Is PayPal convenient enough for businesses and individuals?

PayPal is here. High resolution wallpaper


PayPal, a well known name in the online market has been around the corner since a long time now. Millions of businesses online are using PayPal as the default system to receive the payments as well as majority of the buyers prefer paying using PayPal to avoid the security risks which might occur while paying directly using a credit card.

It was back in 1999, when the first version of PayPal was launched, within no time, PayPal reached to 1 million transaction and in an impressive move, it was acquired by eBay for $ 1.5 Billion in the year 2002.

PayPal is here. High resolution wallpaper

Acquiring Fraud Sciences and Bill Me Later made it easy for PayPal to convince the users that the transactions done using this platform are safe and the safety of the money as well as the payment details is assured. PayPal kept on growing at a rapid rate and became the most popular online payment platform beating Google CheckOut, AlertPay (Now known as Payza), Skrill, MoneyBookers and Payoneer.

Time has changed a lot since then. The internet marketplace is booming at a record rate and most of the new websites coming online are eCommerce businesses having a need of Payment gateways. The popularity of PayPal makes it obvious for most of the eCommerce websites to choose it as the default payment system.

However, there has always been a saying, everything has one good and one bad prospect. The popularity, convenience and safety are some of the most sought after qualities of PayPal which got the eCommerce start up to such high level, but are the conditions same for everyone?

That was a question which gave me some nice things to investigate. I have been using PayPal since a long time now (Yes, I first signed up for PayPal back in 2008) and I have had transactions of over half a million United State Dollars. Then what made me write this post? After all those years, what got me in a situation where I had to sit, investigate and write a detailed guide about the convenience for the businesses and individuals to use Paypal for the personal as well as business use.

Well, here I go. Let me first put up my own experience before I go onto some of the other issues which people face.

As I already told, I have been using PayPal since around 6 years now. It was always great till the time I was getting some small payments (Small Payments mean below 1000$ per transaction).

Recently, I had a problem. There was a transaction of around $ 10,000 which was a result of selling one of my online property. As always, I preferred to take the money via PayPal. Until the moment I received the payment everything was fine.

The buyer confirmed that the payment had been sent from his side by eCheque, I checked my mail and the notification of the money received was right there. I was excited until I got another email from PayPal saying

Your account is limited until we hear from you.

The subject of the mail was lot familiar to me, because most of the times I have got this kind of mail from some unauthorized source which is a phishing attempt (those kind of mails usually end up getting into the spam folder, but surprisingly this one was shown in the inbox). While checking for the source from which the mail was originated, it was confirmed that the mail was a genuine one from PayPal.

I logged into my account and found a warning saying my account has been limited. That was like a shocking thing, because I had never been into a situation of seeing this kind of message before. To get information, I clicked on the link which was shown there ad then I was taken to a page which explained about the issue in a lot more detail.

In the first impression, which proved out to be right later, I figured out that PayPal has considered this amount as suspicious. There were a few things which I needed to provide as information to help them verify my identity as well as the purpose for which the payment was received.

Immediately, I uploaded my Identity proof and the address proof along with a detailed description of the payment which I had just received and started waiting because it was an eCheque payment which usually takes around 3-5 days to get cleared, so I was pretty much assured that by the time this eCheque gets cleared, the limitation from my account would be removed and I would be able to use my account and withdraw the money. That was 2 AM, April 07, 2014 (8:30 PM GMT, 6th April, 2014).

I waited until April 09, there was no change in the status of the account. I was continuously checking my PayPal account and email because this was about a big payment. Finally, I got another mail on 9th saying that the payment was cancelled.

When the payment was in pending mode, I could see the notification saying that clearing the payment depends mainly on the account holder if he has that much amount, so the thought of him cancelling the transaction, I called the buyer, but he said that PayPal has limited his account as well and the money got back to his account. I had no option and I was clueless.

I spoke to the PayPal team, in India as well as in USA. They asked me to upload the documents and then I told that the documents were uploaded the moment this issue was noticed for the first time. I called them for over 10 times, and every time, they disconnected the phone saying my issue would be resolved in 48 working hours. It’s been a week today and I can not see any change in my account.

