What are RAP and WSOplus affiliate platforms going to do?

14 years ago

I know of one that is in development and a few other options that are coming to light. There will always be more than one way to skin a cat... if you're into cat skinning, at least.

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TheKeys

14 years ago

Originally Posted by bretski

I know of one that is in development and a few other options that are coming to light. There will always be more than one way to skin a cat... if you're into cat skinning, at least.

Very well said indeed.

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Jill Carpenter

14 years ago

Not every WSO is MMO.

Some are tools you can use. Some are templates. Some are services.

I would guess that possibly other payment options will be added - but you'd have to contact warrior plus about that.

Thanks

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JohnMcCabe

14 years ago

Originally Posted by ncmedia

Cats having nine lives and all, that sounds pretty messy.

Roll the skinned cats in a little corn meal and deep fry them. Throw in some hushpuppies and a little coleslaw. Top it off with plenty of cold barley pop, and the mess is worth it...

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Sam England

14 years ago

Originally Posted by bretski

I know of one that is in development and a few other options that are coming to light. There will always be more than one way to skin a cat... if you're into cat skinning, at least.

Originally Posted by JohnMcCabe

Roll the skinned cats in a little corn meal and deep fry them. Throw in some hushpuppies and a little coleslaw. Top it off with plenty of cold barley pop, and the mess is worth it...

I tried that and as you can see...it didn't work...

Pictures don't lie man...

What's next?

Thanks

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tpw

14 years ago

Most systems are already integrating other payment processors, but that simply ignores the context of the real problem that PayPal sees with most of the affiliate programs.

They do not have too much issue with the MMO, although that is kind of dicey.

The major issue they see is with the relationship, or more importantly, the lack of contractual relationship between the vendor and the affiliate.

If an affiliate is paid immediately, and the customer wants a refund, who is going to enforce that refund? If the affiliate is a dirty dog and does not want to do the refund, PayPal might be left holding the bag for the financial responsibility of a deal gone wrong.

Yep, I would not want to be in that position either...

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Tom B

Banned 14 years ago

Originally Posted by tpw

Most systems are already integrating other payment processors, but that simply ignores the context of the real problem that PayPal sees with most of the affiliate programs.

They do not have too much issue with the MMO, although that is kind of dicey.

The major issue they see is with the relationship, or more importantly, the lack of contractual relationship between the vendor and the affiliate.

If an affiliate is paid immediately, and the customer wants a refund, who is going to enforce that refund? If the affiliate is a dirty dog and does not want to do the refund, PayPal might be left holding the bag for the financial responsibility of a deal gone wrong.

Yep, I would not want to be in that position either...

That makes no sense to me, Bill. Paypal will always be on the hook no matter who is taking in payments. That is why they incorporated measures to insure people are whom they say, having bank accounts attached as well as credit cards.

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tpw

14 years ago

Originally Posted by Thomas Belknap

That makes no sense to me, Bill. Paypal will always be on the hook no matter who is taking in payments. That is why they incorporated measures to insure people are whom they say, having bank accounts attached as well as credit cards.

You are right. They are always on the hook, no matter who took the money.

While vendors tend to be quick to grant refund requests, affiliates are not always so quick to honor such things. I have seen it with certain affiliates in Warrior Plus, and I know of other people who have had issues with getting affiliates to give requested refunds.

Vendors are usually pretty quick about granting refunds. Affiliates, not so much.

If too many affiliates refuse refunds, the number of charge-backs requested through the Credit Card companies are bound to rise. And while PayPal passes that charge-back to the person who received the money, I strongly believe that when charge-back requests reach a certain threshold, then PayPal's credit risk goes up with JP Morgan and whomever else actually holds PayPal's purse strings.

My position is that PayPal is leery of any setup that encourages less-than-honorable affiliates to participate in the system, leading to the potential fall-out from affiliates who don't feel obligated to return any money received.

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Tom B

Banned 14 years ago

Originally Posted by tpw

You are right. They are always on the hook, no matter who took the money.

While vendors tend to be quick to grant refund requests, affiliates are not always so quick to honor such things. I have seen it with certain affiliates in Warrior Plus, and I know of other people who have had issues with getting affiliates to give requested refunds.

Vendors are usually pretty quick about granting refunds. Affiliates, not so much.

If too many affiliates refuse refunds, the number of charge-backs requested through the Credit Card companies are bound to rise. And while PayPal passes that charge-back to the person who received the money, I strongly believe that when charge-back requests reach a certain threshold, then PayPal's credit risk goes up with JP Morgan and whomever else actually holds PayPal's purse strings.

My position is that PayPal is leery of any setup that encourages less-than-honorable affiliates to participate in the system, leading to the potential fall-out from affiliates who don't feel obligated to return any money received.

I don't quickly grant refunds. I normally refund them within 2 weeks. Boy does that make the serial refunders mad. haha

Besides, there is no way for paypal to know who the affiliate is and who the vendor is.

If Paypal had a problem with affiliates, they wouldn't have created a way to split payments through their api.

Thanks
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tpw

14 years ago

Originally Posted by Thomas Belknap

I don't quickly grant refunds. I normally refund them within 2 weeks. Boy does that make the serial refunders mad. haha

I do that sometimes too. I do quickly refund most people, but if there is something fishy about the request, I will wait...

Originally Posted by Thomas Belknap

Besides, there is no way for paypal to know who the affiliate is and who the vendor is.

While that seems a good argument, I cannot accept it at face value.

They can see who wrote the offer, and they could very well deduce by the "identity information" they have on file who the vendor is and who the affiliate is.

And they very likely know what the referring page was, due to internal record keeping.

Granted, those referring URLs tie back to WarriorPlus in a lot of cases, but even the internal coding of that URL can be interpreted I believe -- although I have not tried.

And we do know that Allen Says and Mike Lantz both had a pow-wow recently with PayPal over this very issue. I would have loved to been a fly on the wall during that discussion.

Originally Posted by Thomas Belknap

If Paypal had a problem with affiliates, they wouldn't have created a way to split payments through their api.

This is one area where we definitely agree.

They were noticing problems with the original rotating-payment model and they probably had issue with it.

So they stepped up to the plate to create a version that offered them the ability to simplify the tracking on future affiliate transactions. I have looked at their API and their two-choice option looks to be a sound model for them to use.

As far as the other suggestions in the thread about wild financial claims and work from home, the first is against FTC guidelines which I am sure PayPal is careful to watch, and the second is against the PayPal TOS.

Both are a real issue, and I agree that most people who have stepped into crap with PayPal were probably doing shady things, but when they come to the forum to complain about getting their PayPal accounts frozen or locked, I am sure they are often only telling us the part of the story that makes PayPal look evil, without telling us the things they did to step in doo-doo in the first place.

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GarrieWilson

14 years ago

Originally Posted by tpw

As far as the other suggestions in the thread about wild financial claims and work from home, the first is against FTC guidelines which I am sure PayPal is careful to watch, and the second is against the PayPal TOS.

Work from home isnt against PayPal TOS. Get rich quick is. There is a difference.

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tpw

14 years ago

Originally Posted by GarrieWilson

Work from home isnt against PayPal TOS. Get rich quick is. There is a difference.

I will have to go digging again. I am sure I saw work from home in their forbidden activities.

But if I am wrong, I am wrong, and I will admit it.

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GarrieWilson

14 years ago

Originally Posted by tpw

I will have to go digging again. I am sure I saw work from home in their forbidden activities.

But if I am wrong, I am wrong, and I will admit it.

https://cms.paypal.com/us/cgi-bin/?c...locale.x=en_US

has:

3.relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other "get rich quick" schemes or certain multi-level marketing programs, (c) are associated with purchases of real property, annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card, (d) are for the sale of certain items before the seller has control or possession of the item, (e) are by payment processors to collect payments on behalf of merchants, (f), are associated with the following Money Service Business activities: the sale of traveler's checks or money orders, currency exchanges or check cashing,or (g) provide certain credit repair or debt settlement services

Work from home use to be listed but was removed years ago.

