Freelance Switch posted an article titled “Freelancers Beware of Receiving Payments via Credit Card through PayPal” a few days ago that still has me shaking in my boots!The article details a terrible experience that Cara Williams had with a very bad client and PayPal.
PayPal often boasts about it’s strong buyer protection. But what about sellers? Sellers – especially sellers of services and other non-tangible goods – are least protected of them all.
Question is… what’s the alternative? There seem to be drawbacks to just about every payment out there (chargebacks to PayPal payments, chargebacks to credit card purchases made through other merchant accounts, bounced checks, etc.)
There has been a massive outpouring of support and concern over the issue – go look at the growing comments! I’ve learned quite a bit from the comments to this article.
I personally use PayPal and good old fashioned checks for payments for my web design services. On one hand, PayPal is nice and quick, but they take away a percentage (as with any merchant account…) Checks are great because you get the entire amount for yourself – it just takes longer to arrive in the mail, and involves an extra trip to the bank, etc.
So, what should you do? Yes, PayPal is convenient, inexpensive, and everyone and their mother seem to already have an account. But, with such lack of protection for the seller (aka you and me) – we might actually be better off spending a little extra money on a “real” merchant account. Question is, of course – which is the best one? Who will stick up for us the seller against fraudulent chargebacks?
Go check out Cara’s Story – heck, I’d almost call it a nightmare! Lots of great conversation over the issue on Freelance Switch. I’d love to hear your thoughts or suggestions, whether it’s over here, or at the original article.
Edit: Freelance Switch has since posted a follow up article, with some alternatives to paypal. You can read that article here: