Though its pre-history stretches back to 1998, PayPal became the company we know in 2002, the same year it merged with eBay. Since spinning off in 2014 to become an independent company once again, PayPal has remained the single most globally dominant digital payment company
The initial years of PayPal’s massive growth were closely tied to that of eBay. No online retailer had ever before come anywhere close to eBay’s stratospheric success. Highly unusual for its time, eBay relied on thousands of individual sellers, each interacting with its customer base of millions of consumers. Such an audacious business model would have been doomed to failure without robust measures to assure reliability and trust on both sides. PayPal’s revolutionary payment processing technology was crucial in building that trust.
As PayPal’s tech services allowed eBay to grow, so too did eBay’s growth pour massive profits into PayPal. It was a tremendously mutually beneficial arrangement that officially lasted twelve years, though PayPal continues to be among eBay’s most significant payment processors to this day. Nevertheless, by 2014 it was clear that PayPal had become too big to be anyone’s subsidiary. In that year, eBay spun them off, and PayPal has been an independent company — with numerous subsidiaries of its own — ever since.
When you become as big as PayPal as quickly as they did, trouble is guaranteed to follow. This will be due both to growing pains as well as becoming a target for snipers. In the case of PayPal, trouble and controversy have been dogging them virtually since the beginning.
Aside from ongoing and never-ending controversies over frozen accounts and whether they do business with legal or ethical businesses, there have been a number of more substantial concerns over their security and dispute policies.
One prominent case involved 150,000 cardholders in Spain having their accounts temporarily frozen in 2015 due to an apparently fraudulent unauthorized $15 PayPal charge being made to each of them. That amounts to a theft of $2.5 million, a matter that took PayPal months to resolve.
Additional controversies have arisen over the years over PayPal’s acceptance and/or blocking of payments to porn and gambling sites and fundraising sites for human rights activists and accused criminals (who may be the same people in certain circumstances).
If you are experiencing a dispute over a product or service that you purchased, the good news is that a dispute resolution service is, in fact, available through PayPal. A number of limitations and caveats do apply, however. So make sure you follow the fine print to ensure your case qualifies.
First of all, only commercial purchases can be disputed. Personal payments sent as “Family and Friends” do not qualify for any sort of formal resolution. So if you’re having an argument with someone you know over the money you sent them, not for specific goods or services, you’ll have to work it out amongst yourselves.
Speaking about working it out amongst yourselves, even if your dispute is for a commercial transaction, PayPal strongly recommends contacting the merchant privately to attempt to settle it amicably before escalating to official channels. This is good life skills advice in any case; if you can settle matters without involving the authorities, it will generally be a happier, smoother, and less costly situation for all involved. Consider collision insurance claims as an example of this principle.
In order to inform your merchant of the dispute and make your attempt to work it out, you should go into your PayPal account and find the “Resolution Center.” Please note that due to an idiosyncratic rule of theirs, you won’t be able to accomplish this task from PayPal’s mobile app; rather, you will need to log in from a web browser.
Furthermore, you will need to pay attention to timeframes. Primarily, you have 180 days from the payment in order to open a dispute with the Resolution Center.
The next step is to click on the “Report a Problem” link and choose the relevant reason for your dispute. These include not receiving what you paid for, receiving a product or service that was different from what was promised, or a billing issue. The system will then connect you with the merchant to begin your communications. You have up to 20 days to negotiate with the merchant before you must either escalate the dispute or it automatically closes.
If working things out with the merchant turns out to be impossible, that is when PayPal’s official claims system becomes available to you. You can make use of it by clicking on the “Escalate to PayPal” link in the Resolution Center. (As before, this must, for some reason, be done through a web browser, not the mobile app.) Any evidence you may possess in favor of your claim should be uploaded at this stage before submitting your claim.
PayPal suggests that these claims are typically settled within two weeks but warns that up to a month is still reasonable and does not even commit to any upper hard limit to the time within which it must reply to you. When they do come to a decision, however, it is final.
Did you pay with a credit card or debit card? Bank wire? Cryptocurrency? Let’s get your money back!
Venmo is a subsidiary of PayPal and among the most popular mobile payment services in the world, though it is currently only available in the United States. Originally conceived as a peer-to-peer digital cash transfer service, refunds and disputes were not possible.
In 2016, Venmo began offering its platform for consumer purchases, making dispute resolution a necessary service. It remains surprisingly primitive, however. If you are in the midst of a Venmo commercial payment dispute (as with PayPal, non-commercial money transfers are ineligible for refunds), you are instructed to contact the merchant on your own to attempt to resolve it. In the event you are unsuccessful, you need to send Venmo an email at support@venmo.com detailing the nature of your dissatisfaction, and they promise to look into it. They do not, however, promise any sort of solution. Again, the primitiveness is amazing for such an advanced system and such a big corporation.
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