There is a common sentiment among PayPal’s detractors: if you haven’t had any problems with the online payment processor yet, just wait awhile, and you will.

Count me among them. I’ve been an account holder since at least 2002 (probably earlier; I don’t recall anymore), and until the beginning of this year, I never once had a problem with the service. Then things turned sour really fast.

• They’ve “frozen” my account¹ four times since January, including once while I was out of the country on a vacation.
• Their address verification system sent a series of $1 “probe” charges to my Compass Bank checking account, prompting Compass to decide to freeze that account² (there was a balance in the account; this wasn’t a typical bounced check cascade that most Compass Bank victims complain about).
• Transfers from banks can not only never be canceled once initiated, but they’re automatically attempted a second time even if they’ve been notified that it will fail and will cause the bank to issue a double “NSF” charge³.
• They’ve begun forcing people with verified bank accounts to make payments via the obnoxious “eCheck” system instead of instantly.
• A recent eCheck that was sent to me mysteriously went from requiring 3-4 business days to clear to 20 calendar days to clear, without explanation. It is a domestic transfer (the sending account is a U.S. account holder drawing U.S. funds from a U.S. bank). The money left the sender’s account a day after the payment was sent — PayPal’s now just sitting on that cash and plans to keep it for another two weeks(!).
• Their electronic and telephone support personnel are utterly useless in resolving (or even explaining) any of these issues. PayPal’s response to the perfectly legitimate question “where is the money you pulled from my client’s bank and why will this domestic eCheck take three weeks to clear?” was “it’s not our problem, contact the buyer’s bank.”

Like so many others, there’s a little scale in my mind that carefully weighs the convenience of the service versus the complete and utter pain in the ass actually using the service. Learning that PayPal was ultimately responsible for screwing up my old checking account at Compass Bank was the point that brought the scale to “even.” The cascade of events that followed was ultimately corrected (with Compass Bank actually refunding the fee my new bank hit me with for the returned check(!) and fixing the account), but that’s not something I want to deal with again.

The eCheck was the final straw. The payment itself was made 5 days late by the client I was billing (through a miscommunication, the due date was somehow lost in the shuffle), and the original “expected clearing date” of October 1 was barely acceptable. That amounted to a 4 business day lag. Now it’s bumped to October 15th, without explanation. Compass Bank actually did this to me as well, holding a deposit for nearly a month before releasing the funds for use; now PayPal wants a turn (remember, once the money actually arrives in my account at PayPal, it’s another 3-4 business days for that money to land somewhere I can actually use it).

I’m finished with them both. Compass Bank also has a plethora of complaints about its behavior, though that’s mostly related to its scummy method of reconciling and crediting deposits and debits in an unusual order that’s specifically designed to maximize the opportunity to bounce checks and collect NSF fees. My complaint is different — no notice from the bank regarding the problem with the account, and it took days of phone calls and runaround to get anyone to even explain what was wrong. Another few days of waiting (and a faxed verification of the fee from my new bank) was necessary to get a refund for the error. Its decision earlier in the year to hold a $3,000 deposit for nearly a full calendar month (not kidding) was pretty bad, too. They’re just first-class fuck-ups all around.

As far as PayPal is concerned, the inconvenience and delays involved in dealing with them along with their hand in launching errors and screwups at other financial institutions makes them completely worthless. It is genuinely faster to have domestic clients send paper checks or money orders via the regular postal service than it is to do even the supposedly “instant” payment thing via PayPal. The bottom line is if I want cash in my bank account, PayPal automatically adds 4 days to the process. The mail beats that. A check landing in my bank (a credit union) clears that day and is available for withdrawal the next.

PayPal and Compass are both commercial entities — their motive is profit. Unfortunately, like most other commercial interests in the United States, they’ve taken the extremist attitude that the individual customers don’t matter, because there are always more.

Compass won’t be sorry to see me go. My account with them was a simple “free checking” account that earned them little money (I rarely used it, so I kept little in it). PayPal will also undoubtedly be unaffected by my departure, though I can say I definitely used them more than Compass, and they’ll probably miss that cash flow a bit. Oh well.

They can both go find new victims. I’m done

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