PayPal, margin pressure and the small business perspective

A few days ago, I received an email from PayPal informing me that some of their terms and conditions of service had changed – ostensibly to ‘ensure high standards of service continue to be maintained’. I read that immediately as a greedy grab: turns out I was right. Buried in the fine print of the changes were a bunch of rate amendments, effective 10 Sep 2013, that now make the cost of receiving payments in my part of the world anywhere up to 6% plus a fixed fee (for commercial payments that fall into the “International micro payments for digital goods” category, which includes my videos). On top of this, there’s a ‘micropayment fixed fee’ of MYR2.00 (US$0.65). And then there’s a 4% currency conversion fee to Malaysian Ringgit on conversion. And a further 2.5% added to the exchange rate when you withdraw the funds to your bank account. Very cunningly, they don’t provide a like-for-like fee comparison, either. That’s a grand total of anywhere up to 12.5% PLUS RM2.00. Previously, I calculated the net cost of using PayPal at about 5% inclusive of FX; a merchant credit card terminal would be around 3%. Given the long payment times for credit card providers and relative discomfort of people using cards overseas, I elected to stay with PayPal for the time being – lousy service and lack of regulation notwithstanding. See why this has now become a problem?

My underlying costs have increased by 7%; on top of that, there’s a lot of seemingly arbitrary discrimination going on between countries for a supposedly international payment service – the fixed fee is US$0.30 in the US, but US$0.65 in Malaysia. What gives? 2.5% to the FX spread? That’s even worse than the worst of the bank counters here; typical money changer spreads are closer to 1% here. And they have nowhere near the volume PayPal does. To make things worse, PayPal is not a regulated financial institution. They can do as they please with your funds; and they frequently do: random freezes and no end of documentation required to un-freeze. In the meantime, they enjoy overnight placement rates on your balances. Bottom line: this company is a bunch of crooks that’s effectively going to cause a lot of small businesses to die, with a negative impact to themselves in the long run.

Don’t get me wrong. I appreciate that there should be some difference in price given the convenience and speed of PayPal over credit card providers; I don’t think it justifies 9-10% of the retail price of the product. I can make allowances for a bit more if the quality of service is good, but it isn’t – some of you will remember my woes trying to use the service during a trip to Myanmar – frozen accounts for not just outgoing but also incoming payments; that landed up costing me quite a bit in the end due to rejected payments and lost sales. Needless to say, there was no compensation offered or forthcoming; not even so much as an apology. Just a thinly-veiled ‘f*** you, if you don’t like it, go somewhere else – except there isn’t anywhere else’ couched in consultant-tainted marketing speak.

If you’re getting the impression that there’s a lot of vitriol here, you’d be right. I find the notion of a company that’s made its success of small businesses trying to kill them by increasing margin pressure very hypocritical and short sighted, to say the least. I’m troubled, for two reasons: firstly, because after investigating the possible alternatives, I’ve simply been unable to find any: either the alternatives have very slow payouts and perceived trust/ security issues due to my location (merchant credit card account), or they don’t pay out money to a bank account in Malaysia. It’s pretty much useless for me to go with a service provider where the money has to be left with them – not only do I not see the benefit of it, I might as well be giving away free interest, too. Perhaps I should seriously think about starting an alternative service – I think the important point is that it has to be a cooperative institution owned by the depositors – similar to a shareholder structure – rather than a corporate black hole. This would ensure that fees are kept reasonable and management decisions are made in favour of the users. Perhaps the business model could be along the lines of a fixed fee per transaction with stepped rates proportional to the number of transactions you do, rather than a fixed percentage of the transaction value – this would be far more in keeping with how the actual underlying costs work. FX would be at the prevailing market rate. The primary challenges would be licensing and regulatory oversight, and to get the huge installed user base to move over, but given the recent changes to PayPal’s fee structure, I think that might be less of a problem than it first appears.

This brings me to the second point of this article-rant: the general consumer and business environment is making it tougher and tougher for small businesses to survive; photographers fall squarely into this category. Of late, I’ve noticed clients increasingly trying it on with ridiculous budgets/ offers – knowing full well what my rates and costs are because we’ve worked together on many occasion previously – and then making noise when I decline to drop prices. They might also pay late: hideously so, in some cases. I was engaged to give a workshop seminar by Sony earlier in the year; it took five months to get payment. These are the kinds of clients I can do without. On the other end, our underlying costs are increasing – base costs such as rent, food, fuel etc. go up because of inflation; travel isn’t any cheaper; gear seems to get more and more expensive, too – with minimal incremental improvement. And then there’s the new cost of receiving payments…

Compounding things is the recent slide of the Ringgit: 10% devaluation in a matter of weeks is starting to look pretty catastrophic (and our government claims inflation is just 3% per year). We are being margin squeezed on every side: unable to increase prices due to stingy clients; but costs are rising alarmingly due to a deflating currency. To be honest, I don’t even know whether to take payments via wire transfer and lock in the exchange rate now, or hold foreign currency balances at the mercy of PayPal – either way seems like it’s going to be equally painful.

To maintain the same level of absolute returns we have to do more work, but there comes a point when you are fully utilised and costs have seemingly no ceiling. I think there are only a couple of solutions, really: either offer a product or service that is unique and not easily replaceable, for which demand is greater than supply and you can set prices at the level you see fit; or alternatively, change the business model to offering something that can survive and scale with smaller margins. The latter is nigh on impossible to do for photography: we are providing a product that is highly labor intensive and very customized. Unfortunately, most clients perceive the output as being commoditized, expect commensurate pricing, and make unhappy noises when things don’t match. I think this is still an education problem, but fixing a long-standing mindset is something that takes time and effort.

In all seriousness, if there are any bankers or other people more familiar with the payments industry, I’d love to get in touch and explore some ideas. In the meantime, if there are PayPal alternatives that you know of which a) are cheaper b) are fully functional for a business based in Malaysia, please also get in touch or leave a comment. So far, there haven’t been any: this is bad news, because it’s carte blanche for the incumbent monopoly to charge whatever it wants. I will need to evaluate what the net revenue change is to my end after a month or so; if it’s significant and there are no alternatives, I will be forced to increase prices accordingly. For large amounts such as workshops and the Email School, I’m going to switch to wire transfer only; this follows the fixed-fee model and makes sense above a certain threshold. Giving PayPal 10% of my revenue over the wire transfer fee for adding no value whatsoever makes no sense – and I certainly don’t want to increase prices by 10% if I can help it. MT


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  1. plevyadophy says:


    I discovered this scam for the first time last week when I was hit by it. It appears to be some new rule change, to, in my cynical view, enable PayPal to use our money to play the money markets to accrue more revenue before handing over to us what is rightfully ours from the moment the sale is made. Disgusting!!!

    Here’s the spurious reasoning they give for this new method of extracting money out of users:

    • I’m not surprised, personally. How long do they hold for?

      • plevyadophy says:

        Up to f** 21 days (according to the new T & Cs)!!!!

        I have just been notified that today’s sale i made will result in my money being held for 8 days (and if I sell more and be a good boy, the inconvenience of having my funds held is stopped).

        • Holy cow. That’s news to me. Did they at least specify under what conditions funds aren’t stopped so we can avoid that? Is it ebay only? If so, I suspect it might be for returns/ insurance/ refunds. I haven’t noticed any delays in store payments on my end.

          • plevyadophy says:

            Yes, they tell ya by inference. So they tell ya why you money will be stopped and then it’s clear when you money won’t be.

            Like you alluded to, this is an eBay transaction thing; but eBay own PayPal so it’s still PayPal who are shafting us (eBay sellers).

            You are also correct in your suspicion as to why (they claim to need/say) these restrictions are in place (returns, refunds etc).

  2. If the problem is getting money into a Malaysian bank account or Malaysian Paypal charges, then surely the solution is to find a US/Euro/Offshore bank account that you can set up all your micropayments to go to, then simply use internet banking to wire transfer the funds to your Malaysian bank once a week/fortnight/month? Because you own both bank accounts, once set up it should be easy? I suggest setting up an offshore account somewhere like Guernsey simply because they’re used to dealing in all sorts of currencies.

