We are a small new hosting firm and I just contacted PayPal, but I soon realized that we could not use them because there is no such thing as doing a pre-authorized monthly billing thing via credit card. And they do not give out, even your own customer IDs and credit card numbers so we would not be able to get them into our monthly billing system. So I guess we would have to chase down our hosted customers once a month and persuade them to re-fill in their sign-up form and make a payment?!?!

Are you using PayPal for your hosting service? If so, how is that working for you?

If you're just offering PayPal as an alternative method of payment for those who want to use it, I'd say treat it the same as checks. It's the responsibility of those who use that method of payment to get their payment to you on time; if they don't, suspend their account after a grace period until they pay up.

Paypal has worked fine for us so far, but we work on a different business model from others. Since we allow customers to make payments whenever they like, in whatever amount they like, as long as their account balance remains positive (we keep track of their payments and deduct amounts based on their usage daily).

But I can see that for traditional webhosting companies Paypal's lack of recurring billing could be a problem. On the other hand, is it any harder to deal with than the complications and costs of handling credit cards?

Good point. And interesting business model you've got there.

Our other company uses PayPal as the only payment option. Its ideal if you offer hosting pre-paid a year in advance.

We moved the site from accepting credit cards to paypal only and as a matter of fact, there has not been any slow down in signups

How will Paypal handle it if there is a fraud order?

Someone goes to your site and pay via paypal. If that person uses a stolen credit card to order, wouldn't Paypal freeze your paypal account?

Asia: sometimes yes they do freeze accounts if they think the account itself might be fraudulent -- if, for example, you created it yesterday and since then you've had two orders both with stolen credit cards, they'll (rightly) get suspicious. In all the cases I've heard of, sending documentation to Paypal to prove your identity has gotten accounts unfrozen.

I believe reading somewhere on PayPal's site that your customers do not have to be deal with PayPal, meaning you take the order and then go to PayPal to process the credit or debit card charge. Thus, for recurring charges, this should not be a problem... unless it becomes a time consuming task.

Yes thanks. The only problem with that is that we are already set up to process CCs in house. We were just looking for that "trusted", well recognized authority for receiving the payments on-line.

You may want to check out:

http://www.instabill.com
http://www.revecom.com

Both accept recurring orders.

Joe,

It's my understanding with PP the customer has to send payment to you. You can't charge them directly.

As for freezing accounts I've heard horror stories about accounts being frozen (receiver accounts) because someone sent them money on a fraud or stolen CC. PP isn't supposed to freeze the whole account but I've heard that it does happen.

We are using Revecom to accept cc payment for our web hosting business also.

http://www.revecom.com

They offer recurring billing and the control panel is cool.

Using a 3rd party processor may not be a great idea for web hosting, since you do not get to see the credit cards.
That would be a problem if you are trying to move out + the billing procedures will be pretty confusing as to who is getting denied and who isn't.

Hi,

Accounts are rarely, if ever, frozen over a single transaction. There has to be some serious fraud flags for that to occur and we generally place the transaction in question in a pending status.

You may want to check out the subscription service that just launced.

Please feel free to ask me any questions.

I've looked at the subscription service (i.e., recurring billing) and it seems like a big step in the right direction as far as hosts are concerned. And if I understand it correctly, we can even hand off variables to PayPal from our own payment page, thus enabling us to capture customer contact data.

My only two remaining concerns are: 1.) Is PayPal fully international and 2.) Customers get the feeling they have to "join" something in order to pay a bill, therefore it seems a bit. . . unprofessional.

We are not fully international (yet) and we are looking at other regions to expand into (We generally avoid doing businesses in countries with high credit card fraud rates).

Users do have to join to use the service, but I would take into consideration that we already have 9 million users. A fair number could already be active members.

What countries, in particular, are you interested in? I can get it on Product's radar.

Originally posted by paypaldamon

Please feel free to ask me any questions.

I am not living in USA or other country you support, but I have a mailing address in the USA can I join paypal?

I don't see an issue per se. It would depend on whether or not the information on the account could be confirmed (credit card,bank account,etc).