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tpw 14 years ago

Originally Posted by GarrieWilson

https://cms.paypal.com/us/cgi-bin/?c...locale.x=en_US

Thank you for digging that up for me.

I was wrong.

Originally Posted by GarrieWilson

Work from home use to be listed but was removed years ago.

See, I wasn't totally out in left field, just not up-to-date.

p.s. I will drop you a Thanks tomorrow when I have some to give again.
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ExRat

14 years ago

Hi Garrie/TPW,

Originally Posted by GarrieWilson

3.relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other “get rich quick” schemes or certain multi-level marketing programs...

I received an email about policy updates not long ago which become effective on September 7th.

I'm in the UK, but as far as I can tell, it isn't country specific.

If you sign in to paypal and click on 'policy updates' on the right, then scroll down to section 9ish -

“9.1 Restricted Activities. In connection with your use of our website, your Account, or the Services, or in the course of your interactions with PayPal, a User or a third party, you will not:
…
n. Cause PayPal to receive a disproportionate number of Claims that have been closed in favour of the claimant regarding your Account or business;
…
q. Allow your Account to have a balance reflecting an amount owing to us;
r. Undertake activity that does or may present to us a credit or fraud risk, a sudden increase in exposure, or a significant or otherwise detrimental level of exposure (as PayPal reasonably believes based on the information available to it);

(emphasis by me)

IANAL

It looks to me like they may be widening the scope of their policy to cover getting rid of clients who are a general risk.

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CDarklock

14 years ago

Originally Posted by GarrieWilson

Work from home use to be listed but was removed years ago.

"Work from home" was listed as recently as last month. I directly copied and pasted it from their policy to a Skype conversation during an argument just like this. Last week, I went to do the same thing and it says "get rich quick" instead. I don't know WTF is going on, but there's a reason people think they saw it... because they did.

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GarrieWilson

14 years ago

Originally Posted by CDarklock

"Work from home" was listed as recently as last month. I directly copied and pasted it from their policy to a Skype conversation during an argument just like this. Last week, I went to do the same thing and it says "get rich quick" instead. I don't know WTF is going on, but there's a reason people think they saw it... because they did.

It has said get rich for me for a long time. That's why I knew about it.

If you used Google to find the TOS, it takes you to an OLD one for some reason.

However, the "work from home" when it was labelled "business opportunity" was only not allowed if you charge 500 or more because of some federal law.

-g

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VanessaB

14 years ago

Ok.. I have spent every single day this week corresponding with PayPal on these issues. I have spoken with them privately on the phone, I called them live during my TalkMarketingNow show on Wednesday where at least 28 people got to listen and hear the answers PayPal gave, and I have been trading emails with PayPal since Wednesday as well.

Monday- I spoke with "Aaron" in Merchant solutions, via phone, who did confirm that instant affiliate commissions do in fact increase liability for everyone, including PayPal, and who recommended that I not use them. Disclaimer: He never heard of RAP, W+, Digi, or WP-IP.

Tuesday- I spoke with Merchant Solutions and Limitations, and even the development team, to request information whether or not my own account would be at risk if I engaged these solutions. The representatives I spoke with from both the Merhcant Solutions Department and Limitations departments were both, again, unaware of RAP, W+, Digi, or WP-IP. The representative from Merchant Solutions advised that the Adaptive Payments API was not created for 'instant affiliate commissions' but for 'split payments' such as the "Fiverr" set up. The representative from the development team could only explain the process to me, not the risk associated with it, and hence suggested I go back to Merchant Solutions or Limitations.

Wednesday- The phone call LIVE on TMN... everyone heard PayPal 'flim flam' on the issue. We spoke with at least 4 different people, who at least 3 of first told us not to engage in any instant affiliate payment solutions, and upon requesting that they confirm that that was their advice, then back pedaled and said they could not advise. The last person we spoke with suggested I email my questions to aup @ paypal.com. Which I did.

In the interest of saving space, I'm just going to copy PayPal's replies as my questions are noted in them... *note: I used my personal email address to request information, which is not my PayPal email address. However, my personal email address does have a 'user profile' on our business PayPal account.

*Also, I am unsure about any liability to myself if I include the names of the 'reps' that responded to these emails, so I've removed them, although none of them give last names, and there is no way to get this department, Brand Risk Management, on the phone, unless they call you.

************************************************** ******

Thank you for contacting PayPal, we have attempted to unsuccessfully
reach you by phone.

I will answer your questions in the order received.

1) Are merchants using Warrior Forum or Warrior Plus, at a greater risk
of having their accounts frozen?

Answer: No, we do not enforce our policies based on the forum or site
being used.

2) Please tell me, yes or no, if I am at greater risk of having my
account reviewed, limited, or frozen if I use any 3rd party affiliate
solutions that offer instant PayPal payments to affiliates.

Answer: Without knowing what the affiliate program is, we cannot provide
you accurate feedback to this question.

3) Scripts that 'rotate' the PayPal email addresses to pay
vendor/affiliated (again, sometimes called 'equity partners') in
rotation

Answer: PayPal does not allow its services to be used for these types of
programs.

4) Can you please tell me if this could be regarded as a violation of
PayPal's Terms of Service Term that a merchant may not accept funds on
behalf of another merchant?

Answer: This could be a violation of the User Agreement but without
knowing specifics we cannot provide you accurate feedback to this
question.

5) What does PayPal consider "rich'?

Answer; "Get rich quick" schemes ? Include any type of self-employment,
start-up business, or investment opportunity where the claims of profit
or returns on investment are unrealistic or unsupported.
Here is a link to the list of factors we use to determine pyramid,
matrix, and multi-level marketing programs.

https://www.paypal.com/helpcenter/main.jsp;jsessionid=Xx52Mr3h9TmFTngJstcDKlShhv52yT wvhZZ8dYbc9nyYG2LBvm1x!-1885298273?locale=en_US&_dyncharset=UTF-8&countrycode=US&cmd=_help&serverInstance=9014&t=s olutionTab&ft=browseTab&ps=solutionPanels&solution Id=39030&isSrch=Yes

To learn more about the Acceptable Use Policy, please refer to our Help
Center page here: https://www.paypal.com/us/cgi-bin/helpweb?cmd=_help

If you have any additional questions, please feel free to contact us
again at aup@paypal.com
Sincerely,

************************************************** ******

As to Question #2, I had listed the 4 (RAP, W+, Digi and WPIP) specifically IN the first email, and here their answer says 'without knowing.'

PayPal's answers to #3 and #4, seem to conflict.

Answer #5 was about the only useful bit of information given.

So I pressed on, and sent another email once again, specifically requesting information on those 4 specific affiliate solutions, and once again, instead of giving me a straight answer regarding those solutions.. PayPal's reply was to search out my 'offer' and tell me that MY PRODUCT doesn't violate their TOS.

(No S**T Sherlock. I'm not asking about my PRODUCT, I'm asking if the AFFILIATE SOLUTION I'm using violates the TOS...)

So I sent yet ANOTHER email, which said:

"Thank you for the reply however it is not MY product I'm concerned with violating TOS. I'm concerned with whether or not certain features of the 4 different email solutions I mentioned are violating the TOS thus putting my own (future merchant solution account) at risk. I understand you have tried to call. If it is possible for you to call me back at 3pm EST today Friday, June 15, 2011, I can make sure I am available to answer the phone.
Thank you,
Danielle"

And HERE is their last reply....

************************************************** *****
Thank you for contacting me regarding your concern with future business
ventures.
Based on the information/websites provided, and the affiliate programs
on these sites, these services would be a violation of our Acceptable
Policy.
Thank you again for contacting us and if
you have any questions, please contact the PayPal Brand Risk Management
Department at aup @ paypal.com
Sincerely,
************************************************** ******

Now, all of these solutions are still operating, and many merchants using them have not been limited or frozen.... My opinion on this matter at this moment is that PayPal's 'flim flamming' on these issues is enough to warrant serious suspicion, and risk management measures including diversification.