    • You can’t open a US bank account without an address there; I tried. Euro doesn’t help either as you’ll still be hit by FX fees from PP.

  3. also, to cover the american market, xoom may work for you. cursory research suggested they currently don’t cover malaysia, but do work with some phillipino banks, which i’d assume are represented in KL.
    probably a long shot, but seems like anything is worth checking/trying in this landscape.
    good luck.

  4. Ming, take a look at Wirecard (

    Wirecard – Your trusted source for payments in AsiaWirecard – Your trusted source for payments in Asia
    Wirecard Asia provides regional and international merchants with a wide variety of payment processing and fraud management solutions. Catering to the specific needs of regional merchants across a broad spectrum of industries, we are connected to more than 50 financial institutions and local payment schemes in Asia.

    Headquartered in Singapore, Wirecard Asia also operates an office in Malaysia, providing local customer service and sales support. Our regional team consists of experienced industry sector specialists and is committed to helping merchants realize opportunities for growth in Asia’s dynamic business environment.

  5. I’m quite surprised by all this negativity towards Ebay and Paypal. More than just venting frustration, people need to vote with their wallets.

    I’m thankful for Ebay and Paypal. There’s a price (and business) in providing access to the markets that these services provide. It’s not arbitrary that Ebay/Paypal has set that premium to be 10%, 15%, it’s what they currently deem as commercially optimal. If local classifieds and meeting people to exchange cash was more attractive, I’m sure Paypal will offer more competitive fees.

    Ebay/Paypal are maximizing their profits as they should. They have an obligation to their shareholders to do so. If lowering fees secures more profits, they should do so. If giving to charity secures more profit, they should do so. They are a commercial entity in the business of making money. Why is this difficult to accept?

    • Read carefully: it’s not the absolute fees we are unhappy with – though they are high, but I do agree they provide a service that doesn’t exist elsewhere for the moment – it’s the lack of customer service, arbitrary account freezes, and general fiduciary irresponsibility of what is effectively a bank. There are things which they can do, but refuse to out of greed: they will not transfer USD from a USD PayPal account to a USD local bank account, unless that bank is in the US. This is just so they can charge an additional 4.5% for FX fees. They are nearly impossible to reach on the phone, or require hours of waiting. They freeze accounts at random and require you to jump through hoops to unlock your money, all whilst customers are unable to buy things from you. I wouldn’t mind so much if they actually did what they promised!

      There are no alternatives because the regulatory and financial barriers to entry are enormous. If I had a few hundred million lying about, it’d be a golden business opportunity. But hey, I take pictures for a living; that’s not going to happen anytime soon. I’m just happy to be above the poverty line…

  6. I have limited experience of credit cards… the system differs a bit from country to country, but simplifying heavily small companies can’t deal directly with the major card companies, so they basically need a partner who does the payment processing and actual handling of card and payment details. Now what that costs depends heavily on the region and what your business is and the reputation is based on not only you but also who you have downstream handling the payments. Still, with reasonable volume it’s a workable system, though I suspect that the fact that you are in Malaysia might (again) make this more expensive than in the average western country.

    As for whether people would have enough trust to use a credit card instead of PayPal or not is hard to say, but somebody would probably feel jittery. However, having a credit card or PayPal account is already a risk…

    • I don’t have enough volume to qualify for the lower fee processing tiers, and the intermediate merchants make it unattractive. And frankly, I find some of them a little dodgy – there’s no way I’d expect my customers to use them.

  7. Iskabibble says:

    Wow….Malaysia sounds like an absolute backwater. No film processing, no film availability, and now this demonstration of it being a total financial backwater. Beautiful country, I loved my visit there, but wow is it primitive there. Why not move to Singapore?

    • Singapore is a little…antiseptic.

      • Iskabibble says:

        Yes I found it that way too, but surely a more modern financial state, no? If you have to stay in that part of the world, it seems that to release your own potential you have to move somewhere that isnt so backwards.

        • To some extent, but the rest of the limitations really cancel out those advantages. Even if you can make 20% more, it’s pointless if the cost of living is 50% higher.

  8. Is there a branch of Citibank in Malaysia? Try looking into “inter-branch online deposits” as payments. Charges if any maybe minimal? Or Maybe you can look into doing or a credit card merchant agreement with the bank?

    I saw some time ago a site that accepts payments powered by “Ecwid”

    • Yes, but within Malaysia they’re pretty useless – very few branches and ATMs. Merchant CC terminal is out because I’d have to change the way my business is structured to qualify, which would result in significantly higher taxes.

  9. Guillaume says:

    I understand how you feel with Paypal. I use it for my business too.
    I like this service as long as everything is fine. I mean that you are true when Paypal can freeze your account anytime for idiotic reasons, risking to kill your business if you don’t have enough cash flow at the moment.

    In the case of the production of a service like you, it could be fine for a while, but in the case of paying suppliers, preparing orders and shipping them, the lack of cash flow in a short term period is a real business killer.

    I am from France but my customers are in Europe and my office and I are located in South Korea.
    Indeed, I am very surprised how few international payments methods are available today to make me to provide a good and easy payment process to my european customers while being located in asia.
    Only Paypal seems powerful enough to provide reliable and secured international payments and that is a real shame in a world where everything is connected more and more and where all barriers are supposed to be falling one by one to make business easier. It’s like nobody thought about international payments yet !

    I have also a french bank card system on my website, with a very friendly fee of only 0.7% of my turnover. That is amazing but the only problem is then the huge french government taxes I have to pay. All in All…it makes using french banking system even more expensive than Paypal…
    To summarize, let’s say that if I earn 10 000 USD a month, I will be let after taxes with 2500 USD. How is that possible ?

    Also, if I decide to use both I need to do dual accounting (One for everything I earn on french card system, and one for everything I earn from my Korean business Paypal account).

    Yep, that is true. We are just screwed anything we do. We are here to feed the bigger’s and it won’t change, sadly.

    Even if like today I am kind of forced to work with Paypal only, I think it is not a good idea to keep them as my only payment system.
    They can do everything they want with your money, freeze it, hold it, change their fees the next day…I think it’s not good to be subjected to your Payments Service.

    Like with suppliers I guess it’s wiser to have more than just one alternative and spread your money a bit everywhere. It makes things more complicated to manage but by the end of the day you are more secured too.

  10. I think you could leave us buyers the option to use credit card and/or paypal. I’m certainly ok using credit card overseas.

    • Doesn’t make sense for me to offer it. I would have to change the structure of my business to get a card terminal, which would in turn mean heavily increased taxes.

  11. Suggestion: Maybe for commercial projects you can break up payments into milestones. That’s how they usually do it in IT/Software development projects.

    • Commercial work isn’t the problem; if it’s local it’s billed in local currency, international currency comes in as a wire transfer. Thankfully only B&H pays commissions via Paypal; the rest are direct.

  12. This makes me sad too: “The sadder reality is that the racial discrimination I’ve experienced living everywhere else doesn’t really make me want to move, either.” Pick a big melting pot like LA?

    • plevyadophy says:

      If one is concerned about experiencing racism, the U.S. is one of the last places on God’s earth one should head for. Whilst a census check makes places like NY and LA look like a “melting pot”, closer scrutiny reveals a nation awash with racism not much changed from the days of segregation (sometimes the racism is a little more sophisticated but its there all the same). London, Birmingham (not Alabama!!), Manchester, Bristol, Oxford, and Amsterdam would be FAR better places to migrate to, and even they have their problems and Australia (some places) seems very welcoming to Asians.

      • The UK is just as bad, sadly. One of the reasons I left in 2005. The racism isn’t overt, but it’s there. Can’t speak for Australia as I haven’t been there in over 13 years now.

