This is a bitter experience I had with Paypal recently that I want to share with you. I’m a freelance web developer and I get my payments from clients mostly through Paypal and I was using Paypal to pay for stuff I buy online until recently my credit card stopped working with them. I mean I have my card added to my paypal account and was working fine until it started saying that Paypal did not authorize the transaction everytime I try to buy something from a store that uses Paypal. Meanwhile when I try using my card directly with the seller, It just goes through fine. So I email paypal support and two days later I get back a reply from them that they checked my account and when I tried to pay, the payment got refused by the issuing bank. They asked me to check with this:

Check your credit card balance to ensure that it is sufficient to fund the payment. Your request may be denied if the balance on your card is insufficient to cover the amount of the payment.

Make sure you have not exceeded your credit card monthly limit that has been set by your issuing bank.

Attempt to send your payment at another time. It is possible that the issuing bank could be temporarily unavailable to answer the authorization request sent by PayPal. If an authorization response from the issuing bank is delayed, the request will not be processed and the status of the payment attempt changes to a decline on your PayPal account. In this case, we ask that you contact your issuing bank and request to speak with someone who works with online transactions for more information regarding the denial.

I reply back that I’m able to use the card without Paypal in the middle, so there is nothing wrong with the card but its something to do with Paypal. This time I get a detailed email from them starting off with that I have a good account standing and I have a verified Paypal account, so I may send “any amount” that my card limit would allow and the recent transaction that I was trying to make was stopped by Paypal’s “internal security program”. He then goes on trying to explain about the security model that Paypal has on their website which prevents unauthorized transactions and that when it finds something fishy, they would limit the funding source. They went ahead saying sorry that they cant disclose how their security system works. [D'uh who asked ? ] The agent then goes ahead telling me to use another card or “use other payment method” outside Paypal. Great !

Well, its clear that its a problem at Paypal’s side and they are helpless about it that they want me to use another service. Now, I’m just trying to pay around $10 – $15 here and Paypal wont allow me to do that with my card ? What about their ads to allow people to hide their credit card information from sellers ? Now I’m quite sure that I can’t pay using my card with Paypal while I buy stuff online which means my Paypal account is just to get paid – where they get some real money as fees.

This post was inspired by a real horror story shared at this Apparent Software blog post. Read the comments to know what other people have had to suffer while Paypal plays monopoly. It clearly proves that Paypal’s support sucks big time. Furthermore, I’m gonna be completely avoiding Paypal and go with bank transfers which I have found to be much more efficient way to get paid and avoid the huge fees that paypal takes while getting paid or while transferring amounts to your bank. If you are a freelancer, I suggest you avoid Paypal too and I have found that direct bank transfers can save you around 8% of the amount and is much cleaner if your client has no issues in doing so.