How PayPal prevents merchants from accessing funds based on often mysterious fraud policies has long been a topic of PayPal user message boards. This problem now is more in the spotlight has merchants have more options outside of PayPal to accept payments.
From Yahoo:
PayPal says such account holds affect a small percentage of users and are needed to protect the company from big losses. But complaints have increased this year and some users are considering other ways to accept payments.
A plethora of rival payments start-ups, including Square, Stripe, Braintree and WePay, provide more options for PayPal users now, putting pressure on the company to change.
The issue has been bubbling up to the surface with a great deal more frequency as of late and the company is well-advised to put a friendlier face on their product with new servicers offering free acceptance services as the competition is growing fierce in the traditional PayPal merchant segment of SME and micro-busineses.
But the changes should improve customer service and increase revenue growth by encouraging more merchants to use PayPal, he added.
“Even if there’s a little higher loss rate, the incremental revenue from this will fall to the bottom line pretty quickly,” Luria said. A typical loss rate for online transactions is 1 percent or more, he noted.
Click here to read more from Yahoo.