Paypal's new merchant account system may be fine for the occasional transaction but we have found that they are terrible for anyone dealing with prestigious clients. It has to do with the way they process approvals and their security model that will actually stop the transaction when they already have an approval and tell YOU the transaction was denied and make it seem like by the credit grantor because they say card denied not we rejected the transaction for reasons we won't tell you.

First let us say that we did $1.7M in sales last year. We are a division that has been around 10 years and the parent generated $7.1 Million last year. We have A credit and no debt. All library books are brought back on time.

It started when years ago we used paypal RATHER than using a real merchant account. It was a cheap way to do business. But then we had some transactions denied. However, the clients that their card was denied were actually real estate agents that have excellent credit, make $400k a year and had no balance on the card they gave.

We were puzzled. But after a few happened within 60 days we started looking into it. Apparently PAYPAL has a mysterious security model that will decline a transaction and give no reason other than well the security model turned it down

Go up 3 levels at paypal and you get the same buzz phrase. Its there answer to get you off the phone. They don't care.

Looking at the situation where affluent clients we had were getting snobbed by paypal we had not other choice and step up and hire a legitimate merchant account company. Well we  have had no problem.

Then Paypal launches their merchant account and says they are better and cheaper. One of our 3rd party providers swore by it its great. So we split up our transactions, half with each.

For the first 30 days was great. Then the other shoe dropped. A client came to us for our top of the line site and gave us their card. Paypal said the card was declined. We contact the client and they check with their bank. Long story short we find the transaction WAS approved by the bank. The debit card showed it was charged $1.00 for verification and then the full amount. The funds were out of their account AND we didnt have the funds OR an approval

See PAYPAL, after 3 people and an hour of being on hold, finally admitted that they DID get an approval from the bank. But their security model declined the transaction. The security model declines the transaction AFTER they got the approval not before.

We can go on and on but the bottomline is this. Paypal is censoring who you are going to do business with. Their security model stops legitimate transactions and tells affluent and highly professional clients (who make more than the person that developed the model) that they are declined.

Do YOU want to play russian rouelette with your business by having you and your client go through this experience

We are no longer using paypal because we can't rely on it and we don't appreciate their security model telling our legitimate, affluent and highly professional clients that their credit is not good. 

When paypal turns down a transaction the client sees that WE are turning them down or that something is wrong with us.

Stay clear of Paypal for doing serious business. Selling bunny clips for .50 yeah maybe but dealing with considerable price points and presitgious clients Think about it

Do you want them making a judgment on YOUR clients or giving the appearance that your business has a problem collecting on a perfectly good card