Brian, to answer your question about the risks of using other solutions... here they are:

You have to rely on a 3rd party affiliate management solution that has a 'common affiliate' program and supports multiple payment processing solutions.

The three I know of that do this have different features, limitations and price points.

GetDPD is the top contender, supporting 5 different payment processors, 3 of them (PayPal, Google Checkout and AlertPay) are free, and the other two are Clickbank and 2Checkout which have fees. You can also pay affiliates 'daily' 'weekly' or 'monthly.'
GetDPD's lowest priced plan for using their system is $5 a month an increases by the amount of products and storage space used.
Biggest drawback is that they don't support recurring billing or membership sites. There are probably workarounds for at least the membership site through use of an auto responder, but not recurring billing unless it's an 'off affiliate site' upsell. And I think you'll have to issue 1099's, though I'm not 100% sure if they have any support for that.

Second Place is PayGear. PayGear is totally free, supports recurring billing and membership sites, even gives you free membership software, offers one click upsells, one click affiliate payments, (and can pay them weekly if you have a certain PayPal plan, you'll have to look at their WSO, I can't remember it off the top of my head), and even handles the 1099 reporting for you and issues them electroncially to both affiliate and vendor. Biggest drawback is that they only support 3 payment processors, PayPal, Google Checkout and Authorize.net.

Ejunkie comes in third place, supporting 5 payment processors, 2 of them free, (PayPal and Google Checkout) 3 of them paid at various pricepoints (2Checkout, Authorize.net and Clickbank.) No recurring billing, no membership sites, have to pay affiliates monthly via mass pay file, and no 1099 support.

The affiliate solution controls your affiliates, however all 3 of the abovoe allow you to communicate directly with your affiliates via their email addresses which you have access to.

The affiliate solution could ban you, as just happened with Plimus and IM Niche products. There are 3 to choose from, if one should ban you, you still have your list of affiliates email addresses and can notify them if you have to change affiliate programs. There are also at least 3 other affiliate management solutions in development right now, that will offer multiple payment processor solutions.

You wont' be able to offer affiliates 'instant commissions.'

You may have to issue your own 1099's if you aren't using PayGear.

I hope that helps someone.

-Dani

Sid,
CD is not in possession of the emails as they have personal information regarding my own PayPal account in them, and therefore I will not forward them. Incidentally, I found it disturbing that they searched their database for that email address which is not an 'account holder' but merely a 'user profile', and then used that to find my 'product' when what I was questioning was whether or not my use of certain affiliate solutions would be a violation.

[Edit] At least two reps, from merchant solutions and limitations, on Tuesday and Wednesday during the call, did confirm that even with the split payments API, if a dispute or chargeback problem arose, they would go back to the original payee should their be no way to recover funds from the 'affiliate' if they had cleaned out their PayPal account and their back up funding source.

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CDarklock

14 years ago

Originally Posted by DanielleS

3) Scripts that 'rotate' the PayPal email addresses to pay
vendor/affiliated (again, sometimes called 'equity partners') in
rotation

Answer: PayPal does not allow its services to be used for these types of
programs.

That's the relevant bit as far as I'm concerned.

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VanessaB

14 years ago

"Thank you for the reply however it is not MY product I'm concerned with violating TOS. I'm concerned with whether or not certain features of the 4 different email solutions I mentioned are violating the TOS thus putting my own (future merchant solution account) at risk. I understand you have tried to call. If it is possible for you to call me back at 3pm EST today Friday, June 15, 2011, I can make sure I am available to answer the phone.
Thank you,
Danielle"

And HERE is their last reply....

************************************************** *****
Thank you for contacting me regarding your concern with future business
ventures.
Based on the information/websites provided, and the affiliate programs
on these sites, these services would be a violation of our Acceptable
Policy.
Thank you again for contacting us and if
you have any questions, please contact the PayPal Brand Risk Management
Department at aup @ paypal.com
Sincerely,
*****************

And...

[Edit] At least two reps, from merchant solutions and limitations, on Tuesday and Wednesday during the call, did confirm that even with the split payments API, if a dispute or chargeback problem arose, they would go back to the original payee should their be no way to recover funds from the 'affiliate' if they had cleaned out their PayPal account and their back up funding source.

Are the most disturbing to me... this basically says "NONE of the instant payment solutions are in compliance."

And I don't think PayPal is going to be dazzled by the 'fees' they're collecting, without seeing the liability that it exposes them to.

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Sid Hale 14 years ago

Yes, I agree. That's the "relevant bit".

Originally Posted by CDarklock

That's the relevant bit as far as I'm concerned.

The problem here is the use of the word "rotation" in the question that was posed to Paypal, and their response does not surprise me - given the wording of the question.

3) Scripts that 'rotate' the PayPal email addresses to pay
vendor/affiliated (again, sometimes called 'equity partners') in
rotation

The phrase "rotating payments" is often used in the discussion/explanation of multi-level marketing commissions, and given the limited description given by Dani in her question, was probably interpreted by Paypal in the broadest possible terms (in my opinion - there I go speculating, again).

Isn't that the way you would interpret the question in the very limited context in which it was posed? There is little doubt in my mind that someone in the "Risk Management Department", of any payment processing company would interpret such a question just that way.
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JennySweets 14 years ago

Complete no0b question here but, what is MMO in this case?

I can't get my gamer head off of "Massively Multiplayer Online" mode LOL

This is a very interesting, complicated thread to me. I am going to launch my first product within 2 months and will be looking for affiliate solutions. This is another wrinkle to figuring out what to do.. Thanks once again for all of the well researched information and thought out responses in here.
- Thanks
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- BIG Mike Banned 14 years ago
  
  [DELETED]
  
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  JennySweets 14 years ago
  
  Originally Posted by BIG Mike
  
  It means Make Money Online.
  
  Oh my *slaps forehead* Gosh, i can't believe I couldn't put that one together. Chalk another no-brainer up to add/lack of sleep! Thanks Mike!
  
  Thanks
  
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Mary25

14 years ago

Originally Posted by CDarklock

"Work from home" was listed as recently as last month. I directly copied and pasted it from their policy to a Skype conversation during an argument just like this. Last week, I went to do the same thing and it says "get rich quick" instead. I don't know WTF is going on, but there's a reason people think they saw it... because they did.

Well, these kinds of things is general on the internet and you have to go through it, if it is scam then you have to recognize and you have to focus on your main aim.

Thanks

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lkpub 14 years ago

Originally Posted by GarrieWilson

https://cms.paypal.com/us/cgi-bin/?c...locale.x=en_US

has:

Work from home use to be listed but was removed years ago.

Thanx for that clarification... I'm sure it will help a lot of marketers stay out of trouble... staying current with FTC and Paypal info can be difficult...

Linda =}
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RichardWing

14 years ago

Wow! I just got back from a week long trip and this is going to be a long night just on this thread I can tell.

To address part of this comment....

My position is that PayPal is leery of any setup that encourages less-than-honorable affiliates to participate in the system, leading to the potential fall-out from affiliates who don't feel obligated to return any money received.

Paypal doesn't know or care about the structure of an affiliate system unless it violates their MLM (multi tier tos)

Maybe it would be better if people understood that with RAP merchants there are "NO AFFILIATES" there are "RESELLERS"

RAP doesn't run an affiliate system it manages the rotation of multiple product owners or partners so to speak.

We have evolved a system over 4 years ago that did away with the typical affiliate system where the merchant collects all sales payments and then pays out an affiliate at a later date.

We designed a system where we (rap merchants) let an individual form a type of partnership with us and we share the profits (sales) with that partner/reseller. Our partnership with a reseller is typical of any partnership agreement in that partners receive a certain percentage of the profits. In our partnership/reseller agreement, it is based on your participation and efforts you bring to the partnership. i.e. the traffic you send to the product sales page. The merchants provides his/her share to the partnership too. The product, the hosting the support etc...

Another way to put it... When you sign up to promote a RAP product you are agreeing to share the traffic you send to the product site with the merchant.

A percentage of the time the merchant is the seller and the other times you are a partner/reseller of that product.

It's an agreement that you and the merchant agree to when you signup to promote that product.

