Which “Payment Processors” Do You Use / Trust?

Jun 13

I’ve seen a lot of talk recently about several well-known marketers having their Paypal accounts frozen for various reasons. These are certainly NOT new issues either – such things have been happening for years. Whilst I don’t know all the “ins and outs” of each case, I know enough about doing business online to say that as marketers we should always have a backup plan. If you take nothing else away from this blog post, please remember that!

I certainly don’t ever recommend “putting all your eggs in the one basket” – especially if it’s your livelihood at stake. And that includes using Paypal as your only source of payment option or becoming solely reliant on ANY one payment option.

I’m certainly looking hard right now at how I can become less reliant on any one payment method and I wrote this post so that I could hear your thoughts.

I should also make it clear here that I’m NOT here to bash Paypal but simply to offer a platform where we can share trustworthy alternatives for those who no longer have a Paypal account, can’t accept Paypal due to where they live or simply do not trust them.

It’s no big secret that there are a lot of people out there that HATE Paypal. You only have to jump into the WarriorForum or any other respected forum and you’ll hear the horror stories. There are whole sites dedicated to exposing some of the Paypal horror stories… some which of course are not entirely accurate or present a slightly biased view.

It would be fair to say that many of those who have had their accounts suspended or frozen have in fact broken one of Paypal’s many Terms and Conditions. The problem is though that you can talk to two different reps at Paypal and get two completely different answers – so it’s hard to know what IS acceptable and what ISN’T until it’s too late.

Having said all of that, there are far more people that actually LOVE them than HATE them!

That’s what makes it tough for us as marketers – because even when we offer alternatives, 90% or more of our customers choose to pay via Paypal. I’ve tested this in my own businesses and well over 90% of my customers pay via Paypal.

So…. I wanted to hear your opinion on a few things…

AS A VENDOR (SELLER) what are the alternatives? What’s your fallback plan if anything was to happen to YOUR Paypal account?

AS A VENDOR - Which Payment Processors Do YOU Use?

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AS A CUSTOMER - Which Payment Methods Do You Use and Trust?

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There is a lot of talk and speculation amongst the Internet Marketing community (rightly or wrongly) that Alertpay may become the next big payment option for marketers. They operate in a similar fashion to Paypal but appear to be a little more “flexible” in their Terms and Conditions.

Do you have an AlertPay account?

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Do you have an active Paypal account currently?

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And finally…. if you use Paypal regularly….

AS A BUYER - What is it about Paypal that you like the MOST?

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AS A SELLER - What is it you like about Paypal the MOST?

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As marketers, we need to share our ideas and solutions to problems which arise from time to time. We need to be prepared for any eventualities – even if they seem unlikely. That’s why I want us to start some discussion about these things now so that we can take steps to reduce the risk.

Please feel free to share any comments as I would love to hear everyone’s thoughts on alternatives to Paypal or related issues.

19 comments

  1. Aaron, as you know my Paypal accounts were shut down recently, along with no less than a dozen other marketers that I know. The reason Paypal cites is scary, that we sell products in the “make money from home” niche, which they claim is high-risk.

    Folks can find out more about what is going on at this link:

    http://derrickvandyke.com/warning-your-paypal-account-is-at-risk.html

    I’d like to thank you for taking the time out of your marketing to do this research. My own poll has turned up 50% of us already have Alert Pay accounts, which has a similar internal IPN as Paypal, meaning it can be used in affiliate systems a very similar way to what we are used to. This could be the beginning of the end of Paypal’s use by affiliate marketers, as we are being boxed into a corner… and as a group we may be able to fight our way out of it. Again, check out that website folks and get up to speed about the problem… help may be on the way. In the meantime, no matter what anyone tells you, even if you have a “REP”, don’t take in too much money all at once in Paypal, it creates a flag which gets your account checked.

  2. As a seller and buyer, I’ve been happy using
    Paypal for several years now and I didn’t
    have any problems with them.

    I heard the latest shocking stories from
    fellow warriors about their accounts
    being frozen and it’s really sad especially
    for us marketers.

    Now, I’m starting to consider other payment
    processors but I will still use Paypal and
    be more careful.

    I do have AlertPay account, but haven’t use
    it yet.

  3. Hi Aaron,

    I use PayPal for most of my sales, and they ARE convenient and secure, but I do have issues with them.

    The main problem is in relation to my membership site. I’ve had people pay with a credit card and PayPal deem it fraudulent, even when the buyer has proven otherwise.

    The result was the buyer would no longer use their credit card or PayPal to pay their membership, and I lost both the payment in question AND the member.

    I spent a long time trying to get this sorted, but PayPal simply weren’t interested.

    I still use them, mostly because I haven’t been able to find a suitable replacement (Clickbank charges way too many fees), and most people trust them.

    PayPal are fine until there’s a problem. Then all hell breaks loose.

  4. Hey Aaron
    I got my Paypal as a buyer some 5years ago and it made ordering easy.
    But you are correct we do need a plan -B-Correction we must have a plan – B- to be safe and not sorry when things go bad.
    Thanks a million
    James

  5. Frank Pacey /

    I found the story of StormPay quite interesting. See http://en.wikipedia.org/wiki/StormPay .

