PayPal Pains & the Payment Processing Puzzle

NOTE: This article is a bit lengthy. If you don’t want to read the whole story, you can scroll down to the lessons and strategies area below the story. If you want to see what my adventure-tour through the bowels of PayPal bureaucracy was like, read the gory details. Though I used some colorful descriptives to make the retelling bearable, everything here is factually true and well-documented (I have recorded calls, screen-shots, and e-mails).

Stories with happy endings often have gruesome beginnings or middles – and this one is like that. My purpose is not to condemn, but to report and inform in a way that’s ultimately useful. If I manage to entertain along the way, good. And, if anyone at PayPal is offended (I’m talking to you and your minions, Daniel Schulman) then maybe that will motivate you to fix the policies and leadership practices you used to write the literal scripts your people used to cause this.

In the beginning …

inthebeginningPayPal was a disruptive business model that empowered the small entrepreneur like nothing else. In my opinion, they were one of the best things to happen since the industrial revolution. The ability to market and to get paid efficiently and securely from a world-wide audience of potential customers was great. This is part of an entrepreneurial revolution that helps countless people shrug-off the chains of corporate life in favor of a more healthy, creative, and fulfilling existence. I think PayPal, in its best form, can facilitate the building of the next iteration of the American economy. That’s what a fan I was (and may become again). For FOURTEEN YEARS, I consistently promoted PayPal to other entrepreneurs. I never had even a single charge-back to my record.

My PayPal Pain

paypalpainThis is a story of more than four months of nonsense demands, jerk-around, and harassment by PayPal – often by employees who seemed to genuinely enjoy that they were causing me a problem and wasting my time. During this time, PayPal employees followed the apparent PayPal policy of giving no credence or consideration at all to longevity or “business relationship”.

It all started with an e-mail that read in part: “… we have found that you are operating or intend to operate as a retailer or dealer in jewels, precious metals, or precious stones.”

“We have found …”

As if I was hiding the fact. As if I hadn’t told them the nature of the business to begin with. As if the web site name GemstoneArtist.com wasn’t a clue. As if being a jeweler was somehow shady.

The email proceeded with a demand for information – for me to prove I wasn’t engaged in money laundering. As time went on, further conversations with PayPal representatives not only failed to inject sanity and reasonableness, they inspired PayPal employees to demand more and more information – of a more and more ridiculous nature. Here’s a partial list of demands PayPal representatives made as a condition of keeping my account open:

  • Confidential documents prepared for me by my attorney.
  • accountnumberCopy of an invoice from a supplier. Those contain account number s which would allow them to make fraudulent orders on my account. But, they promised to handle my information “according to THEIR policy”. After the obvious sensibleness of their policies – and the efficiency of their wonderful employees – who demonstrated their integrity by lying to me already, they still couldn’t understand my reluctance.
  • Licenses that don’t apply to the jewelry industry, including “broker-dealer, remittance, or escrow licenses”. PayPal representatives could not cope with the simple fact that these licenses are not required of jewelers in any state in the United States. I was told to produce the required documentation or my account would be closed.licensedemand2
  • “Proof of business” – but no PayPal representative could explain what would actually do that. I was told that large and detailed web sites, video evidence, photographic evidence, scholarly articles, copies of trade publications by you or mentioning you – even television appearances are insufficient to prove you are in business. Only a license that doesn’t apply to your industry or to you in your geography are sufficient as “proof of business”.
  • “More information” – but no PayPal representative could explain what that meant – what specifically, would satisfy them. Again, no web site, video, articles, etc could slake their greed for “more” information. It’s as though the pathological greed of the payment industry for money had become generalized to greed for anything they could imagine.nonspecific1
  • “Your supplier” – but no PayPal representative could then cope with the fact that I own a mine or produce my own goods. These conversations were bizarrely like those interviews you see with people who think steak originates at a warehouse or store. No amount of photographic or video evidence could convince these poor isolated ignorant cubicle drones that someone actually digs things out of the ground – or actually lives by making something rather than leaching off the creations of others.
  • A business license issued by a government agency that doesn’t have purview over my physical location. The idea that someone lives outside of an incorporated city is utterly alien to at least several of the PayPal representatives I spoke with. Likewise the idea that anyone can conduct any business of any kind without multiple forms of government license.
  • The “type of payments you will send and receive”. PayPal owns 14 years worth of transaction records for this site. They refused to accept their own records as useful, but couldn’t explain or define what more they wanted.
  • The location of suppliers (inside USA or not) – AFTER having been provided full contact details including addresses. Apparently, these PayPal staffers do not recognize the names of U.S. States.