Paypal doesn't know or even care what your arrangements are with your partners.

All they know is "YOU ARE THE SELLER" and the purchase is made from "YOUR BUYER".

Paypal already qualified you to sell and you are on the hook for the profits, fees or refunds of those transactions you were paid on as a partner/reseller.

They could care less who is "HOSTING YOUR PRODUCT" which is the arrangement you have with a RAP merchant. nothing more and nothing less. The merchant/partner is a hosting provider in a sense.

Even another way to look at it....

You are outsourcing (for free) for the merchant:

to set up the product "YOU ARE RESELLING"
provide pre and post purchase support for the product "YOU ARE RESELLING"
deliver the product "YOU ARE RESELLING"
in most cases cross promote to the buyers after the purchase of the product "YOU ARE RESELLING"

It's getting awfully old putting out all these fires! The sky "IS NOT FALLING!"

Paypal only cares that you as a merchant or a RESELLER of a product are complying with their terms of service.

If you resell a bad product, paypal doesn't care who set it up or is hosting it on YOUR BEHALF. To them you are selling a product outside their terms and you are subject to their punishment plain and simple.

AS WITH ANY RELATIONSHIP YOU SHOULD INVESTIGATE AND GET TO KNOW WHO YOU ARE GETTING IN BED WITH. ANYTIME YOU GET IN BED WITH SOMEONE THERE IS ALWAYS A CHANCE YOU WILL LEAVE WITH SOMETHING THAT CAN HAVE A NEGATIVE EFFECT ON YOU THE REST OF YOUR LIFE!

The real questions you should be asking is why there is only a handful of outspoken marketers that have been effected and what was the common thread as to why their paypal accounts were shut down. Go ask them directly.

Then ask yourself why is there 1000's of rap merchants who still have paypal accounts and selling 10's of thousands of products using the reseller business model.

Then ask yourself why is there still WSO Pro sales still actively being promoted and working without incidence daily, which adopted the reseller business model that we at RAP made so popular as well as a few new sales systems that were recently released.

Richard Wing
623-505-6302
skype - richardwing

Originally Posted by tpw

You are right. They are always on the hook, no matter who took the money.

While vendors tend to be quick to grant refund requests, affiliates are not always so quick to honor such things. I have seen it with certain affiliates in Warrior Plus, and I know of other people who have had issues with getting affiliates to give requested refunds.

Vendors are usually pretty quick about granting refunds. Affiliates, not so much.

If too many affiliates refuse refunds, the number of charge-backs requested through the Credit Card companies are bound to rise. And while PayPal passes that charge-back to the person who received the money, I strongly believe that when charge-back requests reach a certain threshold, then PayPal's credit risk goes up with JP Morgan and whomever else actually holds PayPal's purse strings.

My position is that PayPal is leery of any setup that encourages less-than-honorable affiliates to participate in the system, leading to the potential fall-out from affiliates who don't feel obligated to return any money received.

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tpw

14 years ago

Originally Posted by RichardWing

The real questions you should be asking is why there is only a handful of outspoken marketers that have been effected and what was the common thread as to why their paypal accounts were shut down. Go ask them directly.

You and I both know that when something happens, each side will have its own story to describe what happened and the truth is always somewhere in the middle.

Those who are outspoken victims of PayPal all claim perfect innocence. I have never bought into that, and if the question is only one of behavior, then I have no worries or concerns whatsoever.

In any situation like this, it could always be system or behavior as the cause of problems. I would be a fool to only look at one of the potential causes.

I am still not 100% comfortable with rotating pay, but I have been using it for years, and I will continue to use it in the future.

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tecHead

14 years ago

Originally Posted by tpw

Most systems are already integrating other payment processors, but that simply ignores the context of the real problem that PayPal sees with most of the affiliate programs.

They do not have too much issue with the MMO, although that is kind of dicey.

The major issue they see is with the relationship, or more importantly, the lack of contractual relationship between the vendor and the affiliate.

If an affiliate is paid immediately, and the customer wants a refund, who is going to enforce that refund? If the affiliate is a dirty dog and does not want to do the refund, PayPal might be left holding the bag for the financial responsibility of a deal gone wrong.

Yep, I would not want to be in that position either...

As much as I respect your opinions, this would make very little sense in regards to PayPal current API upgrades; as they've just made it possible, (when it was impossible before), TO pay affiliates immediately.

Nor, would they really be left holding the bag as they have immediate contracts with all account holders' banks. In the case of the scenario you pointed out, the main merchant on file (of that transaction) is the one held responsible in the case of fudging; which is really a secondary security measure; as the initial transaction is still LINKED to ALL parties involved.. the transaction still goes through PayPal's system.. they know who got what... and when... and can take it back... your bank will let them... then charge YOU if you didn't keep it in there...

The real problem (IMHO); as from what I've been told; is that JP Morgan Chase isn't willing to assume the amount of risk certain business models bring to the table. When transaction volume starts changing direction; those transactions start becoming liabilities.

Hopefully, PayPal will be able to continue to convince JP Morgan (and Wells Fargo too, I think) that the problem is still manageable on a case by case basis. Otherwise, yeah... we'll see a big SHIFT in who they allow to conduct business through their platform. And it will more than likely be a hatchet job and not a surgical strike...

PLP,
tecHead

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tpw

14 years ago

Originally Posted by tecHead

As much as I respect your opinions, this would make very little sense in regards to PayPal current API upgrades; as they've just made it possible, (when it was impossible before), TO pay affiliates immediately.

The original question was in regards to RAP and WarriorPlus, and to my knowledge, neither have yet incorporated the new PayPal API upgrades.

As you suggest, I do believe that any affiliate service provider that incorporates the new PayPal API model will overcome the current weakness in both of the above programs.

If either or both have already upgraded to the new PayPal API, then it would be news to me, and therefore mute my argument.

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CDarklock

14 years ago

Originally Posted by tecHead

As much as I respect your opinions, this would make very little sense in regards to PayPal current API upgrades; as they've just made it possible, (when it was impossible before), TO pay affiliates immediately.

This issue is not about "instant payments." It is about rotating payments. The kind RAP and WSO Pro do, where 50% commission means the affiliate gets paid 100% of the money on 50% of the purchases. PayPal have said outright that these programs are in violation of their terms of service.

These programs existed because PayPal did not have an instant affiliate payment method, and it may be a reasonably new development that PayPal consider the rotating-commission scripts outside the terms.

That said, I do not believe Mike Lantz has had any issues with PayPal, and he's almost certainly the single most frequent user of WSO Pro as an affiliate. Similarly, people are cheerfully using RAP and RAPBank without problems. So I don't know how accurate it is to say that PayPal will do anything if you use them, but they have said outright that they don't like these systems and consider them a violation.

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Sid Hale

14 years ago

Caliban,

I'd love to see you substantiate this - if you can.

Originally Posted by CDarklock

This issue is not about "instant payments." It is about rotating payments. The kind RAP and WSO Pro do, where 50% commission means the affiliate gets paid 100% of the money on 50% of the purchases. PayPal have said outright that these programs are in violation of their terms of service.

These programs existed because PayPal did not have an instant affiliate payment method, and it may be a reasonably new development that PayPal consider the rotating-commission scripts outside the terms.

That said, I do not believe Mike Lantz has had any issues with PayPal, and he's almost certainly the single most frequent user of WSO Pro as an affiliate. Similarly, people are cheerfully using RAP and RAPBank without problems. So I don't know how accurate it is to say that PayPal will do anything if you use them, but they have said outright that they don't like these systems and consider them a violation.

Oh! They have? Where???

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GarrieWilson

14 years ago

Originally Posted by CDarklock

This issue is not about "instant payments." It is about rotating payments. The kind RAP and WSO Pro do, where 50% commission means the affiliate gets paid 100% of the money on 50% of the purchases. PayPal have said outright that these programs are in violation of their terms of service.

Care to provide any proof of this?

PayPal had issues with forcing people to make two payments but I have seen no issues with splitting who gets the full payment.

