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?

[Read more…]

Rant on: Paypal woes, shy subjects and travel today

_RX100_DSC3701 copy
Royal lake at dawn, Yangon.

As of late last night, I just returned from four days in Yangon, Myanmar. Firstly, I apologize for any and all delays in replying email and messages; the internet was barely usable and it seemed that only iOS devices could access WordPress (but only the comments).

Slow internet I can live with. But what came next surprised and angered me. It seems that Myanmar – along with North Korea and Cuba – is on the list of countries sanctioned by the US Office of Foreign Assets Control and The Bank of England. If you try to access your Paypal account from one of these countries, it will be suspended and you will be forced to go through a lengthy and inconvenient process to reactivate it in order to access the funds in your account. Not only that, if you try to access it again, your account will be permanently closed and the funds seized. There are many, many problems here:

  • My account is with Paypal Malaysia, registered in Singapore. These controls do not apply as funds held here are not subject to either US or UK oversight. I am not a US citizen or green card holder and am not under the ageis of that  government.
  • To reactivate your account, you have to prove your ID (fine) and that “the funds are not being used for the benefit of persons or organizations in Myanmar”. How the hell do you prove that if you’re an ordinary tourist who needs to pay for their hotel via Agoda, or air tickets, or something? I have a reasonably easy to find profile online and – obviously – this site, along with citations elsewhere, and I’m still being required to provide additional proof.
  • Within Paypal, the left and right hands are obviously not talking to each other – I’ve gotten emails from four different departments asking for different documents and informing me that my account will continue to be suspended until I provide said documents – it’s not clear who is handling what, and nobody on the phone can seem to tell me, either.
  • Customer service is a joke – it just doesn’t exist. And I’m supposed to be “a valued business customer” – all I know is that between international client payments, royalties, workshop payments, DVD sales I’ve had at least six figures go through there in the last year – which surely must be above average – and they’re still taking 24-48 hours just to reply to enquiries, let alone reactivate the account. Apparently it’s 48 hours to review documents, 48 hours to reply to you when you want to confirm the type of document they need, and another 48 hours to review again. In the intervening period, they’re happy to hold on to your money, deny you access and collect the interest.
  • It’s month end. I’ve got a number of automated royalty payments incoming which are now lost in the ether; Paypal doesn’t let you accept funds, either. And of course being automated, the remitting agencies won’t try again if the money is rejected; they’ll just keep it.
  • Closing somebody’s account and seizing funds without just cause or jurisdiction is simply illegal and unethical.
  • Of course, none of this would have happened if they’d simply told you what the countries on the banned list were and what the consequences might be before you tried to access your account.

Needless to say, if anybody knows of an easy online alternative to Paypal for accepting and sending money internationally, I’m voting with my wallet and taking my business elsewhere. It’s not the first time, either; if you don’t complain regularly, it seems they take their own sweet time releasing funds to your bank account – up to two weeks in the past – no doubt accumulating healthy overnight interest in the process. The company is a disgrace and operates without care or service for its customers or any ethics whatsoever.

I’m going to stop here and skip over Air Asia – uncleaned airplanes, inedible food, horrible-smelling air in the cabin being pumped in through the ducts, inhumane seat pitches and very little to no discounts over full price carriers once you factor everything else in, but have to use them because there are no seats left elsewhere – before I give myself a headache.

Yangon itself was quite pleasant: non-stop sunshine, warm (30C+) temperatures during the day – but relatively low humidity – cool evenings, and pedestrian-friendly. Lots of dust, though, and little to do after the sun goes down. For the most part, the Burmese seem to absolutely hate having their picture taken. Even with years of practiced stealth, almost never could I get a shot off without them noticing; in most cases, turning away or hiding their faces with something, too. I don’t know if it’s religious/ cultural or a hangover of something more sinister, but it certainly was photographically frustrating.

The city seems to have its fair share of tourist touts, too – from little kids who force things into your pockets then insist you have to pay them because you took their goods, to other little kids who force you to buy their plastic bags to store your shoes before you enter a temple or pagoda at an exorbitant price, to ‘monks’ who follow you around until you donate – that cannot possibly be part of the buddhist way – to the usual gamut of taxi ripoffs and ‘tourist-only’ fees. Hell, it costs US$60 to rent a sim card at the airport – and you have no choice because your mobile won’t roam. There’s no way I look local, so I just had to endure the hassling. It’s a shame, really, because the majority of regular Burmese are actually very warm and friendly people.

I’m off to hassle Paypal again once I’ve caught up with several hundred emails. As for images…when I get around to it…MT


Visit our Teaching Store to up your photographic game – including Photoshop Workflow DVDs and customized Email School of Photography; or go mobile with the Photography Compendium for iPad. You can also get your gear from Amazon.comhere. Prices are the same as normal, however a small portion of your purchase value is referred back to me. Thanks!

Don’t forget to like us on Facebook and join the reader Flickr group!


Images and content copyright Ming Thein | 2012 onwards. All rights reserved