Senseless, Self-defeating Restrictions

… were combined in a bizarre, schizophrenic way with truly and deeply arrogant “reassurances”:

documentdemandscreenItem #2 is rich – given that they don’t even adhere to this rule internally. You can name your PayPal account anything you want. And, if you request to withdraw funds by check, the check will be automatically cut in whatever name that is. But, the concern is that the small-time jeweler could be “facilitating money laundering” – right?

Item #3 is great. Documents they specifically demanded included corporate documents – and a copy of IRS assignment of a Tax ID number – BOTH of which were years old. Did they want me to file a new corporation and get a new Tax ID – just to get them fresh documents? What if they come back YEARS from now – to repeat this ridiculous nonsense? When I pointed this out, most of the cubicle rats I talked to could not answer – and could not cope with the self-defeating stupidity of the flow-chart they were trapped in.

paypalfinancialcrimesItem #4 really demonstrates the hubris of PayPal. Asinine demands – for sometimes utterly confidential information – based on self-contradictory demands – we are assured will be handled according to PayPal’s obviously insane policy flowcharts – as navigated by PayPal’s blatantly uncaring and  incompetent employees. This makes me feel so secure – just like the Federal Government fining them for criminal activity using customers’ information.

Hurry it UP!

PayPal demanded that I provide all this stuff within 5 calendar days, or suffer some non-specific “restriction” of my account (interference with my business). To help me keep from forgetting that they were going to interrupt my access to my own money, they put a convenient count-down timer on the screen:intimidationcountdownYou know, just AFTER the obnoxious spam-you-every-damned-time-you-log-in screen we all hate:

allspamallthetimeAs the timer ran out, the messages and the PayPal representatives I talked to on the phone told me I could no longer close my account. So powerful is PayPal that they can deny me to cease doing business with them – or so their representatives told me. Repeatedly.

After the 5-day national-security-level-urgency to acquire documentation from me, threat-screen flashing every time I logged on, PayPal representatives took more than FOUR MONTHS to bother to look at the documents I sent them.

When I confronted a PayPal representative about the delay during that time, I was told that my account “wasn’t high priority” and that they would “get around to it”. I wonder if other entrepreneurs who create products and do marketing and complete sales are happy to know the PayPal cubicle mopes they are supporting won’t strain themselves “getting around to” the demands they’ve put on the people producing stuff and jumping through their stupid hoops?

In various phone calls, representatives of PayPal told me all sorts of interesting tales, half-truths, and outright lies. They demonstrated a variety of obvious biases, ignorance – and often a truly epic level of arrogance.

In an officious tone, one representative told me they were following Federal regulations. Then, I asked them specifically which regulations required me to have a license that could not be issued to anyone in my industry anywhere in the United States. Suddenly, the bullying tone was gone – and “they aren’t a lawyer”. They were “just following regulations” – that they had never actually seen, and couldn’t cite. There were shades of the Milgram experiments in many of my conversations with these utterly uncaring and unthinking people.

The Star Chamber

Nearly every PayPal representative I spoke with told me the obvious lie that “there is no telephone in the compliance office.” At long last, one was pushed to admit to the hypothetical car wreck involving a staffer’s spouse – a phone call could actually be put through to them.

ppbullyI was told that the only customer communication with that department was via e-mail. All of my e-mails to that department were replied to by what appeared to be an automated system sending form letters reiterating the repetitive asinine demands for documents they already had – or that didn’t apply to my industry. Their e-mails are all from a no-reply-possible addresses. In another display of arrogant, greedy corporate bullying of customers, they set up a system so they could send demands to me, but I could send no explanation – or even pleas for sanity in reply.

ratmazeALL of the PayPal representatives I spoke with – except the guy who resolved my issue – were like cubicle-rats lost in a flow-chart maze of policy wonk riddled with senseless (or sadistic) dead-ends. Once a PayPal cubicle rat finds themselves in one of these, forget about your money or your account – they can’t even get themselves free. They treat the customer as the cause of their predicament, and all they want is to just get off the call. The desperate ones leave you on hold until … as far as I know some of them may have jumped off a bridge …

scumspammersThroughout all the intimidation screens, the insane demands, the lies, delays, and endless holds (once for an hour) PayPal algorithms programmed by either an idiot, a sadist, or a huckster – upped their SPAMMING of me by e-mail. The more their cubicle drones spun helplessly in mindless flow-chart cul-de-sac purgatories, the more the malevolent algorithm seemed to think I would appreciate being offered the opportunity to incur dept to PayPal, or to give them more power to interfere with my financial situation.

