Sandra Theres DonyA couple of business people have come forward, opening up their experiences with PayPal. It looks like PayPal hasn’t exactly been a “pal” to these businesses who suffered major blows because of the company’s rigid and stringent policies. Several companies even went broke after waiting for money. Read along to know more.
The Saga of Held-Up Funds
Michael Weinrub set up his internet services company, FastPings back in the year 2008. Integrating his company with PayPal was the natural or perhaps the only option because the remaining alternative of setting up a credit card terminal was less than appealing to the businessman. Taking in the demands of others, he set up PayPal. Soon after, the problems started.
Weinrub ramped up a new product offering for players which generated revenue worth $300,000 every month. Weinrub’s business model was structured in such a way that they had to pay the bills in order to host the service. Thanks to the new service, FastPings witnessed commendable growth. Just two months after this, PayPal cracked down.
Apparently, PayPal came to the rather arbitrary decision that FastPings was making way too much money, and in less than six months, the company’s funds were frozen. Despite Weinrub’s efforts to connect with PayPal and understand why the cash belonging to the company was locked up, he didn’t get much far. They repeated the same process for every new transaction which had a detrimental effect on the company’s growth, “They did it for every single transaction going forward.” For about nine months, no matter how big or small the payment, Fastping’s account would come down with an issue.
FastPings was required to provide evidence to show that the transaction had taken place. And for this, PayPal asked the company to provide a tracking number. However, the problem was that FastPings was delivering services and not goods. “We told them it was a service that was instantly delivered and doesn’t need a FedEx tracking number. They basically told us they were never going to unlock the funds.” The continuous cash freezes had an adverse effect on the business, almost taking it to the door of bankruptcy.
Weinrub kept quiet about his experience for over ten years. The reason why he is speaking up now is that he discovered that several other businesses were also going through a similar situation with PayPal. It looks like PayPal is following a pattern, which they better break soon lest they fall prey to the fury of businesses that went plain broke due to its stringent policies.