Wednesday, 23 January 2013

PayPal: 'Aggressive changes' to relax frozen funds policy.


I am sure most of you are familiar with the name PayPal - an online payment processor owned by Ebay. It is a convenient service since you only need to log in and click a few buttons to pay, and it works on mobile platform as well. As a consumer we love it, but there are mixed reviews from retailers. 

There are a variety of reasons that can result in negative attitude towards the company, but the most common one has to do with 'frozen funds'. Of course, when the problem involves money, people can go a bit crazy. PayPal's fraud filters have frustrated customers for years, since the process of proving you are no scam can involve a lot of paperwork and time. The typical routine freezes your fund for 21 days if fraud risk is suspected, not to mention that PayPal has the right to extend the freeze to up to 180 days. You will then have to provide the requested documentations (for example months of sales record) for investigation. This means people's money can be held for quite a while, which can directly make an impact onto their businesses. 

'Aggressive changes' were the words used by Anuj Nayar, the senior director of communications in PayPal, to describe their next action. Promises have been made to improve this fraud filter system within the next several months. However, details are still insufficient at the moment. PayPal states that transparency will be the key and that they want to ‘be clear about how people can get out of the situation’.

Despite losing some customers over this problem, PayPal is still the giant in online payment industry. What are your thoughts? Is it too late for the company to change? Will you still use their services for your online businesses? 

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