13,370 things to consider when using Paypal | Hacker News Reader

13,370 things to consider when using Paypal

seanmalarkey.com

15 pointsseanmalarkey21 comments

If you use Paypal to collect money online - Read this!

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.

Serious? Withdraw at any time? I usually pull funds out as soon as they come in, but hadnt considered them withdrawing funds w/o permission.

I need to look into that more. Maybe open a 2nd checking account somewhere else and tie that in.

no, they cannot withdraw from a linked account without your permission from an initiated transfer. any funds you leave in your temporary paypal holding are theirs for the taking, of course.

If they decide to reverse a payment to your paypal account and you do not have enough funds, it will start to transfer from your bank account tied to the paypal account, without warning or consultation.

There are stories about this all over the web. You essentially agree to it in their TOS.

I think you should've mentioned Powerpay more.

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.

infomercial AND referrer code! ;)

lol exactly....

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.

What's with the pop-overs on this blog?

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

Could you set up the popover to not display if the referrer is HN?

Good idea, wish I knew the code to do that. thinking about disabling it all togther...

Removed it completely..

the pop-over turned me away

That, and the affiliate links.

I share the same love/hate relationship with PayPal but the referrer links made the entire article stink of blogspam to me (even though I understand that wasn't the intention, it still "felt" like it to me).

understood. thanks for the feedback

PayPal is not a bank, folks...

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