Starting A Movement to Replace Paypal

I'm not sure where to put this thread, but though the business section made the most sense.

Is anyone else sick of Paypal taking 3% of every transaction or being forced to use the "gift" feature and risk getting screwed over? I buy and sell a lot in the marketplace portion of this forum, and when the items are in the thousands of dollars, 3% really adds up quickly.

Well I think this is ridiculous, which prompted me to make this thread. I am from Iowa and we have a local start-up company called Dwolla. They are very similar to paypal, but only charge a flat $.25 fee per transaction and any transaction under $10 is free. Yes, that's right 25 CENTS per transaction. They still offer buyer protection much like paypal, but they don't rake you over the coals like paypal does.

The problem is nobody has a Dwolla account and everyone uses paypal. Well, how about we start saving each other a ton of money and make the jump to Dwolla? Once you make the switch, I promise you won't go back.

And before you ask, I have no affiliation with Dwolla. I don't have a dog in this fight other than wanting to avoid a 3% transaction fee every time I buy or sell a $1,500 lens.

www.dwolla.com

As someone who's got a merchant account with a local bank, 3% transaction fee is actually not that bad. What I actually dislike about paypal is their "service" or lack thereof. That in itself has resulted in quite a few paypal alternatives like dwolla.

To me, what makes paypal standout is how deeply they are integrated with popular online businesses. So, sure, people like you and me can switch to one of these alternatives and use them but until dwolla is integrated with a ton of online vendors, I'd think the adoption would be pretty slow.

On a separate note, I've sold and bought my share of lenses. I have never and would never use online pay services to sell items over $500 or so. Not just because of the potential fees but the risks of online transactions outweigh the benefits.

Kyle, I would love to use "Dwolla". Unfortunately, I don't see it as a payment option when I buy something from an online retailer. What good is it if no one I buy things from will accept it?

I can only hope that if "Dwolla" ever gets as big as PayPal, that they would never, ever raise their fees. Ever. For any one. In any circumstance. Unfortunately, if "Dwolla" were to ever gain an enormous share of the market, and become every bit PayPal's equal, I suspect that the 25 cent fee would soon escalate to 40 cents . . . then 50 cents . . . then, "just 1.25% of each transaction" - and soon they'd be no better than the Greed King, PayPal itself. This seems to happen in every business, once a company grows to significant proportions. The owners/founders of the company are no longer satisfied earning $20k to $35k a year, like everyone else. They want to be "better off" and pay themselves triple figure salaries - that's when they screw us hard.

If Dwolla ever does gain worldwide acceptance with every single online retailer, I really hope they would never, ever raise their fees even a little bit . . . but of that I am very, very doubtful.

Kylemorgan88 wrote in post #15541753
I'm not sure where to put this thread, but though the business section made the most sense.

Is anyone else sick of Paypal taking 3% of every transaction or being forced to use the "gift" feature and risk getting screwed over? I buy and sell a lot in the marketplace portion of this forum, and when the items are in the thousands of dollars, 3% really adds up quickly.

Well I think this is ridiculous, which prompted me to make this thread. I am from Iowa and we have a local start-up company called Dwolla. They are very similar to paypal, but only charge a flat $.25 fee per transaction and any transaction under $10 is free. Yes, that's right 25 CENTS per transaction. They still offer buyer protection much like paypal, but they don't rake you over the coals like paypal does.

The problem is nobody has a Dwolla account and everyone uses paypal. Well, how about we start saving each other a ton of money and make the jump to Dwolla? Once you make the switch, I promise you won't go back.

And before you ask, I have no affiliation with Dwolla. I don't have a dog in this fight other than wanting to avoid a 3% transaction fee every time I buy or sell a $1,500 lens.

www.dwolla.com

...from their terms of service:

https://www.dwolla.com​/tos

There is a reason why Paypal has such high market penetration and usage. For a company to truly challenge Paypal they have to dive into the murky realms of international financial institutions. They have to comply with laws in different countries. They have higher fees because they have higher overhead to deal with things like Dwolla don't have to. Scale Dwolla up to match what Paypal do and don't be surprised that they would have to adopt a similar fee structure.

