PayPal - what's the deal?

Like many others, I bought something four years ago using PayPal.

Now I want to set up the account to be able to charge users for the software.
When I enter PayPal I can either upgrade the current account or create a new account.

What shall I do!?
As you might have noticed, I’m not currently an active PayPal user… however, I plan to become one! :slight_smile:

[quote=140635:@Jakob Krabbe]Like many others, I bought something four years ago using PayPal.

Now I want to set up the account to be able to charge users for the software.
When I enter PayPal I can either upgrade the current account or create a new account.

What shall I do!?
As you might have noticed, I’m not currently an active PayPal user… however, I plan to become one! :-)[/quote]

You may want to keep a private account for your own purchases, and set up a new business account that will be dedicated to business. That is the way I have done it, about ten years ago. Paypal has been the most reliable partner in all these years :slight_smile:

I’m not sure what account level you have, but you must have at least a Merchant level account to use the seller tools.
That may be why they’re asking you to upgrade your account.

I thought that PayPal did not allow the sale of non-tangible goods such as software and ridiculous items such as air guitars. The chargeback rate on software is pretty huge, so look out.

Have been selling software by download with Paypal since 2005.

For small ticket items ($20-$40) the chargeback rate is less than 1%.

For larger ticket items, or some niche items such as MICR fonts, the chargeback rate is higher, around 2-3%.

[quote=140646:@Tim Parnell]I’m not sure what account level you have, but you must have at least a Merchant level account to use the seller tools.
That may be why they’re asking you to upgrade your account.[/quote]

Actually, it depends on what features are used. Any account can set up buttons and simple transactions with IPN, but Virtual Terminal or API use require a Merchant Account. It is possible the personal account has withdrawals or charge limits as well.

[quote=140656:@Michel Bujardet]Have been selling software by download with Paypal since 2005.

[/quote]
If somebody decides they want your software for free and opens a dispute, how do you prove that they actually received a full and complete download? How do you prove that your software works as described ?

I too sell software and get paid via Paypal…
Its easy to prove… the website I set up is only accessible via the application they downloaded… so they have no grounds for dispute. By virtue of the fact they downloaded my app, and used the website to purchase it means that they have tested it their satistfaction…

Unlike the Apple App Store… where you must buy before you try…

[quote=140677:@Dave S]I too sell software and get paid via Paypal…
Its easy to prove… the website I set up is only accessible via the application they downloaded… so they have no grounds for dispute. By virtue of the fact they downloaded my app, and used the website to purchase it means that they have tested it their satistfaction…

Unlike the Apple App Store… where you must buy before you try…[/quote]

Well to be fair, you can release free with an in app payment to unlock all the features.

I sell via PayPal as well - both hardware and software. Digital goods is considered a higher risk business by PayPal. Trust me, I ran afoul of them quite innocently a few years ago and had my account locked out and basically suspended. And the interesting part is they made up their minds that my activity was fraudulent before I even had a chance to submit all their requested paperwork. One part of their site they asked me to go to would never load! And what was even worse was that part of what they wanted was a valid driver’s license. I gave them that except in my state in order to save costs when your license expires they give you a sticker that you put on the back that extends it. That wasn’t good enough. I did not have a valid license for them even though I sent them information from my state detailing what they do. They had about $3000 of my money locked up for 6 months before I could get it back. I had no idea what or why it happened until months later…

Fortunately, one of my close business partners runs a site that does some of the highest PayPal volume. He got me in touch with his account manager and he vouched for me. I talked to the account manager and he immediately sent me over to a security person. I was talking to this guy about getting my account re-instated and I told him what I think I did that set off their alarms and that it was a mistake and I’d never do it again. He never officially confirmed that I was right be he said thank you, don’t do it again and re-enabled my account.

I won’t go into full details in public (private message me if you want the full details) but the bottom line is don’t let someone else use your computer to make a PayPal transaction purchasing product from you.

Stay in the good graces of PayPal and you’ll be fine. They take suspected fraud very seriously and lock it out quickly. And if it does happen, keep your patience when dealing with them (I lost mine at first). And be persistent. They expect a crook to give up and not be persistent and patient with the process.