However, I own a company, but I did not have a PayPal account for that, so I just thought to create a new PayPal business account for my company and receive the payment through that. That seemed like a genuine option and I was totally up for that, so I signed up for the PayPal and provided all the details which were asked in the process.



To be on the safer side, I again thought to receive the payment in installments to avoid any further issues. I received the money in the multiples of $2500, for the first transaction, everything worked fine and I was happy, i asked the guy to send me the remaining payment the next day and when he sent me the payment on the next day, again I got the notification saying the same damn thing.

That made me really pissed. I called PayPal at the same moment just to clarify the issue. This time, the payment was sent directly to my account not via the eCheque. The amount is locked in my account and I am waiting for a solution.

However, this was my first experience with a business account. So I just though that could there be more people facing issues with PayPal? Could there be any more pissed customers of the most popular online payment system?

Future of money with PayPal

I thought to take opinions from people in my network and I posted this on my social media profiles. In fact there were a lot of unsatisfied people I got who were the victims of PayPal. Some of them had lost their accounts and some of them had lost their account even with money in that (Permanent Limitation). Look below for a few issues faced by those people.

Issue #1

The main thing which I noticed in the comments was that PayPal has removed many accounts which were limited for a certain period of time. Out of those, most of the users had money in their PayPal.

The amount of money never matters. The only thing which matters to me and thousands of other people is that they lose the faith in so called the best way to pay online. To prove my point, let me show some proof



PayPal issue

 

This guy in the above screenshot lost his 1000$, which is considered to be a big amount in countries like India. Let’s have a loot at another issue from another guy

Paypal payment issue



 

There are many more issues like this, which might take hell lot of time for me to list here. The concern is not about the number of people facing this issue, concern is the issue itself. There are many more people who have lost their hard earned money just because PayPal thought that the payment was suspicious?

People might come out in different ways on this. The limitation upto an extent is fine, but who takes the responsibility of an account getting deleted with out no reason?

Issue #2

Almost everyone staying outside United States has this issue. The main currency in which 90% of the transactions take place on PayPal is in USD. In those 90% customers, most of them are from other countries who have to change the currency before they can withdraw the amount and they end up paying a huge margin on the exchange.

The current day exchange rate between USD and Indian Rupee is 1 USD = Rs 59.40. However, if someone withdraws some money from PayPal to his bank account in India, the conversion rate being offered is 1 USD = Rs 57.70.

That is the difference of almost 3% of the total amount. That amount is not there in any records and the merchant has no choice than to pay that amount to PayPal directly. No matter what the conversion rate is (in last few months, I have seen India rupee moving s down as Rs 42/1$ and Rs 69/1$), the customers always need to pay that much amount for an undisclosed cause. Sometimes it just does not get digested.

Issue #3

No matter who you are and how much sales you make monthly. You need to pay a certain percent of every transaction to PayPal. This is something which is cruel on PayPal’s part.

Several other payment gateways are out there in the market which charge according to the transaction. If the transaction is below a certain amount, then the percent of amount charged would be lesser as compared to the amount charged when the total worth of the transaction is more than the proposed limit.

For example, back in 2011, I used to provide some on page optimization solutions for the websites and I used to charge as low as $10 per site. Now in that amount also, I had to pay $0.30 + 4.99% of the total transaction as well as now, when I charge $1000+ for the services I provide, I need to pay on the same basis which gives a lot of hard earned money to PayPal.

For an example, If I receive $ 2500 via PayPal, the money which will end up in my account is only $2389, that means I paid $111 to PayPal just for receiving the money and then further I need to pay more money if I withdraw the amount to my bank account.

People are mainly in the habit of getting through this. Few of the customers have tried to reach out to PayPal to make sure they pay lesser money if they receive more amount via PayPal so that they can be encouraged to target more customers.

There are several other issues faced by PayPal customers all over the world, if you are also someone who faced an issue because of PayPal, do let me know via comments and I will feature your story on the same page.

Good Luck. 🙂