There are services like Stripe that I would love to use but are currently US only. Google Checkout has mixed reviews. Paypal simply works. It costs money: but I do a very small volume of business with Paypal (mainly receiving international from Australian PCO's) and it is more cost effective to use them than it would be to set up my own merchant account.

banquetbear wrote in post #15542008
...from their terms of service:

https://www.dwolla.com​/tos

So basically Dwolla is just a bank-to-bank transfer facilitator? No wonder they only take a quarter. This type of transaction has been popular in Europe for years now. We United Statesians just don't seem keen on it for one reason or another.

First, if as a buyer you are asked to pay the 3% then the seller needs to either price his product low enough that this makes sense to you, or you can report him for ToS violation of Paypal, or you can only do business with people who build their expenses into their asking prices. to me, I think 3% is a fair trade for allowing anyone across the country access to me stuff for sale (couple hundred million potential customers) vs only selling locally and taking cash.

I don't mind the 3% fee, as it's comparable to any credit card; just the cost of doing business.

My beef with Paypal is the almost complete lack of seller protection. Everything protects the buyer, nothing protects the seller.

My wife still likes to use Paypal as an eBay seller and in our business. We haven't gotten burned yet but I'm sure they day is coming. We got very close when she sold a pair of shoes on eBay and the seller tried to claim they were not as described*, so we just had them send them back and we ate the shipping expense.

*they were exactly as described, with many high-res photos in the sales listing; I think it was just a case of buyer's remorse.

Bitcoins anyone?

I'm not a huge fan of paypal either, but it does allow me to sell to a global customer base without hassle. I'd say about 40% of transactions are foreign. I've never had any issues, but then again my transaction volume is not in the hundreds per month, so bad apple risk is reduced.

nathancarter wrote in post #15544348
My wife still likes to use Paypal as an eBay seller and in our business. We haven't gotten burned yet but I'm sure they day is coming. We got very close when she sold a pair of shoes on eBay and the seller tried to claim they were not as described*, so we just had them send them back and we ate the shipping expense.

I'll give you a tip on how to prevent you from eating the return shipping should this happen again.

When you wife lists an item at the bottom of the page is the Return Policy box, from there she can select either returns not accepted and there is a good chance the seller will eat the return shipping or she can select returns accepted and she will be presented with another drop down where she can select Return shipping will be paid by “buyer” and that is what e-bay or Pay-Pal will go by.

Wayne

Paypal is so expensive, because they have about 10,000 (exaggeration) attorneys to battle all of the complaints they receive...

They are only a slightly higher percentage than any other merchant account. I don't get what the fuss is about. Price your goods or service to absorb the 3%. If you have issues with that, offer a 3% cash discount. Major gasoline chains do it. It is common.

Next time you swipe that debit card at your favorite merchant, ask him what the bank charges him for each and every swipe.

nathancarter wrote in post #15544348
My beef with Paypal is the almost complete lack of seller protection. Everything protects the buyer, nothing protects the seller..

Amen, I have experienced that little issue personally...lost the product & the money even though I had a signed receipt....

I've had a merchant account before. I don't see how this is a viable business model. There is no getting around the exchange fees the Visa and MC network charge. This is a charge everyone pays. The % and transaction fees are negotiable items.

I'm not referring to replacing paypal for merchants, I'm talking about using an alternative for person-person transactions.

Many customers don't need the merchant services paypal provides. They just want a quick and easy way to electronically transfer funds with some limited buyer protection.

For simple transactions like those in the marketplace section of this forum, giving up 3% of the price is unnecessary. If people would start adopting an alternative for these types of person-person transactions, everyone would get to keep a whole lot more cash. The problem is nobody uses anything but Paypal. I'm hoping to change that.