Replace PayPal with the name of any bank offering merchant accounts, or any MSP (they're all underwritten by a bank at the end), and the post would've read exactly the same. Every merchant account agreement reads the same -- if anything causes them to consider your account a higher risk than when it was first approved, they can open a reserve account and hold your money. If they suspend your account they will hold your money for exactly 6 months. It's the same everywhere.
These aren't things to consider when using PayPal, they're things to consider when you start accepting credit cards through anyone. You must plan for the possibility of having your account suspended at any time and for having whatever money hasn't yet been paid to you held for 6 months. Know who you're going to turn to if it happens and, if you've got the development time, integrate it with your site and be ready to turn it on when needed.
Here's a business idea for HN: build a payment platform that's processor/gateway agnostic. It'll need to have an API for directly taking credit cards, then pass that on to whatever payment processor you've plugged into it to make the charge. It'll also need an API to generate payment buttons for 3rd party processors like PayPal and Google Checkout. If one of them closes your account, you just plug in the login credentials of another and your website keeps running without changing any code. The recurring-payments-as-a-platform providers are half way there, but there's plenty of space for a different abstraction that doesn't focus on recurring payments.
I've already done so many payment integrations I probably have most of the code to create such a service, but the security and legal stuff you'd need to handle are significant enough that it really needs to be a full-fledged startup, not a side project.
Dan, Completely agree. Accept I hear paypal doing this more often then others and they did it to me.
Thats why I was suggesting Powerpay so hard in this piece. You’d be hard pressed to find them doing anything like that.
The main point of this piece was to expose people to what could happen and give them an idea on how to hedge their risk by using paypal and a merchant provider.
> but the security and legal stuff you'd need to handle are significant enough that it really needs to be a full-fledged startup
iirc, PayPal has money transfer registrations in each of the 50 US states, and in many foreign countries. That alone must keep a team of legal types busy.
Do not keep more than a couple hundred dollars in a PayPal account.
And you should seriously consider closing the original checking account the PayPal account is tied to - they can and will withdraw from it at any time.
I know right. When i re-read it, it felt like an infomercial for them.. Was gonna edit it, but whatever - they are a great company - the only merchant account i would recommend.
Huge thanks to the hacker news community. I posted this earlier today as I normally do with my posts hoping to get 20-30 hits and ended up shocked when it climbed up to number 10 on the main page. Over 1,000 hits today from hacker news - muchas gracias.
its horrible i know, only appears once per IP - i use it cause it converts well. Probably not from this audience but Twitter is my main source of traffic and it converts around 10% from that traffic
[+] [-] dangrossman|15 years ago|reply
These aren't things to consider when using PayPal, they're things to consider when you start accepting credit cards through anyone. You must plan for the possibility of having your account suspended at any time and for having whatever money hasn't yet been paid to you held for 6 months. Know who you're going to turn to if it happens and, if you've got the development time, integrate it with your site and be ready to turn it on when needed.
Here's a business idea for HN: build a payment platform that's processor/gateway agnostic. It'll need to have an API for directly taking credit cards, then pass that on to whatever payment processor you've plugged into it to make the charge. It'll also need an API to generate payment buttons for 3rd party processors like PayPal and Google Checkout. If one of them closes your account, you just plug in the login credentials of another and your website keeps running without changing any code. The recurring-payments-as-a-platform providers are half way there, but there's plenty of space for a different abstraction that doesn't focus on recurring payments.
I've already done so many payment integrations I probably have most of the code to create such a service, but the security and legal stuff you'd need to handle are significant enough that it really needs to be a full-fledged startup, not a side project.
[+] [-] seanmalarkey|15 years ago|reply
Thats why I was suggesting Powerpay so hard in this piece. You’d be hard pressed to find them doing anything like that.
The main point of this piece was to expose people to what could happen and give them an idea on how to hedge their risk by using paypal and a merchant provider.
[+] [-] cosmicray|15 years ago|reply
iirc, PayPal has money transfer registrations in each of the 50 US states, and in many foreign countries. That alone must keep a team of legal types busy.
[+] [-] ck2|15 years ago|reply
And you should seriously consider closing the original checking account the PayPal account is tied to - they can and will withdraw from it at any time.
[+] [-] seanmalarkey|15 years ago|reply
I need to look into that more. Maybe open a 2nd checking account somewhere else and tie that in.
[+] [-] slater|15 years ago|reply
[+] [-] seanmalarkey|15 years ago|reply
[+] [-] seanmalarkey|15 years ago|reply
[+] [-] IgorPartola|15 years ago|reply
[+] [-] seanmalarkey|15 years ago|reply
[+] [-] cancelbubble|15 years ago|reply