Why I avoid Paypal, and you should too

Hand holding a ball or money

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Back in the day, Paypal was pretty sweet. Send money anywhere in the world, with just an email.

I have an account. You probably have one too.

But here’s why I’m closing mine and will avoid Paypal in the future.

How Paypal Ruined My Day

Last week, my wife tried paying one of her service providers with her credit card.


No error message, just payment failed. Again and again.

Do I have to mention, this service provider only processed credit cards via Paypal?

After an hour on the phone with Paypal, it turns out the credit card was attached to someone else’s account. What? Someone stole our credit card and is using it on Paypal?

Sure enough. But it turns out that someone was me.

Pardon me while I bang my head against the wall a few times.

As it turns out, if you have ever used a credit card to pay a vendor via Paypal, even if you don’t have a Paypal account, the email address and credit card you used to make the payment are PERMANENTLY stored by Paypal.

But wait, it gets worse.

Paypal has a policy that any credit card number can only be associated with a single email address. Do you see the problem yet? My wife and I have a joint credit card – different physical cards, different names on the cards, same credit card number, same account. So I must have paid for something using our joint card first, and Paypal permanently linked that card to me. When the missus tried to make a payment with her card? Denied!

Bad enough? Oh, not by a long shot, here comes the pain.

It’s impossible for either of us to remove this credit card number from our account ourselves, since we don’t have Paypal accounts, and we never asked Paypal to store this information for us.

So how do I remove my credit card number from this double-secret Paypal account? You call Paypal, wait on hold forever and a day, and then answer a series of multiple choice questions generated from your credit report to verify that you are who you say you are. How in H-E-double hockeysticks does Paypal have access to my credit report considering I never gave them my Social Security number? Disturbing on too many levels to contemplate, but that’s a topic for another day.

Long story short, we won’t be using Paypal again if we can avoid it. And I recommend you avoid them too.

More Reasons To Avoid Paypal

The interwebs are full of Paypal complaints. The majority seem to be

  • Fallout from seller / buyer disputes
  • Bullying their customers
  • High services fees, e.g. 3.4% for the transaction plus a 4% currency conversion charge if relevant

When many Paypal users recommend you never leave any excess funds in your account because you never know when Paypal might seize it, that raises a huge red flag as well.

Not to belabor the point, if you want to details of Paypal abusing their customers in their own words, you can check out the PayPal Sucks website, the NoPayPal Facebook page or do a web search for Paypal complaints.  Be warned – there are a LOT of them.

Paypal Alternatives

Fortunately for us, in today’s competitive digital world there’s always someone else.  So what are the alternatives to Paypal?  I’m still investigating my options, but so far Skrill looks most interesting.  Companies that provide ways to make payments either to people or companies are

  • Facebook Messenger
    • That’s right, you can send money for free to your friends using the largest social network in the world
  • Google Wallet
    • Pay from your credit card or bank account, and use your phone to make payments via NFC
  • Square Cash
    • Mobile app to transfer cash from your bank account to someone else
  • Skrill
    • Make online payments and transfer money worldwide

Of course, if your a vendor looking to switch from Paypal to another payment processor, there are many options here as well.  In addition to Google Wallet, there’s

Check back for reviews of the individual payment processors in the future.

Avoid Paypal

Clearly, there are many reasons you want to stop using Paypal.  Join me, and many others, in closing your Paypal account, and stop using Paypal for making online payments.

So many complaints against them.

So many viable alternatives.

What are you waiting for?

Have your own Paypal horror story?  Have a recommendation for an alternative, or another payment provided not mentioned above?  Leave a comment and tell us all about it.

Image of hand holding a world of money courtesy of Pixabay.


  1. Don’t have a Paypal horror story myself but have been happy with their ease of use. Not so happy with their fees though. Still, if you want to start accepting CC and other payment methods it’s still one of the easiest and biggest payment processing companies out there. Thanks for sharing.

    • Welcome, DivHut!