Originally posted by paypaldamon
Hi,

Accounts are rarely, if ever, frozen over a single transaction. There has to be some serious fraud flags for that to occur and we generally place the transaction in question in a pending status.

I know for sure that fraudulent transactions are placed in a pending status as that has happened to me. A kid used her parents cc to purchase an online item, therefore, intangible. After the transaction has been concluded, and after some time, I logged into my account only to see a chargeback for that amount.

In their Terms of Use, it states this:
Receipt of Payments; Risk of Reversal of Transactions; Collection of Funds you owe PayPal. When you receive a payment through the Service, unless you follow the steps necessary to qualify for our Seller Protection Policy described in Part IV of this User Agreement, you are not protected against a subsequent reversal of the transaction. In the event that the sender’s transaction is reversed for any reason and you do not qualify for the Seller Protection Policy for that transaction, you will owe PayPal for the amount of the reversed transaction plus any fees imposed on PayPal as a result of the reversal. Examples of such a reversal include, but are not limited to, a credit card charge-back by the sender of the payment, and a reversal of the transaction because the sender of the payment was using a stolen credit card or unauthorized checking account. PayPal will seek to recover the funds from you by debiting your PayPal balance and, if there are not sufficient funds in your PayPal balance, PayPal reserves the right to collect your debt to PayPal by any other legal means. You authorize PayPal to charge your credit card or debit card, in the amount of any debt to PayPal.

The amount for the transaction has been cleared some time and after several emails to them, only then did they say that the chargeback was due to fraudelent usage of a credit card. If I had not logged on to check my account, my cc would've been debited without my knowledge if I had not had sufficient funds in my account.

I'm very suspicious of using paypal now for any future transactions.

I infact do know of someone's account that was frozen over one transaction. They paid us, and never used it again. Comes time to renew the domain a year later... account frozen. I worked with customer and they had to send in CC statment, drivers license, and utility bill. They claimed suspicious activity. Maybe because they never verified address or something?

Hi,

What about e-gold?

Paypal isn't fully international yet as I have an account with them. I am able to send and recieve payment via Paypal but can't withdraw money from my account as I do not have a verified bank account with Paypal.

I have come across some stories about receiver's account frozen... can't remember which website do have that related articles.

Choon


Originally posted by Get-Hosted.com
I infact do know of someone's account that was frozen over one transaction. They paid us, and never used it again. Comes time to renew the domain a year later... account frozen. I worked with customer and they had to send in CC statment, drivers license, and utility bill. They claimed suspicious activity. Maybe because they never verified address or something?

Hi,

Please bear in mind that account restrictions are rare. They were more common last year (before we had the ability to isolate a transaction) and we now have faster response times in un-restricting accounts (which are generally resolved by the user providing the requested documentation).

As is relates to chargebacks, we do place it in a pending status. We wait for the receiving party to supply the requested documentation before asking the party to assume the liability for the chargeback.

Yes, accounts can be restricted/frozen. However, there has to be:

1. A solid indicator of fraud.
2. Excessive chargebacks are also a sign of potential fraud.

Egold does carry a high risk factor with credit card purchases.

Originally posted by paypaldamon

As is relates to chargebacks, we do place it in a pending status. We wait for the receiving party to supply the requested documentation before asking the party to assume the liability for the chargeback.

Just wanted to say that I received NO SUCH REQUEST from paypal. The transaction was placed in pending long after I had accepted it and the new balance shown in my account. I'd say it again. I was unaware of any chargebacks being done and would continue to be unware if I had not logged into my account to check.

Since it was for an online game item, I can't really provide any proof or documentation. I only have the request to purchase the item via email or a game mail. Therefore, I was stuck with a $200+ chargeback because a kid paid with her parents card and then upon the parent finding out, decided to do a chargeback.

It is difficult for me to see what happened in your account with access to the records, but this is what should have happened:

1. Chargeback notification received by us.
2. A pending reversal would be placed on the transaction, which would reflect a negative balance in your account ( no liability, however, has been assumed until the documentation is presented).

As a note, the Seller Protection Policy does not apply to non-tangible goods.

Chargebacks are a fact of life when accepting credit card payments. As a positive note---most transactions do not result in a chargeback.