Monday, October 24, 2016

Payment Services: Paypal Sucks, Square is Getting Better

Paypal sucks.  I have written about this before, but I have had two new experiences that have made me try to find other ways to transfer money and accept payments from customers.  There are few alternatives to Paypal out there.  There's also a lot of misinformation out there.  In the results from a Google search, most posts about competing payment services are outdated. 

So here's my big tip for the day: if you are a seller of goods or services, or have a need to collect a payment from someone -- try Square.  I've been using Square for a few years now, and they've been great. 
Square has a new feature so those of us who run small or home offices can collect money without having to ask for credit card information.  In the past, this was a problem.  If you were like me, you had clients all over the world that would like to pay you using a credit card.  Paypal would not work for them for many reasons (plus, Paypal really, really sucks  -- read below and in my previous blog post).  If you used Square, then you had to ask for the client's credit card information, address, and other information -- then pull out your iPad or iPhone, and laboriously enter the information in the Square app on your iPhone.  The app was confusing.  The clients did not feel comfortable giving out their credit card numbers.  I generally only used Square a couple of times per year. 

Square has improved greatly.  I recently sold a lens to a photographer in Washington DC.  She told me to send her an invoice -- using Square.  I researched how to do this, and discovered that I could create an invoice using Square using my desktop browser.  Finally, I could use my Mac rather than my iPad!  I sent her an invoice from Square to her email address, and that was it!  I did not need to get her credit card information, or even her physical address (but of course I did ship her lens to her address).  She paid the invoice to Square, and Square put the cash (minus their 2.9% plus 30 cent fee) in my bank account the next business day.  Wow -- simple, efficient, and awesome.  Kudos to Square!

When Paypal hosed me recently, I spent hours researching other payment services.  I even tried Google Wallet.  In short, do not waste your time on other services, other than Square!  Paypal is the only established peer-to-peer payment service out there these days, unfortunately.  It's the only established player in this space, and people feel comfortable with it.  As one website writes:  There’s not a single payment service out there that offers the international reach, merchant services and overall ease that PayPal does.

Here's what I discovered:

Venmo: I signed up for an account, and then I discovered that Paypal has bought Venmo.  One down.  I am trying to find an alternative to Paypal!

Amazon Payments: It appears that this service is no longer is a peer-to-peer service. I believe that this is set up so folks selling on Amazon can set this up to accept payments on their websites.  It is not the right peer-to-peer funds transfer service that I was looking for. 

Google Checkout:
from the web: Google Checkout was discontinued on November 20, 2013.  The company offers a new solution for certain payments called Google Wallet.

Google Payments: was there even a Google Payments, or is that a figment of my imagination?  There must be, since Google's emails to me (see below) mention Google Payments several times.  Yet, doing a Google Search today (October 23, 2016), I can't find a single mention of Google Payments.  It's eerie to think that something like Google Payments can be just wiped out by Google. 

Google Wallet: I signed up for an account with Google Wallet.  Google Wallet used to be part of Android Pay, but now it's different.  Here's what said about it:
"...The slimmed-down Android app (Google Wallet) is now more focused on mobile payments between individuals rather than businesses. In other words, it's a direct competitor to our Editors' Choice Venmo. It works, but it's a shame Google Wallet had to strip out so many features to find its current focus."

Here are some notes I collected about Google Wallet:
"Send money to anyone in the US using an email address or phone number. It's fast, easy, and free to send directly from your debit card, bank account, or Wallet Balance. You can do all this in the Google Wallet app, or, if you’re on desktop, you can also send and request money in Gmail.

"When you receive money, you can quickly cash out to your bank account using your debit card, and get access to your money within minutes.

"You can send money to or request money from anyone in the US with an email address or phone number through the Google Wallet app, on Gmail, or at"

I personally found all of Google's choices confusing. Google Checkout?  Gone.  Google Payments?  Wiped out without a trace.  Google Wallet is indeed still around (and I tried it, leading to the type of corporate snafu that I try to avoid assiduously).  It apparently has gone through several remakes; Android Pay was spun off from Google Wallet.  Whatever. 

I found that Google Wallet was not a very good service, to say the least.  Their representatives gave me misinformation, and the process was handled poorly.  I give more details below. 

Paypal Really, Really Sucks: 
Before we get to Google Payments or Wallet or Checkout or whatever -- I would like to offer some more experiences (all bad) on Paypal.  In short, Paypal really, really sucks.  I wrote about them in a previous blog post, but these are new discoveries of how bad Paypal sucks. 

First, anyone who is concerned about computer security should use a VPN on open Wi-Fi networks.  I use Torguard's VPN and discuss it in a separate post.  It's very easy to set up.  I signed up to Torguard (it costs $60 per year but is often discounted), downloaded their VPN software, and open their app when I need to.  That app routes all my data through one of their servers.  Your data should be encrypted as it goes through their servers from your laptop, and it is thus supposedly protected from prying eyes that may have hacked an open Wi-Fi network like Starbucks or an airport. 

Obviously, if using a public wifi hotspot, I'd want to access my Paypal account through a VPN, for the best security.  Why in the hell would Paypal not allow this? 