        • plevyadophy says:

          Now way!!! The UK is NOWHERE NEAR as madly racist as the US. I ain’t saying there ain’t racism in U.K. (see my fuller comments above re this issue) but it is nowhere near as aggressive, life threatening (US police violence, death row, toy cops who can shoot a skinny unarmed youth and get away with it etc) and institutionalized as it is in the US. With exceptions like Bradford and “one or two” pockets of resistance in London, the various ethnic groups don’t live in their own little areas. Go New York, or any other major US city, and you got the “black neighbourhood” the “hispanic neighbourhood” and so on; plain daft. So they walk into town, they mingle in town, which gives the VISUAL impression of a melting pot,but then they all go home to their separate “neighbourhoods”, plain nuts!!!

          Maybe if you come back to the UK, for a long enough time, I can show you around and point out the differences.

          • I lived and worked in London for five years. I felt it much more than in anywhere else…

            • plevyadophy says:

              I am really really surprised to hear that, really. :o(
              So where abouts in London were you and in what kind of environments?
              I would like to know, coz I am genuinely surprised by that (perhaps you encountered class snobbery (the English class system is very peculiar and not often understood by outsiders) which is also intertwined with questions of race; but then, if my memory serves me right, you are Oxbridge educated right? That should give you a massive lift up the pecking order here in the U.K. depending upon what social circles you move in. So I don’t get it. Very confused.
              (maybe we should take this conversation off-line (person to person email), as we are in danger of going off on a tangent not related to PayPal).

              Warmest regards,

              • Banking, finance and audit. Oxford made no difference; I was never admitted into those circles when I was there anyway – same problem of being an outsider…

                • plevyadophy says:

                  Ah, that explains it. In those circles, and in law, depending on what areas of law and finance you are moving in, yes, you will encounter the “colonialist rear guard”. It’s a damn pity that it has shaped your view of the U.K. but then again, if one has devoted a great deal of one’s life to pursue a particular career it’s understandable that one will want to stay in that field and that field will take up a great proportion of one’s life; so any bad vibes will weigh heavy. But let me tell you, it ain’t half as bad as it is in most of the rest of Europe e.g. a friend of mine in Portugal, a lawyer, turns up at a hotel and is immediately assumed to be a prostitute …. coz she is black (for the benefit of the naysayers, yeah, I know, I know, that’s just one incident but I put it out there as representative of the madness you encounter once you get out of certain cosmopolitan towns/countries. In my view, anyone sensitive to racism should give ALL of Europe a wide birth with the exception of England and the Netherlands (and yes, I would put Sweden in that exclusion zone too; for all their liberial ideals, deep down, and not very deep down either, there are “issues” there too),

  13. ming, i saw a billboard from “wepay” awhile ago. i heard it’s 3.5% fix for each transaction but not sure. you may want to check it out.

    • Not in Malaysia either…

      • OK I will say it. After reading many comments and your replies I do see one potential improvement: relocate yourself out of Malaysia.

        Doing so clearly would not solve the scaled-up problems mentioned but provided that you and your wife don’t have strong social ties that keep you there, nor overly-dependent on local customers and local employment — then doing so might just help you and your wife, individually.

        Sorry I haven’t learned enough about you to know in advance the reasons that such a suggestion won’t help. I suppose there are some but decided to mention it anyway.

        • Possible, and we did think about it, but the alternatives aren’t much better. And it would be difficult for her career, a pretty bit setback on mine, and create family issues. The sadder reality is that the racial discrimination I’ve experienced living everywhere else doesn’t really make me want to move, either.

          • plevyadophy says:

            If one is kinda comfortable where one is, it seems silly to up sticks and move to a new place only to be subjected to prejudice about something you can’t change (your ethnicity/race). However, on the other hand, staying put can lead to stagnation; the world needs movement of people to bring new ideas and rid us all of ignorance (travel is a good cure for ignorance). Staying put may just be playing into the hands of the racists. Whilst in the U.K. we have the intellectual wing of the racist parties (the conservative party) in power, and some of the racist parties increasing in popularity, the fact remains that the U.K. (in large urban areas at least) has over the decades become a more tolerant and enlightened place (our forthcoming Notting Hill Carnival epitomizes the multi-cultural togetherness one can find in London and in the major cities; but of course at the other end of the scale you have the institutionally racist London police force (“the Met)). The racism suffered now by some is nothing compared to that suffered by immigrants of my grand-parents’ generation.

            If you and your wife can really make a good life for yourself by moving elsewhere you really should go for it; think of the racists as minor irritants that one has to put up with to enjoy the good in life. There is no doubt that some places simply aren’t worth the aggro (e.g. eastern Germany, Poland, Russia) and often life threatening aggro, but places like London, Birmingham, Bristol, Manchester, Oxford, Amsterdam are certainly worth it if opportunity comes your way; yes in all of these places you will/may encounter racism but it will be nothing as aggressive as found in the other places I just mentioned and there is so much decency in these latter places that you will probably find that the racist idiots are a “tax” worth having to put up with. Oh, and I left out your part of the world; parts of Australia are pretty tolerant and welcoming to Asians.

            Just a thought.

            • Speaking of tax…that is one of the reasons I’m still here 🙂 40% marginal rate + higher costs of living definitely don’t equal a better life!

              • plevyadophy says:

                Now my friend, you have hit a VERY sore point with me!!!

                The fekkin taxes here are insane. The government taxes peeps to a ridiculous level. However, with a good accountant you can manage your affairs well enough to avoid the greedy grasping hands of the taxman.

                Yep, there are many irritating niggles to life in the U.K. and tax has gotta be one the biggest, if not THE biggest, irritant. But like I said, there are ways, especially for someone who is not a naturalised UK citizen (the so called “non-doms”) to avoid whole raft of taxes; you might care to look into it.

                • Sadly I don’t make enough to justify the cost of an accountant…but the taxes are a killer. One of the main reasons staying in Malaysia…

                  • plevyadophy says:

                    A U.K. accountant doesn’t cost as much as you may think. Take a look at say TaxAssist for example, their fees aren’t as extortionate as accountant fees can often be.

                    • I suppose it might be a good reason to get my textbooks out again…once upon a time I was an accountant/ auditor too. But I did take away enough to know that I was much better off in Malaysia tax-wise.

  14. Hi Ming … I’ve lost track of you (sorry) but am glad to see this. Will read in detail ASAP. I just sent the link to it to the PayPal corporate office, btw, and asked them to address your points.

  15. I hear you, Ming!
    I can tell you that as soon as an alternative to PayPal becomes available to accept on-line payments for our loupes in HK, I am jumping ship SOOO fast!!!
    Thousands frozen by PayPal for no apparent reason thus far… sigh…

    • You should have more options in HK though, it’s usually on the list of supported countries for the alternatives…Malaysia is just a corrupt third world backwater that has huge net outflows, not inflows…and you can be sure those don’t use PayPal. Sigh.

  16. Here in an organization that Gadget Infinity in Hong Kong uses for their transaction processing:

    I have purchased several items from Gadget Infinity using their system and works very smoothly.

  17. Hello Ming,

    I read through all of this earlier this morning and have been mulling it over since. I started searching for PayPal alternatives that are at least making an effort in the international space. If you have not already looked at Stripe, others have mentioned the service, they are at least making an effort.

    If nothing else, it might be worth dropping them a line and letting them know your needs and attention you are bringing to this issue. Within Stripe’s website, they mention Beta programs in other parts of Europe.

    Are you able to open an account at an international bank like Chase which has offices in Malaysia as well as other parts of the world where companies like Stripe and Square are currently doing business?

    Good Luck,


  18. Michael Matthews says:

    I tried looking into Google Wallet last week and found their website to be a confusing, circular maze.. A call to Google brought a phone rep’s promise of info by email with specifics on payments to Malaysia, but nothing ever materialized.

    There’s some question in my mind as to what Google Wallet even is. I can’t tell whether it handles charge card payment processing or simply wants to serve as a consolidated smartphone interface to facilitate the use of consumers’ own existing credit cards. The fact that they’re closing down Google Checkout suggests it may be the latter but their online explanatory pages are so vague I can’t figure it out.

