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What if banks operated like Paypal?

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#1 Thomas H. Keoppel

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Posted 23 February 2016 - 10:38 PM

Let me paint a picture for you:
Imagine you want to open a business account at a bank.
You are not asking to borrow money, you just need an account to handle your money.
The bank will first want to review your business plan anyway.
That being done, they approve your account.
After a about a month, the bank notices you are doing some pretty large transactions, so they decide to review your business plan again.
Still good.
A few months pass, and your business has been having phenomenal growth.
 The bank takes another look and decides because you are doing so well, to give you a special account with lower fees.
A couple more months pass, another review, even though there has been no change on the part of your business other than constant growth, the bank wants you to increase your reserve funds.
Just to make the bank comfortable, so you do.
Then a couple weeks later, out of the blue, the bank calls to invite you to come in for a meeting.
They tell you they have changed their policy, and you will need to change the way you do business in order to comply with these changes.
After about a month of trying to negotiate an agreement, acceptable terms can not be reached between the two parties.
So the bank freezes your account, you will not be able to touch any of your money for 180 days!
How convenient that you just made a rather large deposit at the banks request.
This may sound like a nightmare fiction story, but Paypal did just this,
minus the initial review.
They would rather let people use their service, and then decide at some later point in time, if that business meets their terms.
If it does not, that account gets frozen.
This practice has caused thousands upon thousands of people like me to lose untold amounts of money, because most business are forced to fold. And who knows how much time has been wasted in the building of those businesses.
I am no expert, but I doubt a bank in this country could get away with this.
Who would do business with a financial institution like that?
Now the point of all this: Is there anything that can be done to compel Paypal to change the way they do business, and stop killing internet businesses?
I am afraid to put my name on this because Paypal may find a reason to freeze my account, but what the hell.
Best wishes for success,

Thomas H. Keoppel


P.S. I am mad as hell and I am not going to take it any more!

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#2 Garrett Hutsko

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Posted 24 February 2016 - 12:11 PM


It is bad enough that the Government is trying to cause small businesses to fold now the main online money handler is following and doing the same. I wish there was an alternative but I guess we need to do the best we can in order to move forward.

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#3 market101



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Posted 04 March 2016 - 10:53 AM

Is there already another online company that does what paypal does, but is affiliate-friendly?

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#4 sm62


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Posted 25 December 2016 - 07:58 PM

Is there already another online company that does what paypal does, but is affiliate-friendly? 

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#5 mrclean0325



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Posted 27 December 2016 - 05:59 PM

The main problem is PayPal is not a bank and doesn't have to follow any bank rules. They make whatever rules they want and the people that use them have to comply or tough cookies. It is no different than using "Uncle Guido" to process your money and he can make the terms whatever he wants depending on his mood. "Oh, I have thousands of your money? I don't feel like giving you any today - come back next week". PayPal is a shortcut for people who won't or can't open a regular business bank account and set up a merchant account to take credit card payments.


Life before PayPal was you got sent a check or money order to get paid for your online stuff. The only way to get paid by a credit card was to have a business bank account, open a merchant account, and get a shopping cart. Way too expensive an option for a small home business to afford and make any profit. Sure it took longer, but you knew the money was yours and you didn't have to worry about it disappearing or being frozen. You didn't send the merchandise until the check cleared so there wasn't any of the "I will buy it then dispute it and get it for free".


Until the IRS required PayPal to report people who had produced income through them, it was the heyday for making money on the side. It was, "Yeah, pay me through PayPal and i won't have to claim it as income". Those days are over though. Yes, it is convenient to use PayPal; but, you get no benefits of using an actual bank where you can control where the money goes and unless there is a legally obtained warrant or something - a bank has no reason to be in your business or freeze you accounts.


Everyone uses them because they are cheap and easy. Just have an email address, put a link on your site, and you are in business. Opposed to going through the paperwork, verification, and all the rest you have to go through to open a business account, get a merchant account, and a shopping cart set up. There is also a level of accountability and legitimacy when you go the latter route you don't have with PayPal. Anyone with an email address can send or receive money. I am not implying anyone using PayPal is not legitimate ....but nobody has multiple PayPal accounts do they...oh, sorry...I know a few people who do. Not that they use them for "bad" things...oh, sorry...I know a few who do do that too.


Yes, I do have a PayPal account. I have it linked to nothing and use a prepaid card to load it when there isn't enough from other things coming into it. I read the TOS on their "remedies" and I don't want to link any credit card or a real bank account to them from reading this information. I only got it because there was something I really wanted and I couldn't even use a credit card to purchase it unless I had a PayPal account - which is why I thought they used PayPal in the first place to process credit card payments, go figure.

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#6 rpsmith



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Posted 30 January 2017 - 05:13 AM

I'd like to address this in two ways: First, everything seems to be geared towards Paypal. They are relatively easy to set up and use with fairly low cost fees. They make it easy for you to use their services and most people fall for it. They provide a number of needed services like fraud protection,etc. They have a monopoly on the payment processing industry. At one point in time, they refused to do business with anyone who had alternate payment processors.


Second, There are alternatives. The main drawback to the alternatives is that they require more paperwork and there are more details to deal with. I think this is the main reason people use Paypal. Though it has been awhile since I looked into this, I don't remember if the other payment processors had direct deposits to your accounts or not. I do remember that most only paid by monthly check.

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#7 wittyguyftl


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Posted 03 March 2017 - 06:51 PM

I think down the road, when paypal has lost alll those fees they will be out searching for business that no one will be willing to give back.


Foll me once, that's me, don't try to fool me twice

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#8 AdsTrek


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Posted 04 March 2017 - 01:05 PM

I'm moving away from Paypal every chance I get.  It cannot be trusted to be there when you need them.  Why trust a virtually unregulated or insured entity with large sums of your money, especially when they have frozen so many accounts in the past?

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#9 ajay_dce



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Posted 04 March 2017 - 10:58 PM

problem is that paypal  has lots of regulations and payza also has not so much user friendly terms ,including hefty fee charges. Sad

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#10 topviralbiz


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Posted 05 March 2017 - 05:05 PM

I used to think paypal was a reputable company....now I'm not so sure

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#11 simplygenius


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Posted 09 September 2017 - 09:49 PM

Paypal is fine when you are nickel and diming and completing transactions of unnoticeable value which is waay o.k it's no biggie. Now suddenly if you begin to haul in larger than average transactions then the heavy audit of your business activities online begins.


Paypal will assume you are guilty of money laundering or are earning funds than should have been taxed at source but you have found some tricky way to avoid being taxed then you are in for a warm time once your account balances begin to reflect a significant uptick in deposits.

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