gummel
Regular Member
- Jul 7, 2019
- 253
- 512
Hey guys... 1st PayPal warning of 2020 & this is a serious warning...
Firstly... we like PayPal when it comes to ordering stuff on-line - they are great for that ...
Sadly there is a dark side to the organization if you use them for your merchant processing needs.
As a vendor the best I can describe their new User Agreement is: a contract with the devil who ultimately will collect... in their new contract they have given themselves unlimited rights over all your money & right now they appear to be shaving a little bit of the constitution...
We've spoken about PayPal in the past - they are a sharp operator so that's not news... if you use them, you need to be aware of the serious damage they could do to your business & the way redress the balance in your favor.
RISKS TO LOOK OUT FOR
1. PayPal are rolling out sharper new terms & adding more clauses to their 50,000 word AUP & expecting you to jump as & when they make changes.
2. They appear not to be asking or gaining permission from their users with respect to agreement changes in some countries...
3. They are granting themselves carte blanche to your money & they can do what they want to it, at any time & for any reason without justifying their reasoning or supplying a process for appeal.
4. If they feel you breached any of their terms rightly or wrongly they will simply ban you, no warnings, no notice or explanations & they usually grab all your funds.
5. It appears that they wait for a large inbound payment before locking your account - this of course is of maximum benefit to PP & maximum damage to you.
6. The 180 money hold they impose appears to be "flexible"....as not all vendors are able to retrieve funds after the 180 day period and if a payment comes in or out during this period that appears to reset the period back to 180 days... Many vendors have to constantly chase to get the money back if at all.
7. Vendors are now reporting that after the 180 day period Paypal seizes the whole balance as "damages" for breaking their TOS - this is a new & deeply disturbing trend
Essentially PayPal are acting as a merchant processor as well as a their own legal institution + disregarding any protective rights you have under law.
HOW TO REDUCE THE RISK
If you are trading with PayPal we advise the following:
1. Make sure you are compliant with what you can/can't sell - Read their AUP very carefully.
2. Make sure you have clear TOS, Privacy Policies, Cookie policies on your websites, avoid any earnings claims.
3. Avoid using Paypal for ANY large cash transfers or receipts - we are advising against any transfers/receipts of over 1000 dollars (the new AML Limit in Europe is 2500 euros) in fact we recommend that you don't transfer any amount that cumulatively adds up to over 2500 euros (approx 3300 dollars) to anyone - if you want to pay people regularly we advise you sign up & use services like Transferwise
4. We strongly advise users to withdraw balances daily only leaving just enough to cover refunds - it's not their money - it's yours and we have no evidence which suggests that leaving more money on account makes you a "better risk".
5. We advise checking that the PayPal services you are using don't have automated rights to withdraw funds from your account - if they do, ensure that the bulk of you cash does not sit in that account.
6 . We advise you change your refund policies, remove any voluntary policies & change these to "fault only" refund policies to reduce refund requests & disputes.
7. We strongly advise against transacting any annual re-bills as these appear increase unauthorized transaction chargebacks.
8. We advise against any processing anything that leads to any big spike in sales volumes / disputes - as this will likely trigger a "review" and a very likely a mandatory money hold.
9. We advise you reduce the volume you transact through PayPal to reduce your overall exposure.
10. We advise you trade as a proper LTD company or an LLP/LLC or equivalent rather than a sole trader.
11. We advise you don't pay your employees/suppliers/Va's by Paypal - use a bank /Transferwise
Firstly... we like PayPal when it comes to ordering stuff on-line - they are great for that ...
Sadly there is a dark side to the organization if you use them for your merchant processing needs.
As a vendor the best I can describe their new User Agreement is: a contract with the devil who ultimately will collect... in their new contract they have given themselves unlimited rights over all your money & right now they appear to be shaving a little bit of the constitution...
We've spoken about PayPal in the past - they are a sharp operator so that's not news... if you use them, you need to be aware of the serious damage they could do to your business & the way redress the balance in your favor.
RISKS TO LOOK OUT FOR
1. PayPal are rolling out sharper new terms & adding more clauses to their 50,000 word AUP & expecting you to jump as & when they make changes.
2. They appear not to be asking or gaining permission from their users with respect to agreement changes in some countries...
3. They are granting themselves carte blanche to your money & they can do what they want to it, at any time & for any reason without justifying their reasoning or supplying a process for appeal.
4. If they feel you breached any of their terms rightly or wrongly they will simply ban you, no warnings, no notice or explanations & they usually grab all your funds.
5. It appears that they wait for a large inbound payment before locking your account - this of course is of maximum benefit to PP & maximum damage to you.
6. The 180 money hold they impose appears to be "flexible"....as not all vendors are able to retrieve funds after the 180 day period and if a payment comes in or out during this period that appears to reset the period back to 180 days... Many vendors have to constantly chase to get the money back if at all.
7. Vendors are now reporting that after the 180 day period Paypal seizes the whole balance as "damages" for breaking their TOS - this is a new & deeply disturbing trend
Essentially PayPal are acting as a merchant processor as well as a their own legal institution + disregarding any protective rights you have under law.
HOW TO REDUCE THE RISK
If you are trading with PayPal we advise the following:
1. Make sure you are compliant with what you can/can't sell - Read their AUP very carefully.
2. Make sure you have clear TOS, Privacy Policies, Cookie policies on your websites, avoid any earnings claims.
3. Avoid using Paypal for ANY large cash transfers or receipts - we are advising against any transfers/receipts of over 1000 dollars (the new AML Limit in Europe is 2500 euros) in fact we recommend that you don't transfer any amount that cumulatively adds up to over 2500 euros (approx 3300 dollars) to anyone - if you want to pay people regularly we advise you sign up & use services like Transferwise
4. We strongly advise users to withdraw balances daily only leaving just enough to cover refunds - it's not their money - it's yours and we have no evidence which suggests that leaving more money on account makes you a "better risk".
5. We advise checking that the PayPal services you are using don't have automated rights to withdraw funds from your account - if they do, ensure that the bulk of you cash does not sit in that account.
6 . We advise you change your refund policies, remove any voluntary policies & change these to "fault only" refund policies to reduce refund requests & disputes.
7. We strongly advise against transacting any annual re-bills as these appear increase unauthorized transaction chargebacks.
8. We advise against any processing anything that leads to any big spike in sales volumes / disputes - as this will likely trigger a "review" and a very likely a mandatory money hold.
9. We advise you reduce the volume you transact through PayPal to reduce your overall exposure.
10. We advise you trade as a proper LTD company or an LLP/LLC or equivalent rather than a sole trader.
11. We advise you don't pay your employees/suppliers/Va's by Paypal - use a bank /Transferwise