 

 

paypalfiredI did what anyone would do: I resolved to fire PayPal, and started to set up an account for traditional credit card processing with another shining example of the parasitic payment/banking systems in America – recipient of a 12$ BILLION bailout, of which almost 2$ billion hasn’t been repaid. That would be J.P. Morgan Chase. I selected them due to some good reviews – at least less-horrible than most.

Because this isn’t about J.P. Morgan Chase, I’ll just share that the JPM “account manager” to whom I was assigned was just a boiler-room cold-caller with more lies than a door to door bridge salesman. I opened an account, but fired Chase before a single transaction was made. (They breached confidentiality and leaked personal, security-sensitive information to a third-party – even against explicit instructions not to do so.)

Wit’s End

After more than four months, PayPal “got around to reviewing my case”. The winner of PayPal’s annual “most arrogant cubicle harpy” award called up to say they just needed to clear up a few additional little things.

Then, she began to run the same list of the same asinine demands for the same things I had either already provided in their upload system MORE THAN FOUR MONTHS AGO – or had informed them didn’t apply.

She lied directly to me, claiming that I hadn’t provided documents that in the previous breath she admitted to receiving and reading – and which their web site acknowledged receiving. When I pointed out that she was a liar, and participating in an ongoing campaign of well-documented and actionable harassment, she tried to lecture me on “being professional”.

In this moment, the concept of “F-bomb” cross-bread with the concept of “carpet bombing” …

She retaliated by hanging up and locking my account with all the funds in it. She sent an e-mail that said I could only get the funds “by providing the requested documents” – which included listing documents I had already provably provided – and licenses which I had informed her directly, and again – didn’t apply to me at all.

Simultaneously, the “resolution center” interface that allows a customer to upload documents was set to suggest I had met all their demands: approvedlockedoutHowever, this also renders inert the ability to upload documents – making it impossible for me to deliver on her demands, even if I had the magical documents that don’t exist. Functionally, this meant they would NEVER give me my money. To me, that meant straight-up theft. An utterly unaccountable cubicle harpy had assigned me an impossible task – one she MADE impossible – as a condition to access my own money.

I did what anyone would do – I went back to work looking for a traditional processor. And, I resolved not to let a day go by without publicly reminding PayPal and their CEO that the money they were keeping was rightfully mine. I did this by posting several tweets to the PayPal accounts a few times a day – asking what it takes to get the money that’s rightfully mine.

Help Arrives

Within a couple of days, PayPal’s official account tweeted back, inviting me to communicate directly with them – by clicking on a link to a “Lithium Tech Portal” – which invited me to give it access to my twitter account – including warning me that it would be able to “scrape” my followers. spyware

This PayPal thing was getting darker and darker. I declined the invitation to authorize spying on my twitter account and resumed just asking for my money. But, it’s always darkest and most impossible just before help arrives …

Soon I got a direct message from “Michael”, who introduced himself a “Senior Specialist”. It was the most personable communication I’d received from the company, and he quickly set up a phone conversation with me for the following day – giving him time to research my account.

To describe my conversations with Michael as “genuinely friendly, efficient and direct communication with no lies and no promises that he couldn’t directly guarantee” seems like short-shrift given all the gory insanity above. But, as with most “magical helper” archetypes in any given story, their appearance is as brief as their contribution profound. If I compare the previous PayPal representatives to drones and lab-rats for their mindlessness, lack of common sense, and inability to get anything done – I’ve got to compare Michael to a wizard or Jedi knight for his articulate sensibility, patience, focus – and ability to make things happen.

My account was “status normal” within 24 hours – with zero further demands or other nonsense.

I’ve dealt with lots of problems, and met lots of people in business, and I think Michael is a true master-level fixer. And, one with the kind of character that lead him to clarify it was his teammate, “Ben” who did the hands-on completion of my “account review” – and turned the valve that restored the flow of money. I hope they compensate these guys VERY well because they certainly deserves it.

After everything else, Michael agreed to spend an hour on the phone with me building some of the remainder of this article. Much of the advice and strategies I’m going to relate from here on came from that conversation. I’m grateful to him for helping turn lots of aggravation into a useful outcome.

