Tue, 17 Mar 2009 11:02:36 +0000

#78 Try Protx if available to you. Fantastic company.

By: Sue Bailey

Sue Bailey — Tue, 17 Mar 2009 10:55:30 +0000

I’ve no way of measuring this, but a fairly high proportion of people complaining about PayPal holds seem to be those offering it to pay for software downloads (off-eBay, obviously). Anyone who sells downloadables probably should start looking for alternative payment processors ASAP.

By: Software Candy

Software Candy — Tue, 17 Mar 2009 06:04:10 +0000

Same exact story as Philip Lamb (#77, March 15, 2009 11:20 am) described:

We, at Software Candy, just got the email, stating that reserve of 10% with a 60-day rolling period is being placed on our account. We use PayPal to process sales of software, downloadable directly from our web site (http://www.softwarecandy.com). We have never had a chargeback or a dispute. We are a 100% reliable & responsible customer oriented business, solving any and every customer concern to his/her FULL satisfaction. So clearly, there is something strange going on in PayPal.

As I read through the comments here, the picture becomes clearer… Very good suggestions are given here. Serious businesses should diversify their payment options, not limiting themselves to PayPal only, Google Checkout only, Moneybookers only, Authorize.net only, etc.

By: Philip Lamb

Philip Lamb — Sun, 15 Mar 2009 11:28:25 +0000

Our experience with the PayPal reserve notice.. just got the email, stating that reserve of 10% with a 60-day rolling period is being placed on our account. We use PayPal to process sales of software, a few thousand per month. We’ve NEVER had a chargeback or a dispute. so for PayPal to state that that is the main motivation is just a red herring.

To me, this whole thing stinks like a company that wants some working capital at the expense of its customers. 10% of a whole lot of customers’ money for up to 90 days is a great boost to their cashflow.

Basically, because of this, we are ditching PayPal. We are not going to have our business compromised by dealing with an organisation so opaque as PayPal who treat their customers (us!) with such a patronising disdainful attitude. Our search for an alternate online payment processor has given us several leads, including Paymate (Australian) and of course, Google Checkout.

Good luck to those of you who are forced to stick with PayPal, and all tghe best to you as you involuntarily turn your business profits into a slush fund for PayPal’s.