    Starting an independent channel to bypass PayPal may seem impractical. But, then, so did PayPal at the time it was created. Consider it an intellectual challenge. Your call to readers in finance and banking for suggestions may yield something of value. It would be nice to see a little collaboration in this world for a change, instead of just ever increasing levels of strife.

    • I thought it was just me. It’s almost as though they don’t want you to sign up. I suspect it’s because it’s nowhere near as profitable as they thought it would be, and have no intention of keeping it running. Google Wallet is supposed to be a PayPal alternative for merchants and buyers – as far as I can tell – but not being able to sign up means really having no freaking idea.

  19. This is all far beyond my areas of expertise, but have you considered incorporating in the US (or other suitable country)? I would think that would give you access to alternative payment services, allow you to maintain US bank accounts, etc.—though perhaps the tax and administrative overhead aren’t worth it…

  20. Anonymous says:

    You may want to consider opening an USD account and a SGD account with the Spore branch of Msian banks and direct payments there. Internally, the bank can convert USD to SGD in Spore, then direct transfer to your MYR account with the same bank in Msia.

    • Not workable, we’re back to the problem of PP not paying out in foreign currency to the resident country. Otherwise I could skip that step and simply pay out to a USD account held in Malaysia, which my bank is happy to open for me…they want to make their % cut on the FX.

  21. Tim L. Shuck says:

    Information on their website is a bit thin (or perhaps I’m a bit thick) so I can’t tell if it meets your needs but this small, but apparently growing, company has been making a few headlines recently: More of a credit card alternative than PayPal alternative, I think.

  22. I truly understand the feeling of slowly being squeezed. I think the problem however is global and is slowly affecting every citizen in every country. Public or private sector, wages are stagnant yet property taxes, the price of gas for the car, heating fuel costs, electricity, the price of food, sales taxes . . . have increased at alarming rates since 2008; sometimes in excess of 20-30%. Hence household margins are also dropping steadily. Governments are squeezing public sector organizations since tax revenues have dropped. Corporations squeeze their consumers, their supply chains, their employees, all to better their margins to meet the, often insane, expectations of analysts.

    The United States certainly does not have a monopoly on greed. It can be seen everywhere. For example, in Canada the price of gasoline has increased over 30% since 2008 yet the price of a barrel of oil has not. Canadian oil refineries are forcing Canadians to pay this increase in price to satisfy not only themselves but their investors. Canadian corporations building profits on the backs of Canadians. Greed is a human quality and can be seen everywhere.

    Sometimes it feels like the air is being squeezed from my lungs. The only solution that I can see, and I hope that someone can see an alternative, is to reset our expectations for the lifestyle that we can lead both now and in to retirement. None of us has any options when it comes to buying food, fuel for our car, using banks to borrow or store money . . . goods and services sold at extortionate prices and, when questioned, governments, corporations and countries point fingers at one another to keep us confused and helpless. Its truly disheartening.

    • Where is the end point? Resetting your expectations is only going to go so far: you still need to eat, you still need shelter. Yes, there are limits to what we need, but even the basics get more and more expensive. I don’t see a solution, until the whole thing reaches implosion point. Out of that either humanity will collapse into anarchy, or perhaps we will be forced to transcend materialism…maybe Star Trek had it right.

      • In the world I see Ming a collapse into anarchy is very unlikely. The only way I see a scenario like that unfolding would be some sort of global catastrophe. You see absolute chaos and anarchy is very, very dangerous for those in control of the system. If the world descends into absolute chaos then there is a chance that true change could come about. When a man has nothing, he has nothing to lose. I believe that those in control fully understand this. I also believe they understand one of the basics of the human condition…… Given time man can adapt to almost any situation. What we are seeing in the world today is a controlled burn…. A slow and steady alteration of societies quality of life. Every year we get a little less, we get used to a little less. Remember after the big crash in 2008-2009 how many people lost their jobs. Now people are “happy” just to get jobs making half as much as they once were. I appreciate your Star Trek optimism, but I’m not much of an optimist when it comes to humanity (especially the likes of bankers and corporations.) So in closing I’d like to throw out a George Carlin quote…. “The upper class: keeps all of the money, pays none of the taxes. The middle class: pays all of the taxes, does all of the work. The poor are there…just to scare the s**t out of the middle class.”

  23. Tom Liles says:

    I feel sorry to hear about your woes MT. And it’s equally sad to read similar stories down here below the line.

    Maybe it’s still the after effects of reading Michael Sandel’s What Money Can’t Buy (a good book but he’s a bad rhetorotician in my view; “broken record” is what I’d call his style) but I’m feeling all Howard Beale from NETWORK tonight…

    I was turned off by the OCCUPY (mostly by its participants and their rickety arguments/philosophies/lack of real life experience) but it’s a sad shame to stand back and think how little impact it had and how little the corporate-political complex changed since they shat the money bed. I haven’t experienced any change. I haven’t seen any change. We still have regulators populated by the people they are supposed to be regulating. Politicians only talk about reducing taxes, not increasing them. The justice courts seem to unfailingly rule in favor of corporations –> the big Monsanto GM seed case springs to mind (then we read that a handful of the justices came up in Monsanto’s legal department)… It’s madness. Really.

    I don’t want to believe in the rose tinted past; but it is MIGHTY hard not to. Tell me I’m wrong but it seems as though we’re sick, and this is a sickness we haven’t seen before –> I search for moral fortitude, civic spirit, honesty in today’s world and its leaders, its icons… all I find are examples of money men fist-f***ing their way into the future, gouging every last billable hour and tax-payer freebie and hanging portraits of themselves doing some overly self-loving pose (for more see Steve Jobs) on the wall as they do it. It’s not luck, they are Titans and deserve all the money they get. They tell us. They tell us how hard they have worked and and yada yada… I was reading about David Packard on my way to work yesterday: a corporate big dog, made tons of money—but do we really think this is the same kind of man who roams elite corporate hallways thesedays?

    Anyway, the first comment on this thread sums it all up, and is a topic I’ve been thinking about intently the last few weeks:

    What is the logical and moral argument that health, yours and mine and every human being’s, should cost a single penny and be administered on any economic framework whatsoever?

    It’s testament to how much invented baggage we have with us that it’s just so hard to imagine breaking these rules that are utterly fictitious and not a real feature of human life in the truest sense of the word.

    PayPal is not the same thing. Or is it?

    A different outlet for the anti-humanism which seems to be the project of corporate machinery. If a revolution kicked off this evening, I think I’d just let it all go, rip my shirt off and run out with them. I dare to say it: I want to see all these masters of the universe burn.

    Who, which single individual in this World, needs and deserves a billion dollars?
    Old time fat cats at least built us museums and galleries and donated to them.
    What has Bernie Eccleston done?
    Even better, what has his daughter done?

    Feeling the sulphur in my veins tonight…

    • Tom Liles says:

      I did have a drink with my dinner tonight, let me just contritely add.

    • Dallas had it right: “Remember the Golden Rule? He who has the gold makes the rules.”

      That’s why occupy had effectively no impact: they had no power!

      I don’t think you have rose-tinted glasses on: life would be a lot simpler if everybody just did what they enjoyed as a career – if you enjoy it, you care, and if you care, quality isn’t compromised; if you’re good at what you do, then you’ll generally be successful anyway.

      If only it was that simple in reality.

    • So you mentioned Revolution! I have a vision of revolution….. No guns required, no blood shed either. Imagine what “we” could do to the system if all us “powerless” little people got together and all at once stopped paying our mortgages, our car loans, our student loans, our credit cards, and any other sum of money that the system extorts from us. How quickly would the banks and corporations implode? I think we could bring giants to their knees in a matter of days. No power. If we listen to the banks and corporations, perhaps…….