My Lessons (and Michael’s suggestions) About PayPal

I want to be positive in this part of this article, but I want to be reasonable, too. Realize that unless your situation gets really bad you probably aren’t going to meet anyone like Michael. You will be dealing with people who are not hired for their business acumen – or for their critical thinking or decision-making skills. You will be dealing with people who do not have the option to use common sense or make a good decision: You will be dealing with people hired to sit in a cubicle and follow a flowchart created by a thoughtless, over-paid bureaucrat. Keep that in mind. It would have been faster and easier for me if I had spoon-fed the people I dealt with rather than expecting them to be competent, interested in the mission, or licensed to exercise any degree of autonomy.

Your Papers, Please …

If you get a demand for documentation, definitely use the resolution center first. It’s the most efficient pathway to getting documents (or notes) into the hands of the people who can lock-up your money. The interface isn’t pretty, but it seems stable in FireFox and Chrome browsers.

WARNING: As of this writing, due to the PayPal side interface, when their people LOOK at the documents you uploaded, their system will put a green check-mark and a “completed” note next to the item. This does NOT mean that item has been approved – just that it’s been looked at. And, this automated action will also prevent you from uploading anything else under that “Required Response”. If they want more, they’ll e-mail demanding more – and you will be unable to comply:

approvedlockedoutDemands that Don’t Apply

If a demand for a document doesn’t seem to apply to you – like a license that doesn’t apply to your industry – don’t skip the item. Don’t try to explain it to anyone. They are unable to deviate from the flow-chart. Instead, create a document explaining that the license they’re demanding doesn’t apply. Save that as a PDF or JPG – and upload it to the resolution center. If you can find an official State web site declaring what your company needs – and their requested document isn’t on the list – include a link and reference it.

I did the “roll your own” PDF document strategy, but didn’t use it to spoon-feed the PayPalists the way I might have. The flow-charts they are following are full of pitfalls. I suggest spoon-feeding documents and information that fits their senseless requests. This may help them follow the flow-chart without getting stuck in a dead-end.

Whether you send official documents or create DIY communications, realize that “your account is not a high priority” – no matter how insistent or urgent they present their demands. They may not bother to even look at what you send for a matter of MONTHS.

Unless you are prevented from withdrawing money, be patient. This was one of the real challenges or me. If they’ve shut your ability to withdraw funds, and you’ve not been smart or forward-thinking enough to have a backup processing company, it’s time to start contacting PayPal (more on both of these things below).

When they do look, they may not understand what you’ve sent. They may e-mail to demand more. And, as I mentioned, you may be blocked from providing it. If you get here, it’ll be time to start contacting PayPal.

Help With PayPal Stuff

As dumb as it may seem, the “help center” may be an efficient way to get information about what is useful to send via upload, how to present it, how to do it, etc.

And, it turns out the “Community Help Forum” has some good stuff crowd-sourced from users and moderated by some knowledgeable PayPal staffers. I saw a thread here where a Peruvian national was getting paid in Euros but wanted to withdraw USD into a U.S. bank account. And, someone sorted that out for them.

communityPayPal has a YouTube channel with over 150 official videos and “how to” stuff like how to run reports you need for tax purposes. You might also try a YouTube search for “how to X with PayPal”…

Off the Rails

If things are going off the rails – if your account is locked, etc – there are five channels of communication you can use to try to get some action:

  1. The User Forum I mentioned above will be my first stop in the future. You’re dealing with volunteer PayPal fans who are doing stuff with the company and the interface. They’re working for intrinsic motivation, not because they’re chained to a cubicle.
  2. Use the “call customer support” link – which is easier to find than it used to be. Alternately, Google “paypal human phone” or something like that. You may get an antiquated list of numbers, but you may find one that will get you through to someone else. I personally had good luck using this strategy to reach “someone” – but never anyone of any use.
  3. E-mail is another option, but I find the “choose a topic” and “choose a sub-topic” and then type in a tiny little box limiting / aggravating. And, I’ve personally had poor luck getting any help from PayPal by e-mail.
  4. Facebook may offer multiple opportunities to connect with PayPal. The most direct is the official PayPal Facebook page.
  5. Twitter offers multiple opportunities to connect with PayPal. One account is called AskPaypal –  which seems self-explanatory. The other is just the official PayPal Twitter account. You tweet @ those accounts or DM them.

Which Is Best?

My personal experience was that phone and e-mail were worthless time-suckers, but Twitter introduced me to a truly golden contact. However, both science and my inside guy tell me this is a sample size of one – therefore not something to build strategies on.

