Why I No Longer Accept Payments via Paypal

This is really in its simplest form a PSA for clients and anyone else who may find the subject of interest.  It should be noted and I haven’t exactly been Paypal’s biggest customer – I only began accepting payment from clients through Paypal about six months ago (in order to accept credit cards as a form of payment) and prior to that I’d had perhaps 50 transactions through Paypal in the past 10 years.  The purpose of this isn’t to try to persuade them into action – I know they don’t care.

The reason I no longer accept payments via Paypal is the fact that their customer service is beneath the levels I expect to receive from a company that should inherently value the business of every customer.  In reality, bad customer service sort of comes with the territory of dealing with big companies – and they are notoriously apathetic toward the entire customer experience as a whole whenever there’s a problem.

In short, I took a payment from a client via Paypal back in the middle of December.  The client in question used their credit card to fund the account.  Three months later, the client inadvertently flagged the transaction with their credit card issuer as part of a series fraudulent activity during that same time period, subsequently causing a chargeback.  Having recently accepted a payment via Paypal from a different client, Paypal placed a hold on the funds in my account in the amount of the transaction back in December.

I called my client for an explanation, and after realizing their error, they immediately contacted their credit card issuer to report my transaction as legitimate.  They handled their end of things within days.

Five business days later, the hold on my funds was lifted, but instead of my Paypal balance returning to normal, not only were the funds NOT RETURNED, they hit me with a transaction fee of 2.9% + 30 cents.  Furthermore, they ALSO IMPOSED A $20 fee, leaving me with a negative balance in my Paypal account.

I’ve sent emails and spent an hour on the phone with their incompetent customer service reps, who after dealing with multiple individuals ended up basically telling me that I had to wait 75 days for the credit card issuer to re-release the funds.  They promised to remove the $20 fee, but that hasn’t happened either.

This biggest thing about this is that this is over a relatively small amount of money – under $1000.  I understand their policy with the credit card issuer and generally that’s fine.  It’s not really about the money – I want it back don’t get me wrong – but I am not optimistic that I will ever see it again.  So I am doing what a customer should do – I am taking my business elsewhere.  I know Paypal doesn’t care.  I know they wouldn’t care if I somehow convinced 100,000 of their customers to walk.  They’re a multi-billion dollar corporation with over 100 million customers worldwide.

So that’s not the point of this.  My point is that bad customer service and apathy toward the needs of their customers can’t be rewarded with more business.   I can’t punish them, but I can control whether I do business with them.  So I am in the process of finding a new payment portal for my business needs.  I already use Squareup and have had nothing but positive experiences with that so far.  But I need to set up a recurring payment portal.  Got any suggestions?

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