The Sav incident is another example of how poorly PayPal treats its customers.
I rarely buy individual company stocks, preferring to invest in index and target date funds that don’t require constant attention. But during the market drawdown earlier this year, I picked up a handful of beaten-down stocks. One of those was PayPal (NASDAQ: PYPL).
I didn’t hold onto it long, though. The next time I logged into PayPal after buying shares, I asked myself, “Why again did you buy stock in this company?”
Let’s face it. PayPal has horrible customer service and treats its customers like a statistic. The only thing it has going for it is the network effect: everyone has a PayPal account.
Here’s an example: last year, PayPal decided to remove the account view that shows your latest transactions with the current balance after each transaction. This was helpful for reconciling your account with your accounting software.
Not only did PayPal remove the balance column, but for some reason, it still calls this view Activity (including balance & fees), even though it clearly doesn’t include the balance. This view is on the main dashboard when you log in. Having a big error on the dashboard for so long is worrying.
About a week after I bought PayPal shares, my podcast editor emailed me saying he was switching payment processing from PayPal to another company. I don’t blame him. PayPal is horrible for recurring payment businesses because accounts are difficult to transfer if you sell a business. I’ve also had problems when payments didn’t go through, and finding and managing active subscriptions can also be troublesome.
Want support? Good luck getting a timely response that answers your question. Compare this to Stripe, which I use for one of my businesses. I can start chatting with a Stripe representative within a few minutes, and they are always able to answer my question.
Most of the emails I get from PayPal these days offer me loans or tell me it’s increasing its fees. And don’t get me started on the many postal mailings I get each month pitching me on PayPal loans. It seems like desperation.
But the nail in the coffin is how PayPal treats merchants. If there’s a whiff of something sketchy going on with an account, the first thing the company does is turn the account off. Consider what happened to NameBio two years ago. (The situation with Epik was also concerning, although it’s not clear what exactly happened in that case, and Epik’s response didn’t help it.)
Last week came news that PayPal did the same thing to Sav. Here’s what Sav wrote about the issue:
Last night we received an email from PayPal stating that we can no longer do business with PayPal. The email didn’t state any more information except that there was a trademark or copyright violation regarding the sale of an item. We were never provided any additional information about the alleged violation. Additionally, we were never given any prior notice, nor any chance to explain any transaction before being banned.
Today, Sav announced that PayPal was restored. Sav.com wrote:
We learned this morning that our account was disabled last week due only to a domain name that had no association with Sav.
This sounds similar to what happened with NameBio.
PayPal has systems to catch potentially harmful behavior. This is good. But its first inclination when something gets flagged is to cut off the account completely. Sav.com had to scramble to identify the issue and get PayPal’s attention through a social media campaign. Its customers were at risk if their renewal payments didn’t go through.
A company that wants to work with its merchants would reach out first to resolve the issue.
Why does any merchant work with a payment service that cuts them off when something is flagged? Well, they feel like there’s little choice because of the network effect of PayPal.
If that’s all PayPal has going for it, that’s not a good long-term recipe for success.
As far as I am concerned Paypal is junk now. Really never use it, well maybe twice a year only and only with Ebay. Just an unnecessary middleman.
Well said.
I avoid this bloodsucker ,charge unnecessary fees
Stopped using them years ago .Not worth the sudden closure of account with no explanation.It would happen to someone else again and we would be back to discussing them.
Do you know the best way to get support from Paypal? It’s at Twitter… Good luck having any problem solved inside Paypal’s website very weak support system, at Twitter they did reply to me right away and trying to be helpful. Go figure!
PayPal has really gone downhill, steadily. It’s really sad, like what happened before with Escrow.com for so long. But this is much worse. And the Epik matter was extremely obnoxious.
PayPal may still be useful and desirable to use at times, and they used to be great, but they are just another “establishment tool.” I hope there are good substitutes emerging, though I haven’t seen that yet. I do miss the convenience of “set it and forget” with PayPal, which is still no longer a feature at Epik despite being able to use them again in a much more time-consuming and disincentivizing manner. I guess since Epik was so burned by them they don’t want to restore that?
I think Epik burned its bridge with PayPal with its response, rather than trying to work with them to get it restored
I don’t know enough details about what exactly PayPal was so concerned about now, something about Masterbucks as I recall (?), but you’ve been able to resume using PayPal at Epik for a while now. The only difference is that you no longer have the feature in Epik for using PayPal via quick access as one of the immediately selectable payment options, or for auto-recurring payments, as you did prior to whatever PayPal’s beef was. My understanding, unless I’m mistaken, is that since PayPal is now allowing Epik customers to pay via their service again, it would just be a matter of Epik restoring that functionality if they want to, i.e. I guess if Rob wants to, since the bridge was apparently “unburned” a while ago. I do miss having that layer above having to choose a specific credit or debit card, despite being so unhappy with some of what PayPal has been doing for so long now. And if there was a just as (previously) convenient and good non-PayPal equivalent for US customers all the better, I would just use that.
I have been dissatisfied with PayPal’s high fee and another reason. Its showing insolence in some cases is also worrying. It would gladden me if there is a convenient, friendly, and unbiased alternative.
Well said! Paypal is an example of the dangers of monopolies. It’s a pity, because all financial transactions could be made with crypto.
Don’t worry about the haters it’s none of there business why you sold, you do you and your doing a great job Andrew.
Doesn’t PPal own all or a big chunk of Stripe?
No. Although some of PayPal’s co-founders invested in Stripe.
Left PayPal years ago after sudden account closure with no reason given. They just told me over the phone that I’m no welcome back using PayPal no more and that was that. I still don’t know what exactly triggered the red flag against my PayPal account but my life didn’t change much since so they can stick them AI filters up to them ***** All my friends and family left PayPal shortly after the incident because nobody needs surprise account halt ( what can happen literally anytime with no reason given)
Paypal’s requirements are getting stricter, but it is often necessary to use it. 🙁