“Think revolver, not shotgun.” sayeth the wizard Michael

If you get multiple contacts going at once you may get conflicting information and have more problems rather than less. It’s more efficient to try one channel at a time. Based on my own experiences, I’ll probably use the help center and community forum FIRST – followed by Twitter or the Facebook page early for any future issues.

My Conclusions About PayPal

I think they’re a company struggling with the three G’s of corporatism in America, and particularly of the financial sector: Government, Growth, and Greed.

Government says the way to protect innocent people is by spying on innocent people – and the financial sector is a good vehicle for doing that: Just pass legislation to conscript them to it.

Growth taxes systems and human resources. And, PayPal has certainly grown. Maybe much of what we’re seeing is “growing pains”. We can alleviate that load by spreading our business around to other providers of payment services.

Greed leads people to short-sighted decisions in hiring, compensation, and management of people and other resources. Along with growth and regulation it can really kill the lifeblood of a service company: the actual service. The pathological craving for “more” is apparent in the apathy of their employees – and even the form and style of their demands for “more” information – without even  being able to define what they want. I hope PayPal gets a handle on all these things and returns to facilitating entrepreneurship in America.

I will keep doing business with PayPal for now – although in a greatly-reduced way. (More on this below.)

Payment Processing Strategies

Companies like PayPal and Stripe – I’ll call “Internet processors” charge excessive fees relative to traditional credit card processing. They also may have more aggressive charge-back policies that cause you more exposure to loss. They also have more aggressive polices about “putting a hold” on your funds. (Their opinion or feeling is all they need to give themselves an interest-free loan of your money – for up to half-a-year).

DO NOT use any of these payment processing companies as your exclusive way to get paid by your customers. It’s a huge pain to maintain multiple accounts. However, you can’t afford to be loyal to companies that have no loyalty to you. DO NOT use any of these payment processing companies for a transaction where you can’t tolerate a chargeback loss – or a 180-day hold.

Traditional credit card processors charge lower fees, have generally less-aggressive charge-back policies, and generally less-aggressive “hold” (free loan to them) policies. But, you’re still exposed to those risks.

Wire transfers and certified checks may be slower and less convenient. But, for larger transactions (and some international ones), they may be the best choice. I personally require “negotiable funds” for larger transactions.

There are new players as well, including companies like TransferWise and InstaPayEscrow. Let’s hope the marketplace continues to grow. Use the right kind of processor or payment mechanism for the transaction you are doing.We use a reserve parachute in paragliding. We use back-up systems for anything else mission-critical. But, I hate bookkeeping with a passion – so I didn’t have a backup payment processor.

If you are like me, one of the reasons you are in business is because you didn’t enjoy being limited and bossed-around by people who are incompetent or malevolent. Using only one processing company will put you back in that boat.

This poor guy doesn’t even have a life jacket. We should. Have at least one backup payment processing company.

The financial services industry is … well, look at subprime mortgages, the S&L bailouts – and my story above. Let’s face it, the processing industry is like a pick-up-artist convention on crystal meth. Many of the employees are low-rent, low-honesty, transient workers filling-in between used-car-sales positions. And, the companies know or even encourage the dishonesty (Google “Wells Fargo scandal”) – and are practiced at profit-by-bullying-and-stone-walling.

cubicleratGoogle “credit card processing”. List some of the companies. Then, Google “Company, Inc sucks”. It’ll be quickly obvious that this entire sector of business is full of liars and thieves. There’s no sound way to find the least crooked among thieves. By next week someone will want another yacht – and the cubicle rats will be hitting even more dead-ends in new policy flow-chart mazes designed to chisel you even deeper …
For what it’s worth, my longer-term experience with PayPal has been better in total than any of the other services I’ve used. The bar is really low, here, but what are you going to do?

If you’re a creative trying to do business, you may travel – or you may do shows. Significant parts of your yearly income may be dependent on a given show or three. All of these processors are infamous for locking-up accounts of people in the midst of product launches or big, financial-survival-level shows. If you don’t want to give an idiot bureaucrat or a mindless or malevolent cubicle rat an off-switch for your income, don’t give them a monopoly on moving money from your clients to you.

I think the best solution involves using multiple processors to disperse capital and to have a “bench” you can pull from when any one “player” starts to fail. And, I think it’s good to consistently audit fees on all the accounts (this is the part I hate) to catch chiseling thieves early – and trade them for a new player.

I hope this article was useful, informative – or at least entertaining. If you have suggestions or strategies you’d like to share with the independent jewelry artist community for getting paid – and not getting screwed – connect with me. I’d love to hear what you know.

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