      • It would never work because of lack of coordination. People would not blindly follow, I think. That said…it would be ironic if a photography site spawned both a payment gateway and political revolution…

        • I completely agree. It would never work. Just wishful thinking on my part. It would be awesome if the site sparked the life of a payment system. I’m in. Until then do what you have to. Raise your prices. I can’t speak for all the readers, but I’m not going to let a percentage change out of your control change any purchasing decisions here in the future. Too much value here to let the A**holes at Paypal mess things up.

          • Thank you, Jeff. If there is a percentage change it will only be to cover the additional incremental fees, which should mean a couple of dollars.

      • Tom Liles says:

        I just want to run the streets with my shirt off.

        Then can we do what Jeff said.
        No wait, what Jeff said—then the running with shirts off.

        And shouting, too.

  24. pwright92 says:

    I have as much love for the Ebay/PayPal cartel as everyone else here. I am fortunate in that I do not rely on either for income, just discretionary sales and purchases of gear. I am about to sell off a bunch of unused camera equipment and will be listing on classified requesting international money order. I recently sold off about $5kUS in gear and lost about 10% to Ebay and PayPal fees.

    Being in Canada I also have the option of Interact transfer. unfortunately, this great $1.50 transfer service is domestic. As soon as you go international you are stuck with PayPal as the only viable option for electronic transfers. I worked in NYC and had to use wire transfers to get money between the two countries. I looked at ING and HSBC but even though both operate in both countries, they had no mechanism to transfer money between the two beyond wires.

    I would be fast to sign on to a service that was fair in their charges but none seem to exist.

    • The forums and wire transfers seem to be the best way to sell gear now. Either that or to friends, and cash – but the more specialized the gear, the fewer interested friends one seems to have :p

  25. Charlie Z says:

    Canadian-South Africans, like Musk, operate under the veneer of post-Colonial Commonwealth pleasantness, but I’m certain that they all have greedy, black hearts. PayPal is yet another effort of the British to indirectly ruin the reputation of America and Wall St.

    Seriously, I’ve been amazed by PayPal. It has simply inserted itself into the consumer payment stream, crowding the consumer’s 2 existing intermediaries, their bank and credit card associations, without any effective response. That the credit card companies, especially, just watched is baffling. It’s a simple bit of specific technology, market position and legal support that they already have in scads.

    Ming, you need to find a ‘commercial’ solution, if you can, to get out of “yard sale”/hobbyist processing. You need a real bank. PayPal/Ebay will charge what the market can bear, God bless them, and will instantly lower their rates when competitive alternatives appear, but that may be awhile. (Just beware of anyone from a Commonwealth country who wants to set one of those alternatives up.)

    • I’m talking to a couple…both as payment processors and potential partners to set up a PayPal competitor. Too much opportunity, too much belligerence to ignore.

  26. Iskabibble says:

    Making a living as a photographer just gets hard and harder and harder. I LOOOVE photography but I would never try to go full time with it. Just too hard. Makes my job as an industrial chemist look like a paper route.

    Good luck!

    • You can say that again! The only way to go is continuously up the value chain, or play price wars and die out. Explains why I’m now taking more creative-director/ consultant roles in addition to photography…

  27. Dwaine Dibbly says:

    Do you have a trusted friend in the USA who could help? Set up a US bank account and let Paypal, et al, deal with that, then do transfers from that acct to your home bank. Or, better, set up a credit card merchant acct through that US bank and dump Paypal completely. (Not to sound US-centric. Pick whichever country you’re getting most of your international business from. Or, set up the same thing in more than 1 country.) Good luck!

  28. whether you call it reganomics or thatcherism the bottom line is the same.
    It is the time in our history where greed became acceptable, where paper shufflers who contribute little or nothing to our economies became king.

    • I believe that’s called investment banking. Or consulting.

    • plevyadophy says:

      Well said! And it’s something Lord Alan Sugar (of Amstrad) goes on about quite a lot; he doesn’t hide is disdain for the “city”, never missing an opportunity to point out that they “make nothing”

      And it makes me seethe with anger when you think of the fees that PayPal charge for sitting on their arses doing sweet f.a; at least with a high street bank you have some face-to-face interaction and engagement with customers. PayPal just sit on their arses and gouge our eyes out with their fees.

      • They’re also impossible to get hold of; there is no customer service.

        • plevyadophy says:

          Yeah exactly.Hence my rage. They aren’t doing anything really; it’s all automated, yet they think they deserve these high fees. I too have tried contacting “customer services” about the same issue for YEARS and I haven’t heard a peep out of them. An utterly despicable organisation.

          Should a large and credible challenger come on the scene, they will quickly learn how hated they are when their “customers” leave in droves. They remind me of the U.S. and Italian mafia; just like them, they can count the numbers of people “with them” so can claim popularity; and just like them they use bully boy tactics to keep people on board (e.g. no eBay Buyer Protection unless you use PayPal, but erm you fekkin own PayPal. Monopoly anyone?!); and just like them, they are so full of themselves that they can’t see, or refuse to believe that they are hated by many; and just like the mafia who for many years now have had members of their “family” do the unthinkable and “turn”, PayPal will find “customers” jumping ship at the first opportunity. Take Western Union for example, if they could clean up their act so that dodgy landlords and eBayers don’t use their service and also charged reasonable fees, I reckon they could put a massive whole in PayPal profits (Western Union have a great reputation amongst people sending remittances back home to family in developing nations but they need to clean up their reputation in terms of business transactions). I reckon it would take very little effort for Western Union to operate an online payment system similar to PayPal’s.

  29. Sebastian says:

    PayPal is already officially treated as a bank throughout Europe. Quotation from their website (my translation):

    “Since 2007, PayPal is licensed as a bank in Europe and is regulated by the Luxembourg Bank Surveillance CSSF, and thus bound by European law.”

    It has helped nada. They still freeze accounts at will and treat customers like rightless shit. Just like any monopolist would do.

    I hope you find an alternative, Ming. Have you looked into Kagi ( I don’t know if it even fits your kind of business (they are concentrated on software), but at least they claim to be operating worldwide.

    • plevyadophy says:

      Hmm, call me cynical, but that sounds like meaningless drivel.

      In the U.K. a proper banking organisation allows for customers to complain to the Banking Ombudsman, I don’t think PayPal does (correct me if I am wrong).

      As for that Luxembourg nonsense, I would love to know EXACTLY in what way they are “regulated”; I will take a risk here and say that I bet it has hardly any resemblance to the kind of regulatory framework that E.U. banking customers expect of normal high street banks (or even ordinary banks that offer only online services).

    • Which basically means they act with impunity…just like a bank. Sigh.

  30. Western Union Ming?

    • plevyadophy says:

      The problem with Western Union, from my experience here in the U.K., is that they have “DODGY” written all over the brand; not because there is anything (that I am aware of) inherently dodgy about the Western Union organisation/brand but because a great deal of dodgy people use Western Union as their preferred payment system. An example: a dodgy eBayer will ask for payment by Western Union; buyer innocently pays; dodgy eBayer collects money and walks off into the horizon without trace; no goods are sent to buyer. The other popular scam here in London, is dodgy “landlords” advertising in Gumtree who ask that viewers pay a fee before being given a list of properties for let that they can view; they ask that payment be made by Western Union and of course they collect the money from their local Western Union agent and the customer gets nothing.

      Personally, if I see any service where I see Western Union mentioned as the payment method, I think “DODGY” and I don’t even bother to read any further; and yes, I accept that it may well be that the service provider is honest and I could be losing out but there will always be others selling whatever the service is selling and not using Western Union, and if I stick strictly to avoiding Western Union then I won’t slip up and get stung by some crook.

      I don’t think it would be good for the Ming Thein brand to be associated with scammmers by using the “scammers society’s” favourite payment merchant.

      • You hit on a good point: one of the main reasons why we continue to use PayPal is reputation. The smaller payment providers, WU, and even if I were to get my own credit card terminal – do not carry the same degree of consumer confidence. That alone hugely impacts sales: you want to make the buying process as confidence-inspiring and easy as possible. Unfortunately, I really can’t see another alternative. 😦

      • And of course we all know who owns gumtree, yep e$ay – Pa$pal and they simply don’t care that people are scammed.