I logged into Paypal from an airport, through my VPN network, and Paypal would not let me enter my account.  They later froze my account and would not let me transfer funds in or out until I supplied identifying information.  I was out of the country for a month and had no access to the funds in my account.  When I returned, I tried verifying my information, and it was impossible to do -- Paypal refused to accept my phone number and would not believe that I was the owner of the account.  I gave up -- the last thing I want to do is talk to Paypal's useless customer service people.  The account was a secondary, personal account so I only had about $60 in there.  After several months, Paypal sent me a message saying essentially that I could no longer use the account, but I could transfer the funds out of there.  I read in a post that Paypal's terms of agreement compels Paypal to release your funds after 180 days. 

This is simply ridiculous.  Folks who use a VPN to protect their data, like their username and passwords, are not allowed to log into Paypal?  If I am in a Starbucks or at an airport using a public Wi-Fi service, then Paypal is forcing me to use a lower-security method to log into my Paypal account.  Paypal disallows me from using a VPN, which protects my data when using a public Wi-Fi hotspot. 

Wait, here's another way Paypal sucks. 
I've been selling old gear on Ebay and accepting Paypal for several years now.  Suddenly in one month, I coincidentally got two customers, who had bought items from me, stating that their "purchase was not authorized", which resulted in a "chargeback."  A chargeback is a situation where a customer disputes a charge with their credit card company rather than directly through Paypal, or maybe it is both the former and the latter.  Regardless, if a seller gets a chargeback claim, Paypal screws the seller. 

Here's a scenario from a forum:


 If anyone has ever filed a charge back on your Paypal account, and the chargeback was won by the buyer, you had BETTER go check your Paypal account, they keep the fees they charged and take that amount from you along with the amount you were originally given. I don’t believe it is an oversight.   for example,I sold an $1185.00 item,paypal paid me $1150.33 and took thier fee of $34.67,but when the chargeback was found in the buyers favor,they took $1185.00 from MY paypal account,and CONVENIENTLY forgot to refund me the $34.67.  Oversight? or Class actionable?   How many millions of chargebacks have they done this with? 

end quote

Any seller who loses a chargeback claim -- and generally you will lose, all the seller has to do is state "item not as described," will then be charged a $20 chargeback fee from Paypal.  From what I understand, Paypal is passing on a chargeback fee from a bank or credit card processor. 

In my situation, a buyer purchased a hard drive off Ebay from me.  I shipped the item and tracked it.  I then left for a trip.  When I came back two weeks later, I discovered that the buyer had refused to accept the package (likely, he changed his mind after buying my item) and had filed a chargeback claim, stating that the purchase was unauthorized.  I was lucky that the buyer actually refused the package -- other Ebay sellers generally have the same thing happen (have to refund any payments, pay chargeback fees, etc.) and the buyer keeps the item (for free). 

Paypal refunded the entire amount to this buyer, and charged me a $20 chargeback fee.  THEY ALSO KEPT THEIR PAYPAL FEE of nearly 3%!  This is simply outrageous. 

As an example with numbers, the above hard drive sold for $100.  I paid $3.90 to ship the item out; the item came back to me.  I had a 20% restocking fee on my Ebay listing to protect against buyers who change their mind without good reason, but Paypal never asked about this policy or considered it.  They simply immediately refunded this buyer the ENTIRE amount that the guy had paid (he was a fraudulent type of buyer; his Ebay user name was paulsamuels1132 or something like that, but his real name was Pranit Sampei).  I was out the cost of shipping, the loss of the item's use for two weeks, and was not able to charge a restocking fee.  On top of this, Paypal charged me a chargeback fee of $20 plus their commission. 

Let's do the math as a seller:
You sell a $100 item. Paypal gets a nearly 3% fee for collecting the money.  You get $97 for the item. 

The buyer pays $100.  You send the item out.  He refuses delivery of the item and files an "unauthorized purchase" claim with Paypal or his credit card.  He gets back his entire $100. 

The seller initially receives $97 of this sale (I am simplifying this).  Paypal retains $3 (its nearly 3% commission for transferring the funds).  When the buyer files a chargeback claim, Paypal gives the buyer the entire $100 back.  Paypal then charges the seller $20 for the chargeback claim. 

Paypal then withdraws $100 from the seller's account.  But wait -- Paypal only ever paid the seller $97 for this transaction.  What happened?  Here's the deal -- Paypal KEEPS ITS COMMISSION/FEES even in a chargeback claim.  It wins either way.  If a seller loses a chargeback claim -- and in my experience a seller almost always loses, regardless of how fraudulent the buyer is -- Paypal still keeps its commission and passes on chargeback fees to the seller.

Paypal's practice in this situation is absolutely unethical.  I am surprised that it has not been hit with a class-action suit about such practices. 

I have not included sellers' losses from shipping fees, or Ebay commissions on sales (which are refunded in full in such situations, as far as I can tell). 

