Risks of Accepting Credit Card Payments via PayPal

[jimbo_dk]

I read the following post at Freelanceswitch:
Freelancers Beware of Receiving Payments via Credit Card through PayPal

Good eye opener for me. Has anyone has this type of experience before? Makes me think twice before accepting foreign work now.

[Dan Grossman]

This is no different than accepting credit cards with your own merchant account or any other processor. Anyone can do a chargeback. If the bank sides with the payer despite whatever evidence you show, you lose. The entire payment processing industry is still living in the bricks-and-mortar retail age and the burden of all that entails sits on the payment recipients.

If the person that wrote that blog entry got a claim through PayPal, and the buyer didn't also file a chargeback through their bank on the credit card charge, then the seller would have won. All he'd have to do is respond to PayPal that the sale was a service/intangible and the claim would be closed as the buyer protection policy doesn't cover quality of service.

I've gone through that process many times. Just take a look at the last entry in my blog where I talk about the 170+ transaction holds I handled through PayPal in 2007. For the record, I've also won credit card chargeback rebuttals through PayPal on services. They do request and present to the card issuing bank any evidence you can provide to fight it.

[jimbo_dk]

I was wanting to see what happened with your switch to Paypal. Will read through your full post when I get time this evening.