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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

Wow

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 Guest_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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#12 weblord

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Posted 25 June 2019 - 06:25 PM

i don't like the idea, it's a nightmare, banks  will start closing personal and business accounts.


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#13 Glen Palo

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Posted 03 July 2019 - 06:46 AM

PayPal is not a bank. It is a money transfer agent. In my state (Virginia), PayPal is a money transfer licensee. As such I could file a complaint with the state licensing agent. I think if the state regulators received enough complaints, PayPal may be encouraged to change its business practices. (But probably not in my lifetime.)

 

PayPal froze my account last year. Fortunately, I transferred most of my PayPal cash balance to my PayPal credit card.


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#14 weblord

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Posted 03 July 2019 - 08:08 PM

i think it's the principle of paypal on how they operate business, it's the way i don't like.

they lied to their customer and yet they closed accounts left and right without a sane reason.


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#15 Yemar20

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Posted 23 March 2020 - 06:42 AM

This is an eye opener. I never knew PayPal could be so bad. I use it because I think it's safer as the payee is not given the details of my account. With the new knowledge acquired through this thread, I need to have a rethink.
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#16 Raevon

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Posted 21 November 2021 - 01:29 AM

Hi, I use PayPal but the only reason is that I can then have an avenue to get a refund if the merchant doesn't honour the purchase agreement.  I have had two or three occasions where I ordered an item and something totally different arrived, I contacted PayPal and the merchant had to reimburse payment and on one occasion I received the product I initially ordered and did not have to return the incorrect item I had received.  I think that is the safeguard at least for someone who isn't getting large sums.  I do however, agree that having to wait 6months to get your money is ridiculous, it was bad enough that I had to wait a month I think, when I sold a $20 item on eBay!

 

Cheers.


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#17 Maryanne Myers -Webstars2K

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Posted 22 November 2021 - 08:12 PM

Hi, I use PayPal but the only reason is that I can then have an avenue to get a refund if the merchant doesn't honour the purchase agreement.  I have had two or three occasions where I ordered an item and something totally different arrived, I contacted PayPal and the merchant had to reimburse payment and on one occasion I received the product I initially ordered and did not have to return the incorrect item I had received.  I think that is the safeguard at least for someone who isn't getting large sums.  I do however, agree that having to wait 6months to get your money is ridiculous, it was bad enough that I had to wait a month I think, when I sold a $20 item on eBay!

 

Cheers.

You dont need Ppal for that. Period.

They are a middle man between you and visa/mastercard/etc . You contact your credit card or bank for that. SInce 2019 paypal has been "fining" people 2500 a pop - some into the many 10's of thousands. With zero explaination on what the fines are done for. You dont even get a receipt or told beforehand. It says "Damages to paypal" they send the money to themselves and that is that. It always says the same thing.

Now they are getting even more aggressive this year, I closed my business account because its so spooky.

Look it up in google, twitter. If you are associated with a bad account user, you get told you are a "support of" and fined.

This company has transacted 100's of millions (if not billions) for schemes. They have been fined by the USA for violating sanctions. They have been fined by India for being involved in money laundering. And, they want 2.5 million out of the victims fund that they helped, on purpose, process those payments for!

 

They constantly fine people, get sued, fined, and now fine their users which is new to me, with the same reason of "damages" but no damages.

Good luck, I freaking hate them because they arent as they portray. You are no safer with the middleman there, than any other one. Too many other trusted sources to use besides them nowadays.


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#18 mrgbiz

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Posted 30 November 2021 - 09:22 PM

I have used paypal for years for transactions with different vendors. Just recently I promoted a program and was paid the commission.of $50. Yahoo this was my first sale on the internet. Sad to say, I have yet to see this money, they claim

 

suspicious activity. Can you believe that. My account is frozen at this time. I told them that if they needed the money that bad, to do some good and donate it to the Saint Judes Hospital  and  I will not jump through hoops and do cartwheels for

 

some of the verifications they decided to come up with., these people are absolute knuckleheads.


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#19 Woraee

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Posted 22 February 2022 - 01:43 PM

Hi my name is Rachael,I am new to Marketing.I find this story is absolutely unbelievable,thank you for the heads up! This is a tough business to get started in as it is,but then have someone like Paypal to sabotage you,is just wrong on so many levels! I would think there would be some kind of law they are breaking? Thanks again for sharing!


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