  31. Andy Chiu says:

    Would Western Union be an alternative?

  32. Hi Ming, in your words: “offer a product or service that is unique and not easily replaceable, for which demand is greater than supply and you can set prices at the level you see fit”. I hate to say this, but this is exactly what PayPal is doing.

    BTW, same thing with Amazon (if you want to act as a seller) or eBay (again for the sellers). They started out cheap and raised their fees up to 9%.

  33. plevyadophy says:

    May I take this opportunity to join you in the rant. From a financial perspective, I hate eBay and PayPal (owned by eBay); I regard them as thieving scum leeches and ………………. I am in the U.K. where the fees don’t appear to be as extortionate as what you are paying in Malaysia but they are still extortionate all the same.

    Here’s an example. When you sell on eBay, eBay charges a fee that is a percentage of final sale price; and rightly, this percentage is NOT calculated based on the total cost including postage and packaging i.e.your p & p charges don’t attract eBay fees. However, sneakingly, by the back door eBay get a cut of the p & p charges because ALL money entering your PayPal account attracts a PayPal fee. A damn scam.

    And like you, I hate the arrogance of the organisation, who never seem to resolve issues unless the media get involved e.g. a dear old lady is treated badly and she ends up as guest on a chat show; miraculously, a spokesperson for eBay/PayPal is communicative and resolves the problem.

    I hate the organisation with a passion but ………………… unfortunately, there’s no credible alternative and our governments and EU regulators haven’t bothered to investigate and regulate; the eBay/PayPal racket is long overdue a monopolies investigation and regulation.

    In the U.K. we did have (still have?) an alternative called Nochex which seemed good at first, but I found them more than idiotic to deal with and have closed my account with them so long ago that I can’t even remember how long ago it was. Others here might have more recent and better experiences with Nochex (but Nochex, I think, do require you to have a U.K. bank account).

    Oh, by the way, I don’t know if you noticed, but PayPal have been offering customers a cash/debit card for some time. Each time I log into my PayPal account I am met with an offer for this card but I have never bothered to look at it. Is it just a U.K. thing or do Asian customers get the same offer? If it’s some kind of debit card, then I would imagine (hope!!!) that accessing your PayPal funds wouldn’t attract the same fees as obtains when you transfer PayPal funds to your ordinary bank account. Of course, getting back to the issue of regulation, it would seem to me that with this card offer PayPal are becoming suspiciously close to becoming a bank by the back door (some may argue that already were).

    I really do hope you find a solution soon and perhaps your solution might encourage enough others to do likewise such that the eBay PayPal duopoly come to their senses.


    • I used Nochex for a while, but it landed up being more of a headache even than Paypal.

      The debit card must be a UK thing. I’m guessing that they want people to sign up by offering the low/no fee carrot, but at the same time they of course require you to maintain a balance in the account. This balance not only doesn’t get paid interest, but is also not subject to any fiduciary oversight…

      Yes. PayPal are a bank with no physical branches, basically. And that lack of ‘residency’ effectively makes them unpoliceable. Frankly, I’m surprised more international financial regulators haven’t investigated them yet because the way they operate makes money laundering very, very easy…and 10% is a small price to pay for clean funds.

      • plevyadophy says:

        Well, I am a cynical conspiracy theorist so my take on the world is that wherever people have the opportunity to be dodgy they will be and when organisations are operating with impunity it’s because they have “earned” themselves some allies.

        Why have not this organisation been investigated until now? My view is that for the very reason it’s big business and it’s U.S. based; big business can, no do, “influence” governments and the US’s lapdog allies don’t like upsetting Washington unless they are really forced to.

        We had the BCCI banking “scandal” here in the U.K. That bank had mainly Arab and Asian customers and management. When it got into difficulties the government/regulators were ever so quick to close it down and prosecute. We then had Northern Rock and a lot of other mismanaged banks, but instead of closure and criminal convictions these institutions benefited from knighthoods for some individuals and bail outs from taxpayers’ money. PayPal is a yank organisation, it ain’t gonna get investigated or regulated any time soon by any EU regulator, not unless the demographic of the organisation’s management dramatically changes.

  34. Remember the Golden Rule? He who has the gold makes the rules.

    Until that changes you simply have to suck it up, mate. Have you looked at 2Checkout? I was using them before PayPal deigned to grace South Africa with their service. They can pay you out weekly into a prepaid MasterCard operated by Payoneer. You can use the card anywhere. But there are costs with them too, so you’re never going to escape that, I’m afraid. You have to build it into your pricing.

    • So we’re back to square one: start your own, wire transfer, or just up prices.

      • dallasdahms says:

        Unfortunately yes. You have to pay for some fat cat banking accountant’s kid’s private school, and their holiday home in Switzerland, and their mistress’ penchant for expensive jewellery, and the Gucci apparel, etc, ad nauseum.

  35. Alternatives are probably difficult to come by. I think getting your own credit card merchant terminal might be worth the investment. What about Bitcoins? No expert on this, but I think people start liking it. Or even direct money transfers might be reasonable now that PayPal jacked up the prices, plus, you would move the FX risk to the payer. Your idea of setting up a cooperative might be the best way forward.

    • I’m going to direct wire for email school and workshops; the smaller value purchases remain uneconomical. Unfortunately most of the alternatives are very US-centric, which doesn’t work because my customer base is international. It’s annoying because PP’s fees are high enough to be unfair, but still low enough that the saving (if any) doesn’t offset the extra effort required to run a separate payment gateway.

      • As a buyer, the advantage of PayPal is that I can use my credit card and benefit from deferred payment date and possible points collection. I am 100% with you that services like PP have monopolistic tendencies which affect their quality. I think for smaller amounts you should look at Bitcoins.

  36. This is clearly not my area of expertise, Ming. As a long-term entrepreneur in a small, creative business, I feel your pain. I feel like we have lots to discuss in person in Prague over a cigar. In the meantime, I’ve been very impressed by square as a payment service. I believe the cost to be lower than a merchant account and also less than paypal. Am I mistaken here or is that something that could work for you?

    • zonjineko says:

      Square is great but is not a PayPal service alternative. It is only a physical card-reading service like in a store or restaurant. Hopefully it may one day turn in to a PayPal service – some smart people behind it so fingers crossed.

    • Absolutely – I’ll bring the smokes.

      As for Square – it would be ideal except they don’t operate in Malaysia 😦

  37. halophotos says:

    Hi Ming, I agree these company are too greedy. PayPal takes 10% and eBay does the same.
    I sold my m8 a while ago for about 1800 aud but was slugged with $185 bill from eBay! That’s a rip off.
    And companies like google, apple…..they are just the same. These fuckers don’t even pay taxes, no wonder their offices have beers on tap, massages, segways, and electric cars.
    Last year google made $2bn from Australia and paid $74000 in taxes! Now that’s wrong! Heck… That’s like taxes paid by 6 public servants!

    Wish there was an alternative, providers who would charge a reasonable amount and not start charging you a piece of your pie.

    • The more I think about it, the more I wonder if it’s worthwhile starting something myself…

      • I’ve been interested in these sort of projects myself for some time coming from a tech industry perspective.

    • Just one more corporate money grab to add to the list of practices that should be acted on as “price gouging”, but won’t be…sorry Ming. As much as I distrust the idea of anything that makes money by creating nothing tangible…I wonder if the likes of will ever be a viable alternative to Centralised Banking?

      Agreed halophotos….this is a biggie and I really hope recent G20 discussions regarding corporate tax evasion bear fruit. I have no problems with well conceived, and managed companies making money legitimately, but this behaviour is totally unethical (even if not currently illegal). It is also a “double whammy”…not only do they magically expand their bottom line, but it allows them a grossly unfair advantage over smaller enterprises that maintain full, and transparent, taxation obligations, thereby destroying any competition, pumping up revenue further (and further homogenising the commercial landscape into a collection of huge monoliths).