Change "affiliate" to "partner" and it's the same thing just using different words. Partner is better because they are the seller, not an affiliate.

Garrie

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CDarklock

14 years ago

Originally Posted by GarrieWilson

Care to provide any proof of this?

Dani Shaeffer has an email from PayPal which says it in so many words: "These programs are against our terms of service."

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Sid Hale

14 years ago

Caliban,

Originally Posted by CDarklock

Dani Shaeffer has an email from PayPal which says it in so many words: "These programs are against our terms of service."

Sorry, but that's just not enough. There's no context there.

...and no, they aren't against their terms of service. That's a published document, and there is nothing that even remotely resembles that on Paypal's TOS.

Which programs? Forward a copy of the email... you have my address.

In fact, as a regular poster on the RAP Enthusiasts chat on Skype, I find it hard to believe that you have supposedly been in the possession of such information, without having said something there about it.

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CDarklock

14 years ago

Originally Posted by Sid Hale

Which programs? Forward a copy of the email... you have my address.

Programs which alternate payments to vendors and affiliates. I don't have a copy of the email. Dani has it. I'll ask her to forward it to you.

In fact, as a regular poster on the RAP Enthusiasts chat on Skype, I find it hard to believe that you have supposedly been in the possession of such information, without having said something there about it.

It is not exactly welcomed in that chat when people say something against the "party line" that RAP is awesome and everyone should use it; there's a lot of stuff I don't say in there for precisely that reason.

And if you look back over the past several weeks, I haven't been all that regular a poster. There's a reason for that, too.

Everything's polarised right now into people who make money with THIS kind of system, and people who make money with THAT kind of system.

Neither camp is giving a straight answer, and they're trying like hell to make the answer come out that they've been right all along, instead of actually getting the right answer.

Which, in general, disgusts me. I've got hundreds of dollars invested in RAP and RAPBank and WSO Pro, so yeah, I'd like that investment to stay valid into the foreseeable future. And I've told you myself that from a technical standpoint, RAP is designed exactly the way I think a commission system should be designed. So I'd really like this not to be the answer, too.

But if that's the answer, that's the answer, and no bones about it. Just like the people in California who would really like to be Amazon affiliates without having to incorporate out of state... but if that's what they've got to do, then they better had, and that's that.

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GarrieWilson 14 years ago

Originally Posted by CDarklock

Dani Shaeffer has an email from PayPal which says it in so many words: "These programs are against our terms of service."

One email isn't proof. An employee statement isn't proof. When it's in the TOS, that's proof and binding. Did Dani ask where in the TOS?

An employee told me I couldn't sell autoresponder software. Another said I could.

When I was limited, I used the TOS to get unlimited. They give guidelines about how they consider "get rich quick". My sites passed each guideline.

I also learned in that experience, the support people guess. They 1st said my blog that lists products was the violation. (it doesnt even have a PP button) Then said a MLM prouct was but it used CB.

Remember how people a few years ago said MRR violate PayPal TOS or that PayPal said it does but no real proof of it and its still going strong.

Garrie
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- CDarklock 14 years ago
  
  Originally Posted by GarrieWilson
  
  One email isn't proof. An employee statement isn't proof. When it's in the TOS, that's proof and binding.
  
  I didn't say it was proof. I said exactly what happened.
  
  If you want to fight with PayPal over whether it really is against their terms of service, great!
  
  But if I don't have to, I'd rather not.
  
  Like I said: nobody wants to change. I get that. I don't want to, either. But if I have to, I'm going to, and I'm smart enough to know who the 800 pound gorilla is in this game.
  
  Thanks
  
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  "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
  
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WillR

14 years ago

Originally Posted by tpw

Most systems are already integrating other payment processors, but that simply ignores the context of the real problem that PayPal sees with most of the affiliate programs.

They do not have too much issue with the MMO, although that is kind of dicey.

The major issue they see is with the relationship, or more importantly, the lack of contractual relationship between the vendor and the affiliate.

I don't necessarily agree with that.

The way Warrior Plus works is Paypal doesn't even know who is an affiliate or a vendor - there is no splitting of sale amounts. The splitting occurs on a transaction basis so the first sale goes to the vendor, the second to the affiliate, and so on - this splitting is calculated depending on the commission percentage that has been set.

This means Paypal has no way of knowing who is the vendor or the affiliate as two different people are being paid separately - they don't even necessarily know they are selling the same product or that their is any relationship between them. The refunds are also handled by the person to whom that sale was paid.

I think this problem has a lot more to do with outrageous income claims selling digital products and out of the ordinary sales volumes.

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BloggingPro

14 years ago

Originally Posted by tpw

Most systems are already integrating other payment processors, but that simply ignores the context of the real problem that PayPal sees with most of the affiliate programs.

They do not have too much issue with the MMO, although that is kind of dicey.

The major issue they see is with the relationship, or more importantly, the lack of contractual relationship between the vendor and the affiliate.

If an affiliate is paid immediately, and the customer wants a refund, who is going to enforce that refund? If the affiliate is a dirty dog and does not want to do the refund, PayPal might be left holding the bag for the financial responsibility of a deal gone wrong.

Yep, I would not want to be in that position either...

Oh Bill... stop posting thing that make absolutely perfect sense! I think our time and effort could be better utilized dreaming up some big conspiracy that PayPal simply doesn't want to be in certain industries anymore, and is OUT to get the little guy!

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Kevin_Hutto

14 years ago

Originally Posted by BloggingPro

Oh Bill... stop posting thing that make absolutely perfect sense! I think our time and effort could be better utilized dreaming up some big conspiracy that PayPal simply doesn't want to be in certain industries anymore, and is OUT to get the little guy!

Yeah, that's what i am doing here.

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BloggingPro 14 years ago

Originally Posted by Kevin_Hutto

Yeah, that's what i am doing here.

Oh I certainly didn't mean you, Kevin, I was just saying in general. Some good Friday night fun... wasn't looking to offend anyone.
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- Kevin_Hutto 14 years ago
  
  Originally Posted by BloggingPro
  
  Oh I certainly didn't mean you, Kevin, I was just saying in general. Some good Friday night fun... wasn't looking to offend anyone.
  
  No worries...
  
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christopher jon

14 years ago

Roll the skinned cats in a little corn meal and deep fry them. Throw in some hushpuppies and a little coleslaw. Top it off with plenty of cold barley pop, and the mess is worth it

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Sid Hale

14 years ago

Have you seen something we haven't?

Originally Posted by Kevin_Hutto

What are these affiliate platforms going to do now that it seems paypal is shutting down more MMO type accounts? Are there any plans to integrate other processors?

There is NO problem with the "affiliate platforms", as you put it. We're still here, and still processing orders using affiliates, Paypal, etc. Business as usual.

WSO's are (from my memory) at an all time high. Many of those promoted through WSO Pro. Sales of RAp are fine, and some RAP customers are selling in excess of 1000 products
from a single domain (something over 3500 domains registered with RAP installed).

What you are hearing is the noise of a very few, who have probably violated Paypal's TOS in some manner, and you're just increasing the "noise level" because you have chosen to believe what you heard. Do yourself a favor, and ask a few who haven't painted themselves into a corner with their payment processor. It's a very different picture.

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kindsvater

14 years ago

Originally Posted by Sid Hale

There is NO problem with the "affiliate platforms", as you put it. We're still here, and still processing orders using affiliates, Paypal, etc. Business as usual.

Today.

The better question is diversification so that IF something happens tomorrow, your business and that of your many clients, continues.

The increasing concerns about PayPal did not materialize out of thin air. Nor, from those you speculate "probably" violated PayPal's terms.

.

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Sid Hale

14 years ago

Originally Posted by kindsvater

The better question is diversification so that IF something happens tomorrow, your business and that of your many clients, continues.

Diversification has always been a prudent business practice, so no argument from me there.

The increasing concerns about PayPal did not materialize out of thin air. Nor, from those you speculate "probably" violated PayPal's terms.

No. They didn't.

But neither are they widespread. They are very isolated incidents. Rather than debate individual incidents that have been reported here, I chose to use the word "probably", rather than to state my opinion as undisputed fact and have to then defend that position.

