I asked software vendors we work with who had previously used PayPal for their e-commerce to list any issues or limitations they experienced when using PayPal. The following outlines some of the issues that they experienced. No doubt there are countless happy PayPal clients out there as well, these are just issues some have run into that everyone should at least evaluate.

“PayPal’s reporting is extremely limited.”

“Virtually impossible to use for serious businesses without extensive external code or a system to manage customer flow/cross/upsells.”

“You spend too much precious time on e-commerce tasks and way too little time on marketing and dev.”
“For business-to-business products, clients do not take you seriously as a potential supplier if PayPal is your main payment method.”

“PayPal has very strict rules about the orders they are willing to let through, so merchants end up with fewer orders going through/lost revenue. They are quite picky about declining certain credit and debit cards other services would otherwise accept.”

“I log into my PayPal account and what do I see? “For my protection” they have limited the ability of my account to withdraw or send money but most severely, they also disallowed the account to receive payments! Frantically, I go to MacGraPhoto’s buy page, click buy and see a message “The seller can’t receive payments at this time”. At about the same time I get an email from a potential customer that says that he can’t buy the bundle. In the server log I see other people trying buy the bundle and leaving. Lost sales. Not good. Not good at all. My PayPal’s page lists lots of things that I need to provide to PayPal regarding my personal identity and regarding the sales. Some requests are totally not relevant to the case or to our business…And, it’s totally impossible to directly talk to the people who actually decide…I receive another email from PayPal. The subject was new: “PayPal appeal denied”…So, now the money (most of which is not even ours but of our bundle members) is held for 6 months. Sure, they are “making every effort to minimize any disruption to your business”. Sure, no disruption at all…Needless to say, I didn’t get any response not after 72 hours and not after a week. I called support again and was told that they won’t respond me because my appeal was denied and they don’t reopen cases…I won’t be using PayPal to sell anything from now. They have grown too big to be efficient and caring for their customers. Quick to make totally disruptive decisions and to dismiss legitimate businesses without really taking a look at what it is…They took the liberty to totally halt our business, to cause lots of lost sales and a major cash flow blow only because we got successful with one promotion, after being their customers for a long time. Right, they “regret any inconvenience this may cause”. They are “making every effort to minimize any disruption to your business”. If you’re selling anything and use PayPal as your only payment option, I urge you to reconsider. They can cut your oxygen supply right at peak of your success, of course “for your own protection”…we decided to leave PayPal as our e-commerce service at Apparent Software and moved to FastSpring.”

“No branding on PayPal order pages means fewer purchases! My order page needs to blend in with the rest of my site or too many people will bail on us”

“No fulfillment support”

“Revenue is lost because a decent number of customers are located in countries PayPal won’t accept payments within for whatever reason.”

“As much as I like rolling my own solutions, it’s too complicated to offer quantity discounts, coupon codes, and multiple currencies on top of the PayPal API alone.”

“Tax responsibilities are on the client, ugh.” (US and EU VAT)

“Huge problems with spam filters on PayPal — we automatically send out logins once an order is processed yet a higher percentage is not received than is received.”

“They have virtually no fraud screening.”

“(PayPal is) more difficult to set up – documentation spread all over the place, and forum answers sometimes misleading”

“There is no support for discount codes/vouchers (this really surprised me)”

“No experience with (PayPal) customer service yet- but I’ve heard bad things”

“Their system is very clunky, as far as looking up orders, pulling reports, checking a history etc…”

“PayPal heavily favors the purchaser not the vendor selling, as in chargebacks or disputes etc.”

“I don’t get notification of orders on a consistent basis, I have to login and check orders daily”

"We sell off multiple sites with the same PayPal account and the reporting to figure out which sites generated which sales is a nightmare”

“Lacks professionalism”

“Their UI stinks, it takes me a while to figure out how to do things in their system”

“I have heard too much about PayPal’s abuses to trust them. When I see something where the only payment option is PayPal, I select a different option: not buying.”

“No ability to offer upsells (at least that I can figure out)”