      • Well, I think PayPal does add value by making payments easy and instant, but I think they should be encouraging even more people to use their services and gaining revenue through transaction volume rather than trying to stem the flow of people leaving the service by ‘taxing’ those who aren’t…

    • Iskabibble says:

      Apple pays taxes.

      Apple paid more in U.S. taxes last year than most companies made in total, but its tax bill could have been even higher.

      The California-based company paid $6 billion in federal corporate income taxes in the 2012 fiscal year, according to a statement Apple provided to The New York Times on Friday, in which it emphasized just how much money it pays back to the federal government annually.

      “In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government,” Apple said in the statement.

    • I just stopped buying from eBay and also selling. It’s a complete joke. I always get better deal at normal brick and mortar camera shops than offerings from eBay – everything is more expensive because sellers are trying to cover costs they have to pay to both eBay and PayPal.

      An alternative is needed – badly.

  38. Your 2nd suggestion on smaller margins might be possible with information products. Which you are already doing with your compendium, right?

    • It’s also frankly not selling well. I have not recovered the development costs yet, still. Even if you sell tens of thousands, the margins are terrible. And Apple takes 30%!

      • Last I checked Apple’s reserves were insanely lofty and the company still deems it fit to collect 30% of the production of vast numbers of producers while taking no risks in producing the content: I personally construed it as an obscenely greedy action. Put differently how could 30% of an industry possibly be appropriate or equitable for distribution of digital content sold electronically via automated transactions: can anyone say “market efficiency”?

        This is of course not an optional service offered by Apple; not one offered for developers to voluntarily elect to use provided of course that Apple can demonstrate that its online store actually delivers adequate value that justifies the fees involved. (I remember when it was quite normal for a developer of a software application could collect payment directly from his or her customer.)

        Since that practice began I must say I’ve been both surprised and disappointed that people (markets) haven’t been effective in pushing back. Instead, Microsoft for example decided to copy the model with Windows 8.

        Consider this advancing to an unhappy landscape in which all images you produce for anyone must first pass through a Leica / Nikon / Sony / Olympus image store with 30% fees imposed on the transactions.

        Markets seemingly moving backwards in time?

        • Apple gets (got?) away with it because the market access it provided far outweighed the lost revenue from fees. For most things – I have stopped distributing stuff via the ipad/ Apple channel simply because it doesn’t make sense. I don’t get any extra pull from their channels; people who buy videos buy them because of my site, so why should I give Apple 30% for adding no value in this case?

          On the other hand, if you have an app/ game/ whatever that would sell maybe 500 copies from your little site but 50,000 through Apple, it makes sense. There are alternatives for that channel: there aren’t for PayPal.

          • The situation is different for videos for sale and the like, but Iif I’m not mistaken an app developer is subject to digital handcuffs that prevent him from selling his app directly (or anywhere other than the Apple store).
            I believe that rather the development agreements and technical tools necessary for the device force the choice of channel.sIf I have spent considerable money and effort developing my own customers, who would now like my solution on an iPhone….. if they’re not wanting to jailbreak their device then what practical alternatives do I have rather than giving 30% of the business to Apple?
            If developers could make a business decision to sell in Apple store for 50000 volume. Vs my own 500 then I could agree with you, but its not a voluntary business decision: the channel is involuntarily forced on the developer and Apple invested in technology to enforce this involuntary arrangement. A corresponding argument might also be made that if the Apple channel wete truly competing ntirely on merit / productivity of the channel alone then it would be able to.walk away from (and never have used) handcuffs on developers.

            • Any and all in-app purchases are subject to 30%. This makes sense if access to the audience itself is worth more than a 30% increase in revenue; otherwise there may be better methods to distribute your content. Agreed, the are no limitations on selling apps elsewhere – except for the nature of the ecosystem itself. It’s just that the ecosystem is far too big to ignore for most; for specialized content – my app for instance – sales are driven externally, not by the ecosystem, so the value it adds is questionable.

  39. Michael Waldron says:

    Why not create a corp in singapore and open a usd deposit account there to recieve the usd payments from PayPal? Leave them there if you are worried about ringgit depreciation or have the bank transfer to you if you need the money. I don’t know anything about your currency & tax laws, but there could well be restrictions. Otherwise, I would think that SIngapore would be ok with it. Maybe the cost is too high, however.

  40. Not a merchant so not sure how Amazon payment fares

  41. We better order stuff from you before 10 Sep 2013 🙂

  42. Gary Morris says:

    Quick Google search turned up this payment processing company in your country…

    As for PayPal, we’ve been keenly aware that they are a non-regulated money entity for some time (after they began rejecting our transactions unless we applied for and were approved for their credit card to securitize our transactions… I got the card and promptly shredded it… so far nothing has come from the fact that I have never activated the card). My only guess is that PayPal spreads lots of green fairy dust around Washington DC to be able to maintain their current status.

    You can try to complain to the Consumer Financial Protection Agency in DC… though I suspect little or nothing will come of it. But perhaps worth a try.

    Otherwise I can’t offer much to you other than to say you can pass some or all of the increase along in the form of a processing fee (shippers and airlines routinely tack on fuel surcharges) or gradually increase your prices (do so gradually so customers are less likely to react negatively).

    • I found them too, but I don’t have any degree of confidence: here’s the question to you as a buyer: would you hand over cc details to a company you’ve never heard of in the third world? I certainly wouldn’t. And that alone will affect sales more than PayPal’s fee increases, which is probably what they’re banking on. I’m sorry to say this, but a price rise of a couple of dollars is likely to happen in the next few months.

      • Most certainly not, I agree. If your (Malay) currency regulations permit, why not trying to open up a US and a EU bank account? Direct wires within those cueency areas are close to zero cost by now, and easy to perform via internet banking. If not, what about using Amazon as a conduit? They surely take their cut, maybe less than Paypal?
        Hope you can solve this. Still, the world of cross border payments has never been known as anything but a rip-off and it will take time before that changes. It has within the Euro area, no matter how despised by many the idea now is.

        • I can’t open a bank account in the US without a residential address – I tried on my last trip over. I have one in the UK, but remittances are enough of a pain (i.e. international ones can’t be done without you going to the branch in person, which is obviously impractical) that it might as well be impossible. Foreign currency accounts here are doable, but don’t offer any fee relief for foreign transfers. And PayPal won’t pay out in foreign currency to a local account – so they can charge you their 4% FX fee…

          Amazon payments doesn’t operate in Malaysia.

          • Gary Morris says:

            The Patriot Act all but requires not only US residency but some would say that the US residence must be your primary residence in order to set up a regular banking account with a US (regulated) bank. However, I’m not sure at all what the requirements are if you set up another “non-bank” account (PayPal is a non-bank). For instance you might be able to open up a brokerage account at an investment bank. But then you’re issue is not solved because brokerage fees will probably make PayPal seem affordable. Back to you’re only real solution… raising your prices incrementally and hope your market finds your product compelling enough to look past the increase.

            • Pretty much! I’m not worrying about the quality of my product, I a) want to price things at this level because I believe it’s a fair price for what I’m giving and fair compensation to me and my partners; b) I don’t want to encourage crooks.

          • Ming

            You said: “I have one in the UK, but remittances are enough of a pain (i.e. international ones can’t be done without you going to the branch in person, which is obviously impractical)”

            I think things have changed since you last looked at personal banking in the UK. The payment I made to you for the Amsterdam workshop was from a USD Citibank account in the UK and I did it by telephone. In the past you had to go into the branch but you can now do it online (with a security call-back from Citi to check your identity) or just call telephone banking. There was a USD 25 charge for the transfer. Also if you have different currency accounts then the FX rate for intra-account transfer is very competitive although I doubt they offer an MYR account.

            • I’ll look at the banks again when I’m next in London next year. All I know is my current account doesn’t let me do that, but that bank is not exactly known for being the best either. Still awaiting your transfer, I’ll let you know once it clears.