Is it speculation. To some degree, yes. As is almost every single piece of information you will ever read on ANY forum. Because I, nor anyone else here, has ALL the facts. It is my opinion.

You, of course, are free to believe what you will.

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kindsvater

14 years ago

Originally Posted by Sid Hale

But neither are they widespread. They are very isolated incidents. Rather than debate individual incidents that have been reported here, I chose to use the word "probably", rather than to state my opinion as undisputed fact and have to then defend that position.

Good points Sid. I should have added that this is not just a PayPal issue and one needs to look broader than a few complaints.

Plimus has been forced to removed itself from the Internet marketing category, and of their employees came into the forum and shared some correspondence regarding the pressure that is being put on them.

Alert Pay has had it's own ability to send money, including it's check writing capability, shut off.

ClickBank has had significant policy changes and certain products are no longer allowed.

If we assume your service was reliant on Plimus instead of PayPal, we would be having a different discussion.

Various Warriors have recounted recent conversations with PayPal employees.

It is a concern.

If I could rework the OP's original question a bit, and this is something I have seriously given thought to recently, what is the risk of using a service / platform / script that is joined exclusively to one processor like PayPal, versus one that can work with numerous payment providers?

.

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Kevin_Hutto

14 years ago

Originally Posted by Sid Hale

Have you seen something we haven't?

I guess I have...

PayPal Limits My Account | Russ Ruffino Live

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J Bold

14 years ago

Originally Posted by Kevin_Hutto

I guess I have...

PayPal Limits My Account | Russ Ruffino Live

Ya but to argue from the other side, which people will, that's one guy. It's not a definite statement about the issue. I've looked at his story with interest and even commented once or twice on that thread.

And I know more than him in MMO niche that it's happened to, but it happens and it's not necessarily a mass banning or a mass freezing of anyone in the MMO niche.

Still not enough information to know what's truly going on and if it's something that everyone needs to panic about, yet.

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Kevin_Hutto

14 years ago

Originally Posted by redicelander

Ya but to argue from the other side, which people will, that's one guy. It's not a definite statement about the issue. I've looked at his story with interest and even commented once or twice on that thread.

And I know more than him in MMO niche that it's happened to, but it happens and it's not necessarily a mass banning or a mass freezing of anyone in the MMO niche.

Still not enough information to know what's truly going on and if it's something that everyone needs to panic about, yet.

I'm not saying people should panic... but these platforms are both heavily dependent on paypal - especially as many people use these to offer 100% commissions to build lists and what have you. I was just curious if these guys were thinking about this or not as it seems like a trend is slowly forming...

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Tom B

Banned 14 years ago

Originally Posted by Kevin_Hutto

I'm not saying people should panic... but these platforms are both heavily dependent on paypal - especially as many people use these to offer 100% commissions to build lists and what have you. I was just curious if these guys were thinking about this or not as it seems like a trend is slowly forming...

RAP has a clickbank add-on to use their service. That is if things hit the fan with Paypal.

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Kevin_Hutto

14 years ago

Originally Posted by Thomas Belknap

RAP has a clickbank add-on to use their service. That is if things hit the fan with Paypal.

Cool... that was the point of my initial question... although that kills the 100% commission sale. I realize it would be very difficult to facilitate that with merchant accts, etc... as the affiliate wouldn't get instant payment. It seems like there is a big opportunity for an industry specific solution to the payment processing problem- as many of the large companies are making sweeping decisions right now and are ok with losing business.

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Tom B

Banned 14 years ago

Originally Posted by Kevin_Hutto

Cool... that was the point of my initial question... although that kills the 100% commission sale. I realize it would be very difficult to facilitate that with merchant accts, etc... as the affiliate wouldn't get instant payment. It seems like there is a big opportunity for an industry specific solution to the payment processing problem- as many of the large companies are making sweeping decisions right now and are ok with losing business.

Yeah, you won't get the instant commissions but there are alternatives. You can also switch off the instant commissions, in RAP, and pay affiliates monthly for all sales.

Here is the thing, at least what I believe...

If Paypal has a problem, it will be with your website and how you're selling. It won't be your affiliate program unless you are selling the affiliate program on the sales page. If Paypal has a problem then other processors will probably have a problem.

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Tom B

Banned 14 years ago

Originally Posted by Kevin_Hutto

I guess I have...

PayPal Limits My Account | Russ Ruffino Live

That link actually explains nothing...

Did the person have a history of emptying his account when money hit it?

Why didn't the person already go through the identification routine? It almost sounds like he didn't do anything, transactional wise, with paypal until that big amount of money hit the account. If he did then I am sure they would have asked him to go through an identity check routine to make sure he is whom he says he is.

I know I went through an identity check.

I would also like to see what his sales page says. I could break Paypal TOS, on my sales page, and then complain about Paypal not liking it.

There is nothing on that link that actually helps anyone substantiate a "Paypal problem."

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WillR

14 years ago

Originally Posted by Thomas Belknap

That link actually explains nothing...

I would also like to see what his sales page says. I could break Paypal TOS, on my sales page, and then complain about Paypal not liking it.

Exactly. Most of the guys I have seen complaining about having their Paypal accounts frozen have been selling WSO's with huge and wild income claims. You can't break their TOS and then start crying. The FTC doesn't like it so why would Paypal be any different. The problem is the WSO forum is full of wild income claims and that is why we are seeing so many Warriors accounts being frozen.

Originally Posted by Kevin_Hutto

Either you believe that Russ is lying or it is very revealing that the rep said that they do not like this business model anymore.

No one is disagreeing with you. They DO hate this business model. The business model being sales pages promoting work at home type products with outrageous income claims all over them. That sums up just about every WSO where I have seen the person complain about having their Paypal account frozen.

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GarrieWilson

14 years ago

Originally Posted by Thomas Belknap

I would also like to see what his sales page says.

Google "Video Sales Firestorm" its a WSO...

For the lazy, here are a few highlights:

"Watch Me Bring In $76,882.93 In FOUR MONTHS With Simple, 10-Minute Videos That ANYONE Can Create!"

"What If I Told You That It's Possible to Hit a SIX-FIGURE Income Without EVER Writing a Single Blog Post, Article, or Sales Letter Again?"

"In This WSO You'll Get a Guided Tour of a LIVE Video Sales Funnel That is Converting at 4-5% on a $97 Product...and I Will Show You How to Do the EXACT Same Thing!"

IMHO it would violate the PayPal "get rich quick" and making $30k in 3 days, brings it to their attention.

Garrie

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WillR

14 years ago

Originally Posted by GarrieWilson

Google "Video Sales Firestorm" its a WSO...

For the lazy, here are a few highlights:

"Watch Me Bring In $76,882.93 In FOUR MONTHS With Simple, 10-Minute Videos That ANYONE Can Create!"

"What If I Told You That It's Possible to Hit a SIX-FIGURE Income Without EVER Writing a Single Blog Post, Article, or Sales Letter Again?"

"In This WSO You'll Get a Guided Tour of a LIVE Video Sales Funnel That is Converting at 4-5% on a $97 Product...and I Will Show You How to Do the EXACT Same Thing!"

IMHO it would violate the PayPal "get rich quick" and making $30k in 3 days, brings it to their attention.

Garrie

Exactly.

You can't have those sort of claims in your sales copy and then complain when Paypal shuts down your account... seriously. This isn't me having a go at just Russ either. These claims are all over the WSO forum and don't get me wrong... you are more than welcome to use them. But just don't come back and complain when your Paypal account is shut down as a result.

Claims like that SCREAM 'Get Rich Quick' which are the type of products Paypal doesn't want to be a part of.

I know another well respected Warrior who had his Paypal account frozen recently and he also had no idea why. A quick look at his WSO page revealed a huge headline at the top in the format... "Make $XX in XX Days Sitting in Your Underpants at Home..."

I mean c'mon. The FTC doesn't even like these types of claims so is it really any surprise Paypal want to stay well away from them?

