Give up Paypal!

If you have an online store, you’d be well advised to abandon Paypal and choose another payment system. I’ll explain why.

The advantages of Paypal

Paypal offers several advantages for merchants:

• The platform operates in many countries
• It’s in widespread use, providing access to a wide range of customers
• The interface is fairly simple, and transfers to our account can be made immediately for a small fee.
• Safety is considered good
• Sales and earnings reports, which were hard to find at first, have become much easier to access.
• Paypal offers a system for settling customer disputes

The disadvantages of Paypal

Paypal’s disadvantages are prohibitive for merchants, and I’d go so far as to say that they encourage fraud by certain consumers, as we’ve experienced.

• High fees per transaction
• Exchange rates for transfers are very much in Paypal’s favor and penalize us.
• Prompt payment means paying again
• The platform defends the customer against the merchant to such an extent that it can encourage fraud on the part of the ill-intentioned.
• Customer service claims to defend the merchant, but it’s an outright lie.
• As soon as there’s a dispute, Paypal freezes your funds and adds charges. In short, if you’ve emptied your account, you end up in negative and receive reminder messages saying that you owe them money.

What Paypal does in the event of a dispute

Experiencing disputes with Paypal is particularly frustrating for an online merchant, here are the steps:

• Receipt of a message explaining that the customer refuses to pay and that there is a dispute. The customer has a choice of reasons for not paying, the simplest and easiest being that the product does not conform to the description.
• Immediate debit of disputed amounts to our account, plus administration fees
• Paypal then offers to contest the non-payment and asks us to prepare a file, providing the customer’s name, invoice number, date, amount, proof that the goods are in conformity, and any exchanges with customers.
• After sending the file, which takes some time and energy, Paypal tells us that we’ll hear from them within ten days.
• When we don’t hear from them, we have to call customer service using a rather complex system of sending a request number.
• The agent then tells you that your file is perfect, that they’re going to defend us, that it’s costing them a lot of money, that we can only win because the file is well filled out.
• However, each time we end up receiving notification that our appeal has been rejected and that we must reimburse Paypal if we haven’t already done so.
• You then have to call the Paypal agent back, who explains that the reason is that the customer has disputed the purchase with his bank and not with Paypal, and that there’s nothing they can do. Very frustrating.

Clearly, some customers have grounds for complaint, but in some cases they tell Paypal that the goods do not conform, even though they had sent messages to say that they were very satisfied with the purchase.

Let’s take the example of our online training sales store. One of them makes the purchase, follows the training on the LMS, declares that he has successfully completed the training, requests a certificate, then asks for the training to be reimbursed because his employer does not accept the certificate.

The fact is that Paypal puts money in its pockets, freezes the money as soon as there’s a dispute, then lets the customer win, even though it’s probably fraudulent since the customer keeps and uses the product without paying.

Alternative solutions

Paypal is the worst solution for a merchant. Here are some alternatives:

• Braintree: considered the best, but it’s a subsidiary of Paypal so I wouldn’t recommend it.
• Adyen is little-known but undoubtedly offers the best protection.
• Authorize.net works with Visa
• Verifone, formerly 2Checkout
• Stripe: not as good a protection as Adyen, the platform is widespread, efficient and easy to use.

In conclusion

We got rid of Paypal and replaced it with Stripe, and so far everything’s working fine.

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