Paypal Shops grow

[Dameon]

Paypaldamon,

My problem is with your company's definition of "unauthorized" access. I don't agree with the practice of holding / withdrawing funds from my personal checking account if someone used a fraudulent credit card to pay me 3 months ago. That is your problem, not mine. You authorize the transaction, you take the information, and you take the payment. Don't blame me if your internal checks and credit card validation is allowing fraud through. There is no compensation for your holding procedure. Your company conducts itself as though they are the IRS with rights to sieze assets on their whim of "suspect" transactions. As you are not a bank, there is no monitoring and accountability. What's to say you aren't claiming "suspicious" transactions and freezing / confiscating funds just to get cash to make up for internal company cash flow problems??? I have seen way too many recent reports of this activity, and it has made me seriously consider closing my Paypal account permanently.
I would love to hear why your company asserts the right to take money from me because of their internal security, information, and validation system failure to detect fraudulent credit cards.

 

[MiniThug]

I also am worried about Paypal claiming fraudulent funds a couple of months down the road and reaching into my account to take money back. I considered closing my account as well and could not find the proper place on the website to do so. It really scares me because if something were to happen right now, I could not afford to loose that money.

Back to my original question, if you all dont believe I should use paypal to accept CC payments, what other methods could I try (for our online store) and do you have any links where I could find information?

 

[Damon]

Hi Dameon,

All credit cards go through a verification process called avs (or address verification). The information is processed through the vendor to make sure the address provided matches the one on file with the credit card company (as well as some other checks). However, I will give you a scenario---I find your wallet with all of your personal information---I could validate the credit card and ask for a different shipping address on purchases made (this is why the SPP requires that the item be sent to the address that has passed the avs screen).

We also have internal measures to detect fraud, but charge back/fraud reports come from the credit card companies and we have to process the charge back (and, again, these are guarantees to consumers by law). Users are protected if they follow the details of the Seller Protection Program and they also reduce the risk by doing so. Any form of credit card acceptance carries some risk and we are one of the few, if any, places that offers a program to protect against it.

We are a payment service moving the money for the users at their request. If you accept credit card payments---you are going to have some risk. Sellers can reduce this problem by following the SPP or they can even select the type of payments they accept.

Indicators-shipping to a different country (such as Russia or Indonesia---credit card fraud is high there).

 

[Damon]

Hi minithug,

I will keep reinforcing the details of the Seller Protection Program so you don't have to worry about losing money. The risk of accepting credit cards is there, but it is also not as great as is being painted here. There are several steps to protecting yourself from fraud and I have given the details several times. You can also set your receiving preferences on your account (for Premier/Business accounts) to accept payments from confirmed addresses only, verified members only,etc. Users can also pay with a bank account (and users have to be verified to make these payments from their bank account).

 

[mechBgon]

Paypaldamon, after reading the thread a few weeks ago in which a member was discussing the double charges showing up on his checking account, we learned this (hope I have this correct): when a person sends payment from a checking account, their primary credit card is charged until the checking funds clear. If their PayPal account's primary credit card is their Visa debit card for that checking account, their checking account is charged twice initially and refunded later.

I never did hear the outcome, but one thing is rather obvious: if the checking account doesn't have the funds to cover the transaction, charging it a second time via its debit card is not going to accomplish anything. If it does have the money, charging it twice may overdraw it, resulting in elevated levels of customer dissatisfaction. I hope PayPal has remedied this illogical loophole by now. I removed my debit card from my PayPal account completely, so as to avoid any possiblility of this happening.

 

[Damon]

Hi mechbgon,

The transaction was actually called an instant ach. This is a different payment option. Let me break down the scenario---

1. We have add funds and echeck---both take 3-5 business days to clear the incoming funds from the bank account to the PayPal account. This process is not fast enough for some users and they need access to the funds now.

2. Instant ach -starts an incoming ach (like above), but makes the money available immediately by securing the amount on the debit card/credit card on file. We are basically fronting the money to the user for money that has not cleared in and securing it against the card in the event of a failure/rejection from the issuing bank on the incoming funds. This allows the user to send the money that day instead of waiting 3-5 business days.

The hold is removed, depending on the policies of the issuing banks for the debit/credit card, within 7-30 business days and is not charged (provided that the incoming ach clears).

If there was no hold---the risk is that a user initiates an incoming transfer that is rejected by their bank and we have already given them money that has not cleared---we would then be out the money (explaining the hold---a charge is only placed if it fails).