Get Your Hands Out of My Pocket, PayPal!!!

Today we have lowered our opinion of an eBay subsidiary named PayPal which acts as a payment processor, bank, electronic funds transfer, debit card, and overall financial services unit for online auctions and e-commerce ventures.

We recently received a notice that a recent payment (a partial payment at that) accepted via PayPal was being investigated and potentially reversed due to possible fraudulent activity. It was eventually reversed indeed.

So we are limiting any payments received with PayPal to less than $100 and immediately refunding any that exceed $100.

We have also removed 2 of 3 bank accounts that were associated with our PayPal account.

The third one will be removed soon.

The issue is that PayPal no longer offers sellers the security that once a payment is received, it is fully received.

PayPal may be great for buyers, but no payment sent is guaranteed.

Even if you ship an item with all types of confirmation information, there are loopholes that PayPal can still return the money to a buyer's account, and deduct funds from your PayPal account.

There is too much recourse for buyers (then PayPal and eBay consequently) and virtually none for sellers.

We will therefore accept checks, money orders, and a service called CheckFree which transfers money from bank account to bank account.

PayPal will be only used to buy and not sell through if we keep our account at all. Two recent payments that we made were reversed for some unknown reason and you cannot even consider your own payments and purchases complete.

I know that their stock price is going to take a serious hit in the future from the eventual loss of revenue as more sellers switch to alternative payment processing methods due to their policy changes and methods of operating.

I do not know if or when the policies were changed, but the window of opportunity for sellers' protection is now too restrictive.

The worst part of it all is that we were going to receive more funds through PayPal than at any other time in our history of being a PayPal customer.

I now believe that our sharp, sudden growth had reached the limit of effectively using PayPal.

But as large corporations go, they can only perform multiple tasks well for a limited period of time. The juggled balls eventually have to fall and hopefully customers will not be hurt:(