The not received dispute is simply not eligible for refund. So spandrels who systematically claim they have not received the software cannot claim that. Besides, in the dispute process, they have to write in the dispute center, and when that happens because their shit filters discarded the emailed download instructions, I simply copy that to their attention and they are happy.

I never had in all these years such a dispute go anywhere. Key is, I guess, to respond immediately. Customers genuinely get ansy when they have paid and see nothing. When they see there is support, it reassures them.

The only case where soft goods are a difficulty of that nature is in case of chargeback, as indeed there is no tracking possible for download.

But even providing a tracking record when the card has been cloned overseas is absolutely no certainty the chargeback will not go through.

[quote=140662:@chris benton]If somebody decides they want your software for free and opens a dispute, how do you prove that they actually received a full and complete download? How do you prove that your software works as described ?

[/quote]

I generally reply to the dispute with a serial number and direct link to download the program (posted in the paypal dispute response). Haven’t lost a dispute yet in 15 years. I have refunded a handful of sales because the buyer thought an app could do something it can’t.

[quote]@chris benton If somebody decides they want your software for free and opens a dispute, how do you prove that they actually received a full and complete download? How do you prove that your software works as described ?
The not received dispute is simply not eligible for refund. So spandrels who systematically claim they have not received the software cannot claim that. Besides, in the dispute process, they have to write in the dispute center, and when that happens because their !@#$% filters discarded the emailed download instructions, I simply copy that to their attention and they are happy.

I never had in all these years such a dispute go anywhere. Key is, I guess, to respond immediately. Customers genuinely get ansy when they have paid and see nothing. When they see there is support, it reassures them.
[/quote]

I can report a different story.
While ‘not received’ can be easily disproved for my software (customer has to register to use it), Paypal seems to take the customer side and refund anyway.
Its only happened to me 4 times in 15 years, though.

I have a ‘dial home’ serial number: if someone does want a refund (maybe 1 a year) or paypal does it for me, I can nuke the software remotely.

This is a nice feature. I cannot do it for fonts, but I tend to regard refunds as part of the necessary business friction factor. As long as it does not exceed a certain percentage, it is OK.

I am fairly easy with customers who want a refund, anyway. As the US culture go, customers would not understand not being able to get a refund, and it could get real ugly. I rather refund to keep my peace of mind.

The nice thing with electronic software delivery is that unlike hard goods such as disks, refunding does not cost a penny. At least with Paypal, it’s a zero sum operation. With previous merchant services, I would still pay the charges.

Thank you for the input.
I never buy or sell items as a private person. Only as a company…
My software differ from most software in such sense, the software itself is free and will always be. The charge is to post user-specific information on the website…

I can not see refund as a frequent headache because … the users shall all know what it’s all about before purchasing.
Also, I don’t aim at the American market, not to start with. (However, eventually, yes I will.)

I don’t think these posts made me much wiser… but at least, I now know of your experience and in some way it can also be a useful knowledge!

[quote=140833:@Jakob Krabbe]Thank you for the input.
I never buy or sell items as a private person. Only as a company…
My software differ from most software in such sense, the software itself is free and will always be. The charge is to post user-specific information on the website…

I can not see refund as a frequent headache because … the users shall all know what it’s all about before purchasing.
Also, I don’t aim at the American market, not to start with. (However, eventually, yes I will.)

I don’t think these posts made me much wiser… but at least, I now know of your experience and in some way it can also be a useful knowledge![/quote]

One of the things that makes Paypal particularly attractive is that it requires almost zero paperwork. Banks on the other hand have a knack to make things complicated.

Also, it is extremely easy to implement.

that’s a nice feature, but what happens if you or your company goes out of business
the customer still must be able to use the software he bought even if no one answers from “home” ?

Michael, I shall look around how things works in Sweden… When it comes to the bank.
Thank you for pointing that out!

I worry little for the implementation! Well. There is only ONE way to see find out if it works…!! Ha! :slight_smile:

In Europe, it may be a good selling point to have a national bank. I do not know much about Sweden, but in France, some people like better going through French banks to pay online. 3D Secure is generalized, and people seem to appreciate that a lot.
https://en.wikipedia.org/wiki/3-D_Secure
Any transaction has to be confirmed through SMS, which is bullet proof against cloning.

For whatever reason, Paypal which is established in Luxembourg does not implement it.

I think the term you were looking for is ‘Tax shelter’