Lastly, Paypal makes it difficult to see what the fees that they charge you.  Chargebacks don't show up in your activity reports.  I've looked and looked. Items relating to chargebacks were impossible to find, anywhere I looked, in all activity, transaction, and report sections.  Again, outrageous. 

My Experience with Google Wallet (or is it Google Payments) Leaves Me $115 Richer!
I tried Google Wallet.  But I will not try them again. 

I went through the process of registering Google Wallet's required details, such as providing my bank account information.  I then made the mistake of SENDING $115 to the buyer rather than ASKING for that amount.  It was a bit too easy to do, and there was no way to cancel the transaction.  Ouch! 

I immediately contacted a Google representative via chat.  He told that
Google would cancel the transaction, and that it was OK if the balance in my bank account was low -- the $115 to be sent would NOT be withdrawn from my account -- the transaction was cancelled.  I therefore, for safety's sake, withdrew funds from my account to the amount of $5 -- after making sure that this would be OK with the Google representative.  However, contrary to what the Google representative said, Google Wallet then withdrew the $115 from my account. 

My bank charged me an overdraft fee and told me that I should put a stop payment on the account.

I disputed the charge, and I put a stop payment for any payments to Google. Google then wrote me:

"From: Google Payments
Date: 6/15/16, 2:47 AM
To: norbertwu
Google     Safe & Secure

Hello Norbert Wu,

For your security, we've disabled your Google Payments account so no one else can use it.

You requested that an unrecognized charge to your bank be returned to your Checking  • • •  = ddd account linked to your Google Payments account.

To help our investigation and to unlock your account, sign in to and verify your information. Otherwise your account will stay locked.

Google Support Team
Google Wallet     you have received this mandatory email service announcement to update you about important changes to your Google Payments account.
Learn More | Help Center | Privacy Notice | How to recognize suspicious emails
Google Payment Corp., P.O. Box 1568, Mountain View, CA 94042   "     

I wrote Google, explaining the situation:

" Dear Google:
    A few days ago, I tried to request money using Google Payments for the first time.  I mistakenly SENT $115 instead of requesting it.  I immediately contacted Google via chat and the Google rep cancelled the transaction.  It shows as cancelled in my order history.  The Google rep confirmed that if my balance in my bank account was around $5, the $115 to be sent would NOT be withdrawn from my account -- the transaction was cancelled.  I therefore, for safety's sake, withdrew funds from my account to the amount of $5.  Contrary to what the Google representative said, Google Payments then withdrew the $115 from my account. 

    My bank charged me a fee and told me that I should put a stop payment on the account.

    They have disputed this $115 charge and now I received the following message from Google:

    "Hello Norbert Wu,

    For your security, we've disabled your Google Payments account so no one else can use it.

    You requested that an unrecognized charge to your bank be returned to your Checking  • • • ddd account linked to your Google Payments account.

    To help our investigation and to unlock your account, sign in to and verify your information. Otherwise your account will stay locked.

    Google Support Team"

    This is all very frustrating.  I assume that the Google rep gave me the wrong information, and that Google Payments will be issuing a credit to my bank account (or would have, had I not disputed). 

    I am sure that the above will play out.... however an app developer has refunded me $14 and I have not seen it in my transaction history as of yesterday.  And I can't get to my account now. 

    Also, how do I get a copy of my chat?  Is this something that I can with a click or do I have to cut and paste the text of the chat? 
Signed, Norbert Wu

 Steve Laydon at Google wrote me back:
  On Wed, Jun 15, 2016 at 10:18 AM, wrote:


        Hi Norbert,

        Thanks for contacting Google. Since we weren't able to complete our conversation via chat, I wanted to follow up over email.

        I'm sorry to say that our specialist has determined that this account must stay closed due to violations of our Terms of Service. (Per the Google Payments Terms of Service, Google Payments Corp. reserves the right to change, suspend or discontinue any aspect of the Services at any time, including availability of the Services or any Service feature, without notice and without liability.) I'm afraid that my team can't discuss the specific circumstances of this or any account closure.

        Your previously pending transactions have been canceled. Authorization confirmations for these transactions may still appear on the transaction summary for the payment method you used, but your account hasn't been charged. Such authorizations should be removed within 10 business days (14 days), depending on your bank's schedule.

        If you have any more questions, please reply to this email. I'm happy to help!


        Steve Laydon
        The Google Support Team
        Google     Google Help Center
        © Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043 USA     Google+ Twitter
So that was it.  Classic big corporation snafu, where their own representatives give misinformation, and the customer is then stuck with a bad situation requiring hours of chat and written correspondence to fix.  In this case, my bank refunded the $115 that Google wrongly withdrew from my account (and the overdraft fees), and Google refunded the payment also.  So I am $115 ahead! 

Hey Google, if you want to review this account, then be my guest.  I have $115 waiting here for you if you want it.  But if you do contact me, then I might say this:
I'm sorry to say that I've determined that I want my account to stay closed due to Google's crappy customer service and misinformation. I'm afraid that I do not wish to discuss the specific circumstances of this or any account closure, or how Google Payments wasted my time.  Thanks for the $115!  It barely covers one/twelfth of my time spent on this. 

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