      I agree, PayPal is the largest, but often going with the gorilla in an industry means you end up getting hurt. Lots of alternatives, for example, Stripe has their own Checkout system, not to mention multiple WordPress plugins for simple integration. Plus they take bitcoin and other payments besides just debit and credit cards.

      As always, explore your options to make sure you’re using what’s right for your situation, not just what’s most popular.

  2. I use PayPal as a consumer and so far I’ve had a good experience, but your story is definitely troubling as the joint credit card issue must come up often. I recently took a cab and paid with my credit card. A bit later I received a PayPal e-mail receipt with a strange name on it and had to piece together that the card I used was attached to a PayPal account, and the driver must have used PayPal to process the payment. It was all a little “big brother” to me.
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    • I hear you.

      While we live in an amazing digital age, we definitely sacrifice some of our privacy and liberty to enable these marvels.

      The most troubling is when it happens without your knowledge, like your cab ride.

    • Hi Sam,

      Sounds like you’re taking about merchant card processing fees.

      I’ve read good things about EMS -http://plusbyems.com – they charge 2.2% for swiped transactions. Some processors charge less if you pay an initial fee, like Spark – https://www.sparkpay.com/sellinperson/pricing – 1.95% with a $9.95 monthly fee.

      What’s best for you will depend on your sales volume and composition. But if stay with those. I also hear Intuit has a card processing solution that some people like.

    • The business practices used by so many companies these days leave me perpetually amazed. More and more it becomes whatever you can get away with rather than whatever is in the best long term interests of the company and the customer.

  3. Yeah I have a rough time withdrawing funds from my paypal account (i.e., friends owe me money and send it via paypal then it takes me 3 months to withdraw because of limits). Also, I don’t get any credit card points using paypal. Good post – boycott Paypal!

    • So many people use PayPal despite their poor service, mainly due to inertia. They are so many good alternatives out there now, that it’s worth making the change now to get better service and lower fees.

    • Glad to hear not everyone is having problems with PayPal. Given the volume of complaints I’ve seen online, it sounds like the longer you keep using them, the more likely you are to have problems.

  4. it sounds like the longer you keep using them, the more likely you are to have problems.

    100% correct 🙂 Avoid them as much as you can , i am top rated ebay seller and they put 21 days payment held without any reason .

  5. PayPal is a fraud, their high fees should be a crime. This company is not for small businesses. Their policy is full of discrepancies and very discriminatory. They limit sellers’ accounts for selling a particular item and they allow it for other sellers who sell the SAME damn item.

    They confiscate sellers money for 180 days while making interest on it. It is not worth it for a seller nor a consumer. Remember PayPal recently allowed so many fraudulent orders from fake accounts, they marked the orders “OK to Ship” and eligible for “Seller Protection”, then they stiffed the sellers for those fraudulent orders. Credit cards get stolen easily on PayPal. Bad company all around.

    • The more I learn about PayPal, the more I want to avoid them.

      It’s a given that the more users a service has, the higher the volume of complaints will be, but still it’s a cause for concern.

      I’m grateful there is still competition on the Internet, and we have PayPal alternatives. I just wish more people would use them.

  6. PayPal is one the most crooked companies i’ve ever encountered. I just had an hour or so long phone call with them and my bank today, about PayPal lying about holding funds. They took over $500 out of my account for a payment but claim it won’t clear for 9 days. So I made a three way call between my bank and PayPal and even my bank told them that sounds illegal. This company lies about so much it’s not even funny. One of their biggest lies is about holding funds. They’ve created this lie to be able to hold on to customer’s money so they can profit from gaining interested, before charging 3.9%. Rarely does their customer service dept. even assist anyone, they usually transfer you around for hours until you give up, or just ramble and repeat generic responses because they don’t know the answer. Also the answers change with every phone call. You can literally hang up and callback and get a different response every time. If you’re wondering who to fight PayPal contact your State Regulator. Here’s a link to PayPals website showing the licenses for every state in the US. Contact these departments if you feel PayPal is doing something crooked.


    • Thanks for the tip on the licensing agencies. I hadn’t considered that approach before, just the usual consumer complaint routes – BBB, state consumer affairs agencies, and local news.


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