To many businesses starting out with e-commerce, Paypal can seem like an easy way to get set up with processing online payments. For millions of users Paypal seems to be doing just fine at delivering a satisfactory service. Yet, does that mean they are the ideal option? In my experience, they are not. In this brief article I will address the primary issues I have experienced with Paypal.

Paypal Customer Support Woes

To put it simply, and somewhat nicely, Paypal customer support has serious problems. 

If the issue you need to address through Paypal support doesn’t come under their list of routine support issues—let’s say it’s something a little obscure—Paypal support is simply not set up to handle such situations effectively. If you fill out the Email Us form on their support page, and carefully explaining your Paypal issue in detail, you will receive an automated boiler-plate response that may, or may not, have anything to do with the issue you raised. If their boilerplate auto-reply doesn’t solve your Paypal issue, you can reply with more details. At this point, the information you carefully wrote when initiating the support request is nowhere to be seen. What’s more, when I’ve asked Paypal support staff if they have a copy of what I originally wrote, they tell me they don’t. So, right off the bat, you’ll likely be faced with explaining your Paypal issue at least twice, or even 20 times (read on).

Let’s say you do rewrite the details of your Paypal issue, someone may eventually respond. But, if they don’t understand your issue, it’s very likely they will send you another boilerplate (pre-written) response, that yet again does not address the issue. If you write back, the person who wrote to you (or copy/pasted a response to you) is will not be the one who receives your reply. A different support person will receive your reply, and if they also don’t understand the issue you are raising, and how to solve it, chances are you’ll receive another completely useless response. If you reply stating that their answer was useless, and ask they please address your specific questions, yet another person will receive your message. Essentially, in my direct experience, Paypal support has zero continuity in the handling of support enquiries. With any complex Paypal issue, it’s likely you’ll be explaining, and re-explaining, ad infinitum, the issue to a long list of clueless support staff.

You may think you could simply ask them to escalate the matter to someone who can deal with it. Good luck.

Paypal Support Nightmare

paypal-woesRecently, I spent around 12 to 15 hours (that’s nearly a day and a half of my time, at $120 / hour, we’re looking at $1440 to $1800 of potential lost income), over the course of a month, trying to resolve an issue Paypal’s web site was having with my account. Eventually, the only way I could get any movement on the issue was to file a complaint with the Better Business Bureau in the US. Before that, there was simply zero progress happening through Paypal’s support system. I had a list of approximately 20 people I dealt with on the matter. I had explained the issue in great detail, and nearly everyone I spoke to and had one-off emails with, were clueless. Paypal promptly responded to the BBB complaint, and a member of their Executive Office contacted me. He assured me they were going to resolve the issue in the coming weeks, and that he would follow up with me in 1 to 2 weeks. He was very apologetic about the situation, and seemed to genuinely want to get it sorted out. I never heard back from him, so about 6 weeks later I reopened the BBB complaint. Again, I promptly heard back from the Executive Office. Not from the same guy though. Even in their high level office, it would appear there is no continuity with their support. I was then informed Paypal development team would not be addressing the issue I (and I presume other merchants) were contending with for another 2 months. Having already been without proper access to my account for close to three months, they were expecting me to wait at least another two months before any solution might be on the horizon.

Paypal’s Outdated Technology

Paypal’s payment processing technology is outdated. It’s an old-school way of doing things. They bought out Braintree in order to provide a more modern approach, but anyone simply using Paypal (not Braintree) is stuck with a poor payment processing solution. With the Paypal Payments Standard your customer will be redirected to Paypal’s rather outdated looking payment processing page. That in itself can be a turn off for many customers. If the browser they are using has a Paypal cookie stored in it (e.g. if anyone has logged into a Paypal account on that browser) your customer will not be presented with an obvious way to provide their card details. Rather, they will be presented with a form to log into Paypal. If they don’t have a Paypal account, the only way they can enter their card details is by clicking a link near the bottom of the page.

You can avoid having all your payment processing rerouted to paypal.com by paying a US$40 a month fee for Paypal Payments Pro. But now you’ll be faced with having to have a fully PCI compliant hosting environment. With many low-cost shared hosting solutions, that’s not an option. So, on top of the US$40 a month fee, you may also be looking at having to pay for more costly hosting solutions.

IPN issues

In the world of payment processing, there’s something called the IPN. In simple terms, this allows the Paypal payment system to inform your e-commerce application with the result of the transaction. You need to set up the IPN URL within your Paypal account settings. Your e-commerce system will provide you with that URL. Sounds good. But what if you have more than one platform on which you wish to process payments through Paypal? For instance, I have a web store, but I also have an invoicing system, and a donations system on another site. That means I have three IPNs. Here’s the catch. Despite vast numbers of complaints about it, Paypal only provides the means to have one IPN set up on your account configuration. There are ways around that issue, but it gets complex fast.

Logo from screw-paypal.com

Account Lockouts

I’ve never experienced this issue myself, but if you look online you’ll find many Paypal Hate websites dedicated to the subject of account lockdowns. It’s a serious matter, and it would appear significant numbers of people fall victim to being locked out of their account. That means they are unable to access any funds stored on their Paypal account, and unable to process payments. According to the reports I have read, the support about dealing with these issues is reminiscent of the support issue I’ve highlighted above. What’s more, people report it taken months, to indefinitely, for them to regain access to their money and resuming payment processing.

Conclusion

Having worked as an e-commerce professional since the mid 1990’s, from my perspective any of the above issues are red flags.

I know many of my clients use Paypal because it seems convenient. Yet, why run the risk of it quickly becoming a royal pain in the arse (if, for instance, an obscure issues arises on your account) if it can be easily avoided?

What’s the better alternative? Personally, and professionally, I use and recommend Stripe. I get all the advantages of Paypal Payments Pro, with no monthly fee, and identical transaction fees. Yet, even though the customer never leaves my web site for their payment processing, I don’t have to worry about PCI compliance. A simply (and cheap) SSL certificate is sufficient. The processing all takes place on Stripe’s servers, through a token system. So the customer’s sensitive data never touches my server, and yet the customer stays right there on my web site during the entire payment process.

The acquisition of Braintree appears (to me) to be Paypal’s attempt at making the modern technology provided by Stripe. But, you may still be stuck with their crappy customer service, account lockdowns, IPN limitations, and more.

If you are a client of Inspired Earth, chances are you’ve paid an invoice or two, and all those payments go through Stripe.

If you want assistance with getting set up with SSL on your account, and with implementing Stripe as your payment processor, drop us a line. We’d be delighted to help, and delighted to navigate yet another business owner away from the potential issues of going with the apparent convenience of using Paypal.

Of course, if you really want to use Paypal as a payment processor (each to their own), Inspired Earth has years of experience with implementing it, and we’d happily assist.