    • Name the fee “PayPal Gouging Fee”

  43. I have been averse to using Paypal or in fact any US based service. Unfortunately the alternatives are not there or credible….. keep up your wonderful services and blog!!

  44. I believe this is all being driven by the United States and their pursuit of any and every American who has business outside the US. We’re not only destroying our own economy but the global one as well. We’re out of money and the desire to look under every rock all over the world for any loose change is the cause. Its my opinion that the NSA’s operations is being used in conjunction of our Treasury Department to track and find any penny it can.

    PayPal has found a market that it has almost sole control (monopoly) and is doing what it can to reap the windfall until another competitor can attempt to compete.

    Have you considered Google Wallet Ming?

    Not sure if it is any better than Paypal or offered in your part of the world.

    • It’s simpler than that: short term corporate greed. Profit now to show good results because your term is three years; never mind if you kill your customers in the process.

      Sadly Google Wallet doesn’t seem to be signing up any new merchants. I spent the better part of an hour scouring every page but no dice.

      • Sad state of affairs. 😦 Perhaps Google has imposed regional limits? Because I found this page:
        Clicking on the “Sign up for Wallet for digital goods (production)” link took me to the merchant setup page, which I was able to complete successfully.

        • I can sign up too…but for some odd reason it won’t let me change the country out of being Australia, which obviously doesn’t work either. It might well be a regional thing.

          • It wouldn’t let me change country either, but it was correct for me. Perhaps check your google wallet or just your google account and see if something is going on there?

            • My google account is in the right country, but wallet won’t let me change it. Hmmm…I shall try on a different device and see if it’s some funny IP setting or something.

  45. Ron Scubadiver says:

    I don’t have anything good to say about PayPal. Sorry you are having this problem. They can’t be trusted. Consumers have to maintain a separate checking account keeping a minimum balance until they are ready to buy something then make a deposit. Otherwise, there is a risk that the entire balance will disappear.

    • I maintain a small balance in there for convenience and purchasing small accessories and things off eBay, but nothing more than that. One account freeze is more than enough for you to totally lose confidence in their fiduciary duty.

  46. MT, I think your cost of doing business with PayPal has more than doubled, if on a payment of $100 – you were being charged $5, now you are being charged $12, which is an increase of 140% over original cost.

  47. Agreed Ming – you would think PayPal would be doing the opposite at this point in time.

    It would seem to make prefect sense to be lowering their fees and making sure they are so entrenched in the online market and so cheap for everything form large purchases to micro-payments that no alternative would ever get off the ground. The lost revenue would be more than made up by more transactions around the world.

    I think a growing number of people are hoping the likes of Stripe get off the ground and offer up some real competition.

    • I’d have switched long ago except for the problem that none of them will transfer out to a Malaysian bank account, making the money effectively useless…

      • zonjineko says:

        Yep same problem in Australia – waiting for the likes of Stripe to allow non-US payments. I imagine it’s a huge job and a ton of red-tape but it needs to be fixed.

        In 2013 we should be able to do payments much easier. Of course we should be able to do a ton of things much easier but big business (banks, telcos, TV, music companies etc) are doing whatever they can to not be dragged in to the 21st century where there is real world-wide competition.

        • It’s not competition that they’re afraid of: it’s the fact that they’re probably going to come out in worse shape because the free market will vote with their wallets. Same goes for any industry, really. Best thing to do is get into an industry that’s hugely democratic and fragmented to begin with – easier to stand out if you’re good, and no monopolies playing dirty.

      • Have you actually contacted e.g. Stripe to discuss whether they would facilitate overseas transfers? One would hope they would seize, or at least, consider, any opportunity to take business from PP.

  48. Leonard Hobbs says:


    Any chance of setting up person to person payments P2P? Is this an option in KL? I pay my mothy rent to my landlord via P2P and others.. Set up an account in the US, Europe with banks that do P2P – no fees for most. Just brainstorming. I do not know if this is an option for you.


    • Unfortunately this doesn’t exist for international payments. Domestic within Malaysia is no issue, but most of my readers and the vast majority of customers are overseas.

      • plevyadophy says:

        Well, obviously, I can’t speak for Malaysia, my not being a citizen. However, are you 100% about that not being possible. The reason I ask is that all of my bank account statements include something called an IBAN number (international banking number). Once I have an IBAN I can easily pay someone abroad or they can pay me.

        However, to be honest many banks here in the U.K. make it a primitive chore to do as you have to go into the bank and get yourself a paper form (gosh remember them things from the last century?!!) and fill in a zillion details. I have done it once or twice, and I don’t recall it costing me anything, or the cost was so little that it hasn’t stuck in my mind as an issue.

        Of late, I have not needed to make such payments so I don’t know if any of our banks here in the U.K. have got their act together and know allow us to make person to person payment via our online banking facility (I have a very vague recollection of one bank advertising that this was now an option with them).

        If you can get your IBAN, then your customers, depending on where they are in the world, should be able to pay directly into your account without you incurring any onerous fees.


        • It’s the paper form bit that makes it impractical. I still have a bank account in the UK, but it’s pretty much useless because the range of online transactions are very limited for international transfers. My brother, who’s still there and has many accounts with other banks, says it’s pretty much the same across the board.

          Direct transfers for big amounts are undoubtedly the way to go, even if I cover the fee costs – these are fixed and still much lower than PayPal. But micropayments are the headache, because though it might be worth paying US$20 in fees for a US$2,000 workshop, it isn’t on a US$60 video.

          • plevyadophy says:

            Yes, I feel your pain re micro payments. I have items I want to sell on eBay but can’t because the fees just make uneconomical so to do; no I retract that, it isn’t uneconomical, it’s downright financial stupidity!!!

            I really fail to understand eBay/PayPal’s stupidity, nay, greed. It’s very short sited. I mean, I don’t represent the planet but if I am anything to go by, there must be thousands, if not millions of people, sitting on items that could return some income for them but they dare not bother with eBay because the fees alone will just make it silly to bother selling. So many of us are sitting on items we can’t sell, and eBay/PayPal are not getting potential income because of their greed and arrogance.

            You know, eBay/PayPal should learn from Simon Woodroffe who used to say “it’s better to have a small slice of a big pie than to have a big slice of a small one” when discussing percentage takes from a business one might consider investing in.

            • That’s very true. The pie could be a lot larger and absolute returns higher if they were willing to make it attractive for other customers…

          • Will Needham says:

            I’m lost as to what the problem with international transfers from your UK bank is. Can certainly do them online from my First Direct account and I believe all of HSBC is the same. HSBC even offer dedicated international accounts if you dig around on their website.

            • Natwest – need I say more?

              HSBC were possibly even worse than Paypal, at least in Malaysia. I closed my accounts earlier this year – discrimination/ racism, non-existent service, unnecessary fees…you name it. That is one entity I will never deal with again if I can avoid it.

        • Steve Jones says:

          Yes,I’m waiting for a direct payments system too. believe it or not I still don’t own a credit card and I’m having nothing to do with Paypal for all of the reasons you’ve mentioned. Much as I would love to see those videos …….

      • Very sorry to hear about the difficulties that you are experiencing making it harder to do business. But, the world is a big place, and internet businesses don’t require a physical presence. Since you say that “most of my readers and the vast majority of customers are overseas”, how about picking some more favorable country and currency for the virtual location of your international business? Perhaps pick a place where PayPal rates are less expensive? If you can avoid losing 7% of your income, maybe it just might be worth the bother. (If this is too much trouble, perhaps, given your financial expertise, providing a service of making all this easy for yourself and others might provide a huge business opportunity.)

        • I’m not making enough money for it to be worthwhile incorporating in another country. And whilst setting up a PayPal rival is not a bad idea, it’s a huge amount of work and very much long burn. The easier solution would be to do like every other industry and raise prices to match inflation…

  49. Your paying for Obama Care like the rest of us:(

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