    How can we be sure another similar payment processor will not go the same way?

  6. Aaron /

    @ Frank Pacey

    You have a very legitimate point here and I was in the IM arena when Stormpay launched and when it went belly up! I guess there is no way to be 100% certain but from the research I have done on Alertpay (as just one of the many options we have available to us as marketers), it seems that they have a fairly good reputation. Time will most certainly tell I guess!

    @ james

    Thanks buddy… I do believe we should be prepared for all eventualities.

    @ Cheryl Wright

    Yup… I’m hearing ya… “ya can’t live with ’em and ya can’t live without ’em!”

    @ Todd Gross

    I really don’t understand the mentality of Paypal in many cases. I mean – most companies would tell you you did something wrong and either a) suspend you for a short period or b) warn you to get it fixed. I could understand a very new account being treated more severely but an account with no previous issues and being used for years? Not good..

    @ Anthony Fesalbon

    Thanks for your comments buddy… I think we do all need to be a little more prepared so good on you for starting to look into alternatives.

    Aaron

  7. Frank Pacey /

    Hi Aaron.

    So far I have only been a purchaser. I found PayPal OK until I tried to purchase an item with the price increasing.

    At my first attempt, I tried to purchase for 5.30 USD using my laptop computer. My account details did not come up automatically as on my desktop computer. The purchase just stopped – very disconcerting. I submitted a ticket and was told it was a security issue. The suggestion was to pay in my own country (done) and use my usual computer, which I did later after wasting a lot of time and paid 6.15 USD. Well done, PayPal.

    It was pretty bad that it looked like my Internet connection was slow or had hung up. I should have at least been told my purchase attempt had failed.

    The Internet service account was the same in both cases.

    Sometimes it is more convenient to use my laptop computer. Is PayPal dictating to me that I must use my desktop computer when paying by PayPal?

    This raises another issue. It may be necessary, when travelling to a different country, to clear it with various financial institutions if you intend to draw money from your account(s).

  8. Hi Aaron,
    thanks for the heads up on AlertPay.
    Haven’t come acroos them yet but will definitely be looking at opening an account there.

    Just getting into selling in the IM niche and as my main business is still ebay it would be a disaster to get the PP account shut down.

    Hopefully enough people can bring alternatives into play to prevent the monopoly that PP has developed in the auctions market occuring in the IM niche.

    I’ve tried offering other options (merchant account/Moneybookers/Nochex) but for ebay UK at least it is pointless.
    People have been so forcefed this idea that PP is the only “safe” payment processor it is only after they have been scammed that they start looking at alternatives.

    Off to check out AlertPay’s ToS :-)

  9. Aaron,
    Great article which points out the conundrum that we are now finding ourselves in as IM’ers. PayPal pretty much has all of us sellers and buyers by the “short and curlies” and if they so choose could pretty much decimate or even collapse the complete industry in one stroke of a pen (click of key, I guess?).

    I have an AlertPay but have not used it in years so am not even sure if it is still viable at the moment. I gave up on it due to the higher-than-PayPal fees and difficulty in funding it (at the time I could not connect it to an automatic debit from my bank as I do with PayPal).

    Certainly have brought up some great thoughts to ponder and thanks for making us all “sit up and take notice” about this situation. Better to be a bit prepared than woefully caught with our pants down.

    Cheers!

  10. I have also heard about marketers trouble with PayPal and I have 2 accounts, one is personal and the other I inherited when my husband died. I worry about this because they state you can not change ownership of accounts so I never called them like I did with all the other companies my husband did business with so I worry that they will find out and freeze the account. I’ve always had access to the account because I did the books for our biz and all but one of mine recurring payments from current customers goes through paypal.

    I haven’t taken the time or had the time really to look into other options but I do know it is something that I will have to do eventually just for my own protection and peace of mind. So I am very interested in this latest development.

  11. I am sure most people in the IM industry have experienced that it is not good to put all your eggs in one basket.

    Even imagining the worst case scenario for any online payment processor – that it vanishes without any explanations or recourse…

    You should DEFINITELY have a back-up plan (whether it’s Alertpay, Liberty Reserve, or something else)!

    swiitpea

  12. Sandor /

    I would consider 2Checkout, as an IM merchant. I never have herad about any nightmare stories from 2Checkout, and, what is very convenient for our buyers: at 2Checkout the buyers can pay through Paypal too, but we are not in risk, because our money land in 2Checkout.

    It has higher fees, but lower risk, and you don”t loose your Paypal buyers.

    What do You think?

  13. Aaron /

    Hi Sandor

    I have personally used 2Checkout.com now for many years. They have proven reliable and I recommend them to my readers. You are correct that they offer the ability to accept Paypal so this is great for those who don’t have direct access to Paypal but want to offer it as an option. There are a few limitations with them (e.g. you can’t just “send” money to someone, the vendor needs to setup a payment button or send an invoice etc) but overall they are excellent.

    Aaron

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