Paypal battles bad perceptions, realities of merchant needs


Paypal, the ubiquitous payments player that has dominated the e-commerce scene since 2002, is running into a headwind. With a short, but albeit, dramatic rise in the way most merchants collect money from consumers, Paypal’s door opening in 1998 has signaled a revolution that is only rivaled by the dot-com boom itself. With new and disruptive entrants into the payments game like Stripe, the stakes are higher than ever.

PayPal’s punching-bag status is the backlash from disgruntled merchants, as they air their dirty laundry in cyberspace- in reaction to what one payment industry insider characterized as  “…PayPal’s hyper growth trajectory in a soon to be over-regulated industry..” As of late 2017, San Jose CA based PayPal operates in 202 markets and has 218 million active, registered accounts. PayPal allows customers to send, receive, and hold funds in 25 currencies worldwide sources say.

EDN financial industry sources report that the underlying issue resides with the two most powerful cards brands- Visa and MasterCard, and their brand protection strategies. Ultimately-the root of the issue is the need to weed out the riskiest merchants-so called “high risk” merchants-and limit their access to payment networks.

It seems that this has swept many “normal” web based merchants into a maelstrom of headaches-some imagined, some real.

The reactions are becoming more comedic, as a pure role-play selection from this Quora post shows, customer service has become an issue. The website has memorialized the theoretically isolated experiences with venom.  The cyber shouters don’t stop the posting, as Twitter merchants yell even louder:

“..Just a reminder. PayPal is a centralized garbage processor. Can and will shut you down without notice or cause and hold all of your funds for a half a year. No explanations. I will never use them again.” 

and; the next

“…up to their good old ‘thievery’ tricks again. Holding a simple bank transfer for 72hours for “security” reasons. How do they get away with this?”

and more drama:

“..PayPal again trying to wreck people’s lives!!! ONCE AGAIN!!

In PayPal’s defense, as one commenter noted, “..good news travels fast, and bad news travels faster.” He continued “…when you have that many customers, its bound to have a ton of complaints..”

The good news for PayPal is that with their recent acquisition of Xoom Technologies and their 2014 spinoff from EBay – they are well positioned to service most of the worldwide payment ecosystem and gain more market share in the face of stiff competition.