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Sid Hale 14 years ago

Yes, I saw that Kevin,

the day he posted it.

Originally Posted by Kevin_Hutto

I guess I have...

PayPal Limits My Account | Russ Ruffino Live

...and he wasn't the first.

I just didn't see the need to feed the fire of mis-information by pointing out specific instances. It would only add to the speculation of those who don't bother to adequately educate themselves.

I and many others have investigated (the best we can, from "outside" the situation) as many of these complaints as possible. I think you would agree that it is in our best interest to be as "in the know" as possible with regard to this issue.

I've also fielded many questions on this issue at my own help desk, but NOT ONE report of any of my customers having their account frozen.

I don't know what action (if any) Mike Lantz is taking with WarriorPlus. I can only tell you that my reaction will be measured, and well thought out.

Any change will be predicated on real changes at Paypal that affect my customers, NOT the perceived threats that arise when one person feels they are treated unfairly, and rather than taking steps to correct the situation, start ranting about how unfairly they have been treated.

It would be much more prudent to channel their efforts into making the needed adjustments in their business and moving forward.
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J Bold

14 years ago

Not all RAP products are make money online, anyway, are they?

Warrior Plus probably a majority are make money online but there are offers in there related to business online such as software, etc. that are not explicitly make money online.

It's something to take a look at but no need to hit the panic button, just yet.

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Kevin_Hutto

14 years ago

I remember back when people's adwords accounts started getting shut down and everybody said that "he must have broke the TOS..."

Either you believe that Russ is lying or it is very revealing that the rep said that they do not like this business model anymore.

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handy

14 years ago

Well given the volume that WSOplus is sending I think Paypal will think twice before shutting them down..

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Gary_The_Ace 14 years ago

Originally Posted by handy

Well given the volume that WSOplus is sending I think Paypal will think twice before shutting them down..

LOL... you can't be serious. The total volume of all WSO's sold in the history of time is less than the volume PayPal does on an average day.

They couldn't care less.

-Gary
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GarrieWilson

14 years ago

Roger: Yes, IMHO, they are broading it. But as in the case mentiond here, it had a hyped sales letter. So PP didnt want to take the risk. It's not that it was a MMO but unrealistic (for the average person).

I have a product about 10 ways to make 10k and it will not be sold with PayPal.

The first part you bolded is why I fight all claims instead of refunding them. 1.) Wins on my account look better. 2) It helps teach people to ask for a refund.

It really irks me when people tell others to just refund complaints. It hurts their account and tells the complainers its an easy way to get their money back thus hurting other sellers.

-g

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Nuno

14 years ago

Even non-MMO sales have had problems before...

Last year I did a lot of research on how to unfreeze a Paypal account when I read what happened to the creator of the popular MineCraft game.

He had very low refund rates, it's a game not a get rich course, the only problem he had was... too many sales...

600,000 euros of them, in a very short time, while he was traveling (and after limitation).

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tyusunas

14 years ago

One of the problems I see is that "coach's" are offering a lot of guarantees now a days. I take you $500 today and if you aren't making money in 60 days, I'll refund your money back. If you look at the sales pages, the seller doesn't even say the buyer has to do anything to get their money back! If I'm Paypal, I wouldn't touch this with a ten foot pole. Check out all these product launches lately and they all offer no questions asked, money back guarantees.

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LB

14 years ago

So the new Paypal API allows sales to be split directly between 2 Paypal accounts, correct?

What are the benefits/downsides of a setup like this? Should we want this?

It seems like perhaps a better way to handle affiliate things, but again, I don't have the knowledge of the API to really know what works best.

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tecHead 14 years ago

Originally Posted by LB

So the new Paypal API allows sales to be split directly between 2 Paypal accounts, correct?

Yes; its the adaptive payments API, to be exact. It allows more than two accounts to be involved in the transaction. I can't remember what the limit is, (I think up to 8 -- don't quote me on that).

Originally Posted by LB

What are the benefits/downsides of a setup like this?

The apparent benefits/downsides are the fact that you can pay your affiliates immediately; downside being figuring out a solid way to handle refund liability.

I guess both of which can only be determined by your own risk comfort levels.

Originally Posted by LB

Should we want this?

C'mon now; only YOU can answer THAT one... but you knew that

Originally Posted by LB

It seems like perhaps a better way to handle affiliate things, but again, I don't have the knowledge of the API to really know what works best.

You can get pretty detailed information and access to discussions, (from not just tecHeads like me lol), over at www.x.com.

Once you know where to look for it, PayPal is pretty good with the information flow.

HTH
PLP,
tecHead
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E. Brian Rose

14 years ago

Originally Posted by LB

So the new Paypal API allows sales to be split directly between 2 Paypal accounts, correct?

That's not what the new API does. When a buyer pays, all of the money goes straight to the vendor. Within seconds, the vendor sends a commission to the affiliate from his account. This happens automatically. The buyer pays the seller. The seller pays the affiliate. That's how it works.

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kindsvater

14 years ago

Originally Posted by E. Brian Rose

That's not what the new API does. When a buyer pays, all of the money goes straight to the vendor. Within seconds, the vendor sends a commission to the affiliate from his account. This happens automatically. The buyer pays the seller. The seller pays the affiliate. That's how it works.

I do not believe this is entirely correct. It is one option. But not the only option. Big Mike above accurately describes the different payment paths.

There are some good diagrams on the PayPal Adaptive Payments API site discussing the options and different payment paths.

For example: one payment of $10 could be split up front 3 ways - X, Y and Z. X gets $4, Y gets $3 and Z gets $3. In this scenario, the only amount hitting X's PayPal account is $4.

Or, as you described one payment of $10 could be paid to X which is then also promptly split with X paying Y $3 and X paying Z $3.

.

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E. Brian Rose 14 years ago

Originally Posted by kindsvater

I do not believe this is entirely correct. It is one option. But not the only option. Big Mike above accurately describes the different payment paths.
.

The scenario that I described is an accurate depiction of how my business is using adaptive payments. The only thing left out were the fees to the company, which also are made from the seller, after the payment arrives.

Your charts might look nice and may depict other scenarios, but this is the one that we are using.
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Coby

14 years ago

Originally Posted by E. Brian Rose

That's not what the new API does. When a buyer pays, all of the money goes straight to the vendor. Within seconds, the vendor sends a commission to the affiliate from his account. This happens automatically. The buyer pays the seller. The seller pays the affiliate. That's how it works.

A great example of this is Mike Cowles' new affiliate program Simple One Click

I know because I am both a vendor and an affiliate for products there...

If you sell a product of mine as an affiliate the customer pays me... I then pay you from my account...

This means you receive payment from "CobyWright.com" and not "Nancy Newbie"...

In my opinion, this is safer for all parties involved... In the case of refunds, affiliates accounts are linked (with their knowledge and agreement)...

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VanessaB

14 years ago

And that Dani is the real problem - you don't seem to want to get to the facts related to this discussion. Facts do not confuse people - the facts are this...PayPal has approved split payments and specifically developed an API to allow merchants to do it. End of story - anything else is just hyperbole on your part.

I think I have demonstrated a considerable interest in finding the 'facts.' I said I didn't want to address the approval process... specifically because...

It did not occur to me to ask who 'approves' the 'app' until you posted the giant picture of your 'approval.' - but your 'image' brought the matter up.

Which makes the question of who does the approval and what the basis is for it pretty relevant.

Plenty of apps/products for plenty of platforms are approved, and then later banned for various reasons... FB, Twitter, even WSO's. That's pretty relevant to questioning the approval process.

Hyperbole?

1. obvious and intentional exaggeration.

2. an extravagant statement or figure of speech not intended to be taken literally, as "to wait an eternity."

Hyperbole | Define Hyperbole at Dictionary.com

Not even close. Nice try at deflection though.

"PayPal has approved split payments and specifically developed an API to allow merchants to do it."

Ahh... well... I'm still not quite certain that answers my question regarding whether or not the 'affiliates' (or any other name given to describe them) go through any sort of vetting process BY PAYPAL (not merchant) to receive the payments...

