This is an open letter to Paypal. I wish I had come to this forum a year ago and seen all of the simular posts.
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Hello, we have using Paypal Pro for a year now and have for the most part been happy with the service.
We are a Saas based business mangegment application for shedule based businsses (www.checkfront.com). We have been an avid supporter of Paypal and list it as one of our preferred gateways -- see: http://www.checkfront.com/resources/. A good portion of our customers use us with either Paypal or Paypal Pro, many of them directly referred by our account setup page.
Our problem is, that we currently have a rolling reserve of 20% for 90 days. This has proven a problem as we scale out or service, as it it consumes almost all of our margin. How do other businsses operate under these restrictions?
All we do are recurring payments and offer a 30 day refund, as well as a 14 day trial to our service. We do not deal in any hard goods, and our customers get plenty of time to evaluate our product before they subscribe. We do not process payments on behalf of anyone else. I find it hard to belive this is a high risk business. The reality is that we can't scale our business up based on the size and length of the holdback. The fact that you take a resurve on the same rocurrecing subscrition, month over month leaves me scratching my head.
I'm really hoping this can find its way to someone in your organization who can help before we are forced to move on from Paypal completely.
Thanks and regards,
Jason
Co-Founder, Checkfront Inc
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The response to this was:
Thanks for writing to us. I appreciate the opportunity to assist you
with your questions.
The only other option would be to cancel the website payments
pro/virtual terminal agreement. Once you cancel that service and use
PayPal standard only, we would be able to stop the reserves on the
account.
Sincerely,
Betty
So the only solution offered, is to stop using the service, or move our business to Paypal Standard. As of now, we are taking that advice, for both us, and our clients - except for the Paypal Standard part. If you are considering starting a new business and relying on Paypal as your sole processor, I'd reconsider.
