PayPal responds to clients' anger

PayPal continues to irk those in the web design industry, but the payment giant insists change is on the way. The latest anti-PayPal rumble arrived off the back of the company blocking access to the account designer and author Elliot Jay Stocks used for 8 Faces, and an account owned by Andy McMillan of The Manual.

Stocks ranted online last week about the service, railing against "numerous horror stories about what happens when PayPal's staff blindly follow their draconian rules without applying common sense". Stocks had suffered multiple account freezes owing to payment spikes PayPal had been pre-warned about, and was baffled by demands for postal delivery receipts for PDFs as a means to unlock the account. Prior to the latest freeze, Stocks had transferred his balance to a bank account; McMillan wasn't so lucky.

Turning the corner

Although PayPal has in the past remained relatively tight-lipped about regular issues regarding accounts used for web conferences and publications, PayPal President David Marcus directly responded to McMillan and said he was going to use the story "to radically change how we deal with holds, and communicate with our customers". Stocks and McMillan subsequently found their accounts unlocked. (McMillan's full report is on Storify.)

.net spoke to Rob Skinner, Head of PR at PayPal UK, about this latest round of problems, and what PayPal aims to do in the future. We first asked about PayPal's seeming inability to deal with accounts that spike, even when the accounts have been running for years without incident, and PayPal's tendency to place restrictions on accounts that amount to an entire cycle's earnings, forcing the owners to cancel projects due to a lack of cashflow.

Skinner provided a now familiar line about aiming to "strike a balance between the interests of buyers and sellers", and stated that ticket sales often happen long before an event that may be cancelled, leaving buyers out of pocket. He reiterated what we've heard in the past, that PayPal tries to "work closely with organisers to ensure that wherever possible funds are released to fund an event before it happens" (something many conference organisers that .net's spoken to contest), and that "many factors are taken into account when deciding to place a reserve or a hold on an account".

However, in a possible shift in policy, and echoing Marcus's words, Skinner said: "We appreciate that this can inconvenience sellers. We know we don't get it right all the time and are planning major changes to the way we handle these cases over the coming months, which will help event organisers and other businesses." He added that Stocks's problem regarding postal delivery receipts for PDFs was down to human error: "Our policy doesn't require sellers to provide postal receipts for digital goods. We're sorry if any of our sellers have been wrongly asked for this – perhaps because a PayPal agent mistook the transaction for one involving a physical magazine."

The next step

Moving on, Skinner claimed that although web conferences and publications seem to get regularly hit by PayPal problems, "thousands of events and publications in the UK use PayPal every year, and the vast majority of our 15 million UK customers find that their payments are processed smoothly". Nonetheless, Skinner added, there was "always room for improvement", and he went on to say that the company would be "putting in place teams of specialists to deal with these issues in the near future". He said he thought there would always be risk in business models requiring due diligence and risk mitigation, but hoped that by "working more closely with our sellers we can manage these risks and make life easier for our customers".

McMillan appeared cautiously optimistic PayPal could change. "There's a lot of work to be done to gain back trust in the service, but if the concern turns out to be genuine, and David's offer of having me provide input into actually changing their policies and systems in order to make PayPal less of a colossal nightmare to use, it's an offer I'd gratefully accept," he said, adding that he's nonetheless "taking everything with a pinch of salt" for now.

Stocks, however, told .net that although he was grateful for PayPal contacting him and lifting restrictions on his account, it was "too little too late". He also expressed concern over whether PayPal was just responding to people who have a lot of influence online: "What about those people who don't happen to have the audience I'm lucky enough to speak to? And does it really take such negative PR for the company to sit up and take notice?"

For Stocks, the core problem with PayPal remains the manner in which the company doesn't actually appear to work with its customers, instigating account freezes and closures before investigating a situation and "following automated procedures in order to 'resolve' issues that often have no bearing on the situation at hand, like asking for postal receipts for the delivery of PDF magazines". He said it too often feels like little common sense is applied, and this sows the seeds of distrust amongst web folk. "PayPal obviously needs to protect itself from fraud, but more attention needs to be paid to individual cases and more care should be given to sellers – the very people who make the company money. I certainly won't be using PayPal again."

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