[LRUG] General PayPal Advice Was: Credit card processing in the UK

Ash Berlin ash_lrug at firemirror.com
Tue Aug 7 08:32:29 PDT 2012


On 7 Aug 2012, at 12:18, Louis Goff-Beardsley wrote:

> I’d strongly advise against paypal. I had serious issues caused by them limiting my merchant account without warning a few years back.
>  

Having spent the last two years building a startup with PayPal as the sole provider I have some general advice for anyone considering it:

1) Dear god their APIs.

Don't trust the docs to be definitive. Often the same call can behave subtly (or widly) different on their sandbox and live servers. Sometimes there are really useful features that just aren't documented

2) Don't empty your PayPal account immediately! 

I hear a lot of people advocating that once you've started selling and have money coming in you should immediately transfer this money to your bank account "just in case PayPal freeze your account". Think about what this looks like from PayPal's point of view: you're account has been doing nothing, possibly sitting largely idle for years, you suddenly get an influx of money and then immediately transfer it out again. If those payments are fraudulent PayPal are now on the hook: hello instant fraud flag!

3) Let them know if you expect any spikes.

If you are planning on launching something and expect a sudden increase in volume it never hurts to let them know that this is coming up

4) Chargebacks

Chargebacks are a fact of life selling stuff on the 'net.

If you are selling something digital (where nothing was physically delivered, and also no Per Unit Cost) then its easier to just accept liability for all chargebacks - most card companies will side with the customer anyway, and doing this makes PayPal much less worried about you and your business.


So was it worth it? Two years in and we've not had our account suspended and have put 7 figures worth of receipts through our PayPal account. Despite all the drawbacks they have the still have the best APIs and low(est?) fees and smallest setup time.


That said PayPal don't like certain classes of things (most notably conferences/events) as we all know :)

-ash
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