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Never Use PayPal (horror story PSA to save newbies grief) (9)

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Hello all-

So I wanted to share this story as a 'public service announcement' to save newbies the grief I recently went through

Here's what happened:


We use a large US commercial bank for all our business stuff... but we recently started working with an overseas, non-Anglosphere affilliate network that doesn't pay in USD, and found out the transaction/currency costs with our bank would be quite large (9%). So... we tried to use TransferWise (2%) to save money, but had trouble getting set up with them due to a couple idiosyncrasies with how our LLC is setup, so... we thought we would be smart and use PayPal (5%) to still save a little bit on transaction costs.

BIG MISTAKE.

As soon as the first affiliate payment came through PayPal froze our account due to "suspicious activity/high transaction value". I called in and spent 2 hours on the phone with them... trying to get the hold taken off the account, before I and the PayPal guy mutually decided it would be extremely difficult to do so given their requirements and instead refunded the money to the affiliate network, planning on just using our regular bank from then on out and just paying the high fees.

It took a week or so for the money to get back to the affiliate network, but that wasn't the end of the story. Their finance team accidentally sent the next payment (even larger in size) through PayPal again - it was a simple mistake and more our fault than theirs (we had only emailed them about the change but not updated the payment option on the dashboard) - but this is where the real nightmare began.

I called PayPal again trying to have the money refunded just like the first time. But this time every supervisor I spoke to (in a 3 hour plus call) refused to waive the 1500$ in transaction costs. Not only this - they said that because the account balance was so low other than the incoming transfer, that I would have to transfer 1500$ INTO the account to cover the transaction costs before I could even refund the money to the affiliate network.

The final supervisor I spoke to persuaded me that it would be easier to get the hold taken off the account rather than refunding the money. He spent an hour on the phone with me while I uploaded a dozen or so documents that they were requiring. He said within two days I would hear back on the hold being taken off.

Four days later I hadn't heard anything so I called in... after another couple hours on hold and being dropped and talking to folks, I was told that PayPal had gotten all our supporting documents, but considered our business too risky and was banning us from all further use, and putting our funds (including the very large payment) on hold for 180 days, at which time we could "apply to access it".

This was obviously a troubling thought - not the end of the world but definitely problematic - so I went through two more gigantic calls with supervisors - explaining the entire sequence of events in minute detail (plus several more hours waiting on hold/waiting for callbacks) - before I finally found one who was more rational and understanding, who agreed to just cancel the transaction entirely including the transaction fees (thank goodness).


Conclusion

I should never have been stupid enough to try to use PayPal for affilliate payments. As soon as this happened I suddenly remembered various interviews and discussions I've heard where people talk about what a nightmare PayPal is for internet marketing, but somehow I forget that beforehand and just assumed that since the payments would be coming from a big affiliate network that everything would be fine. I was lucky to get the money back at all though, and will NEVER be using PayPal again.

So yeah, I 100% brought the mess on myself by making a poor decision that I should have known better about.

With that said I'm glad it happened as every obstacle helps us build more resiliency and it was a valuable lesson to learn, HOWEVER I wanted to post it here so that it can hopefully keep at least one newbie from making the same mistake in the future

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I have heard many nightmare stories from folks in all walks of life getting their Paypal account frozen for no reason at all. Many never get it unfrozen and never get their fund back at all.

It is scary. I do not want this to happen to me either.

Nor do I like the idea of getting screwed out of a % every time I get paid into my PayPal account.

But at this point, I've been too busy/lazy to really look into getting paid by various networks, so just used the Paypal option. Luckily, I'm not a huge baller, so payment has never been big enough to raise red flags, but that could change soon.

So. What is the best option?

Looking at my main big network, Clickdealer, the options are:

Wire/ACH (could use this, I believe it's a $30-60 charge per transfer?)
Paypal (using this, get charged about 5% when getting paid)
Payoneer
Paxum
Epayment Systems LTD
and
Other

Last time I looked into Payoneer, Paxum, Epayments etc. They wanted a lot of paperwork and seemed a headache to setup.

I will say monetizer was super easy to setup ACH to bank account and I never even considered Paypal because they made it so painless.

Sorry to highjack your thread Seems like a good time to bring payments up!

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I keep saying that PayPal and Stripe are the 10000000% worst ways to get paid. They can be shut off at any second for any reason. I have wired millions of dollars all over the world it gets anywhere within 24 hours. DEMAND a wire transfer. They cost $30 bucks normally.

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No that's all great info!

We use Bank of America normally and if we get paid in USD from within the US there's no fees at all, and if USD from outside the US only a small fee.

Only reason this one was higher is the currency conversion.

It sounds like TransferWise is supposed to be the cheapest option if there's currency conversion involved, but this PayPal thing was such a nightmare that I am thinking I will just pay the high currency conversion costs to stick with BoA for awhile.

Then maybe down the road try out another option to save costs - but do so very slowly, carefully, and deliberately!

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I have heard that the best business bank accounts for affiliate and ecom stuff is Chase, and nothing else comes close.

I use Wells Fargo and it's incredibly basic. I get screwed on international deposits every month. Wire Xfer is $15-30 as said above (some are nice and split the fee). The currency conversion isn't too bad (from EUR-USD) and I lose about 1.5% But I can see that could become a huge unwanted chunk if it were a larger amount.

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I had a similar horror story with PayPal where they held $51,500 for 11 years! I was just considering using them as an alternate method of payment on a new site we launched but after reading this I guess nothing has changed with them.

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11 years??? WTF? How can they even do something like that?

On a side note, I always prefer to work with wires too, I have and account in both USD and EUR, so in most cases I don't have to carry any conversion costs.

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Wires are of course, much better.

However, sometimes, there is no choice ... if the alternative is someone not willing to do a wire and thus losing a sale, you will often just have to bite the bullet.

In such cases, it is always important to have multiple backup options and not put all your eggs in one basket.

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I have experienced same pain back in 2017, worst customer support ever, i decided to not use such service anymore there are number of alternates in market all we need to explore.

Omar Jr.

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