How I survived after PayPal froze my merchant account

How serious was it?

You’re looking at a tough situation where someone is taking all your profit, and 20-30% is what you’re making online if you’re lucky. A lot of cases we make even less as compared to a lot of retailers. So we were in a situation where they were holding seven or eight thousand dollars, and we just couldn’t touch it. It could have put us out of business.

And so how did you start talking with PayPal?

To be fair, we had a really great account manager at PayPal. But a lot of the problems with these types of organisations is that they’re very top heavy, and they have all these rules in place. And to get a decision out of them is very hard and you end up getting stonewalled by the people who are at the lower ranks.

So what did you do?

We took them to the Australian Competition and Consumer Commission. We’d already had a story on A Current Affair about eSold, just generally about the business. So we contacted them, and they said they were possibly interested in doing a story in that as well. So we spoke to PayPal, just explained that at the rate things were going they were putting us out of business and that we had lodged an ACCC complaint. It brought them back to the table.

The hard thing was we couldn’t even process transactions for about a week. I’ve talked to a few people in the industry and they’ve had a similar thing happen.

That’s a fairly drastic move. What happened next?

We ended up speaking to people in the United States, and these are people running things in the organisation. It’s easier if you get to talk to them, and eventually we were able to. We had to go to the top to get something done, and now we’ve proven ourselves they take very good care of us.

It’s good that it’s all sorted out. What do you think is the biggest lesson you learned during that whole period?

I’m not going to point the finger at PayPal. The banks knocked us back and PayPal actually gave us a chance. We had to fight them tooth and nail to get what we needed, but if you have the determination you can get to the top. You can’t just ask the person at your level because they’re not going to know anything.

So my advice is to be resourceful. At the end of the day, a payments company like this is going to be large and they’ll stonewall you. The banks are the same. You just have to be persistent.