Did it ever occur to you, that perhaps that could be a problem?
Every single person I have spoken to at PayPal has confirmed that instant payments could be a 'risk' because of refunds, disputes and chargebacks.

While they developed an API, they developed it for 'B2B' and a 'business' should by all accounts, have a 'proper' merchant solution to use these Apps. YOU as a business have one, but if your affiliates do not... that could very well be what PayPal is trying to mitigate.

I know that I can use my free PayPal business account, for which I was never vetted, with W+, Digi, and RapBank... as the 'affiliate.'

And while YOU may be 'vetting' your affiliates, your vetting process is not PayPal's. And the fact that they are sending money to an 'affiliate' who does not have a properly vetted merchant solution account just might be a problem for them....

Because you see, if those 'affiliates' have those properly vetted merchant solution accounts, then there will be rolling reserves, and then the risks of the refunds, disputes and chargebacks come back to accounts with no money in them will be 'lessened.'

Someone mentioned earlier that PayPal doesn't really have an understanding of what affiliates are... The API's seem to be intended for B2B.... maybe, just maybe... they want ANYONE getting payments, vetted by them, and proven to be legit by them...

-Dani

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Tom B Banned 14 years ago

Originally Posted by DanielleS

I know that I can use my free PayPal business account, for which I was never vetted, with W+, Digi, and RapBank... as the 'affiliate.'

-Dani

For you to do any volume or take out money you need to go through their verification process. So, yes, affiliates will need to be verified just like vendors.

Why would you think it would be any different? Again, Paypal will always be at risk which is why they have the verification processes that they do.

Too much scare mongering on here and lots of speculation.
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Tom B

Banned 14 years ago

Originally Posted by DanielleS

I think I have demonstrated a considerable interest in finding the 'facts.' I said I didn't want to address the approval process... specifically because...

It did not occur to me to ask who 'approves' the 'app' until you posted the giant picture of your 'approval.' - but your 'image' brought the matter up.

Which makes the question of who does the approval and what the basis is for it pretty relevant.

Plenty of apps/products for plenty of platforms are approved, and then later banned for various reasons... FB, Twitter, even WSO's. That's pretty relevant to questioning the approval process.

Hyperbole?

1. obvious and intentional exaggeration.

2. an extravagant statement or figure of speech not intended to be taken literally, as “to wait an eternity.”

Hyperbole | Define Hyperbole at Dictionary.com

Not even close. Nice try at deflection though.

Ahh... well... I'm still not quite certain that answers my question regarding whether or not the 'affiliates' (or any other name given to describe them) go through any sort of vetting process BY PAYPAL (not merchant) to receive the payments...

Did it ever occur to you, that perhaps that could be a problem?
Every single person I have spoken to at PayPal has confirmed that instant payments could be a 'risk' because of refunds, disputes and chargebacks.

While they developed an API, they developed it for 'B2B' and a 'business' should by all accounts, have a 'proper' merchant solution to use these Apps. YOU as a business have one, but if your affiliates do not... that could very well be what PayPal is trying to mitigate.

I know that I can use my free PayPal business account, for which I was never vetted, with W+, Digi, and RapBank... as the 'affiliate.'

And while YOU may be 'vetting' your affiliates, your vetting process is not PayPal's. And the fact that they are sending money to an 'affiliate' who does not have a properly vetted merchant solution account just might be a problem for them....

Because you see, if those 'affiliates' have those properly vetted merchant solution accounts, then there will be rolling reserves, and then the risks of the refunds, disputes and chargebacks come back to accounts with no money in them will be 'lessened.'

Someone mentioned earlier that PayPal doesn't really have an understanding of what affiliates are... The API's seem to be intended for B2B.... maybe, just maybe... they want ANYONE getting payments, vetted by them, and proven to be legit by them...

-Dani

Dani, I am trying to get my head around what you tested. You said you created a paypal account that wasn't verified and signed up for affiliate programs.

Did you run any money through that non verified account? Especially money generated from those affiliate programs?

If so, then how much?

How much money did you take out of that "non-verified" Paypal account?

Did you request a check or did you have it sent directly to your bank account?

Please don't tell me you just created a dummy paypal account, signed up for a couple affiliate programs and then came to your conclusions.

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RichardWing

14 years ago

Dani,

I need to ask do you even know how these systems work?

Anyone using these affiliate/reseller systems must have a premier / business paypal account in order to receive money. They (merchants and resellers) all go through the same vetting process with paypal. No matter who gets paid using these systems.

Who ever gets paid is a partner within that business whether its the person who set up the product for sale or the authorized reseller of the product.

What additional vetting do you think goes on or needs to go on?

Paypal has the same information for everyone involved in receiving a payment for the purchase.

Richard Wing
623-505-6302
skype - richardwing

Originally Posted by DanielleS

Ahh... well... I'm still not quite certain that answers my question regarding whether or not the 'affiliates' (or any other name given to describe them) go through any sort of vetting process BY PAYPAL (not merchant) to receive the payments...

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jwyrick 14 years ago

Is this yet another "dooms day" thread ? ? ? Really guys, after 4 years where people like both Mike Lantz and Sid Hale and the many people such as Richard here who have worked with them HAND IN HAND providing support for their products, building dedicated forums, blogs and even Skype chat rooms to help their members.... after all this PAYPAL IS STILL OK WITH THEM and people need to stop trying to breed negativity based on unfounded fears due to some hyped up blog or forum post they read somewhere else.

Richard is right, this is completely nuts! If you knew him, if you knew Sid or if you had any CLUE how hard guys like Mike Lantz work just to make the whole Warrior experience go smoothly with things like Warrior Special Offers you wouldn't even be asking these questions.

The real question you should be asking is this; If there really was an issue with PayPal regarding RAP, WarriorPlus or any other program like these two (if there are any others that are even HALF AS GOOD as they are...) then why is it that people are still making millions of dollars using both of them right now and further, why is it that PayPal is letting this happen without hesitation?

Trust me guys, if there was a problem I think PayPal would be on top of this long before you guys started posting negative rants in the Warrior Forum to ask such questions. In fact you could've called PayPal directly if you really wanted more information about programs like RAP and Warrior Plus.

In the meantime, I've been an active warrior since 2007 with this account before they changed over their system and I lost my last one, which I believe went all the way back to 2004 if memory serves me correctly and I know both Sid and Richard fairly well so if you need a character witness for them or for the RAP system I'll "vouch" for the legitimacy. As for WarriorPlus, I've used this program as well to run a WSO and had NO TROUBLE at all with it.

The only real problem is when you get a bad affiliate / reseller who is less than honorable and THANK GOD for RAP having the ability to block those who are less than desirable so that if people like myself or like Richard need to issue a refund due to someone who's of shady character at the very least we can stop them from trying to take advantage of others. Please note that in rare incidents like this, it's not a RAP or a Warrior Plus issue, as these are not the systems that are at fault. The problem is the affiliate / reseller who should be honoring the agreements they make and issuing the refund, not the other way around where an established marketer should be viewed as a bad person just because someone signed up to promote their product and represented it poorly, didn't want to provide support for something they agree to be a reseller for or worse than this didn't want to provide a refund for someone who's less than happy with their whole buying experience for any reason.

Jeffrey S Wyrick
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kindsvater

14 years ago

Originally Posted by RichardWing

Anyone using these affiliate/reseller systems must have a premier / business paypal account in order to receive money. They (merchants and resellers) all go through the same vetting process with paypal. No matter who gets paid using these systems.

I don't want to confuse different PayPal payment methods, but I thought with the Adaptive Payments API only 1 person who is paid needs the business account.

Others to whom payments are split do not.

Or am I wrong in my understanding of this.

.

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GarrieWilson

14 years ago

3) Scripts that 'rotate' the PayPal email addresses to pay
vendor/affiliated (again, sometimes called 'equity partners') in
rotation

I'd bet they are thinking of the gifting programs that rotate.
PayPal has limited understanding of affiliates.

If you would have asked:

"My business partners and I want to share payments on a
site. Would it be a violation if we changed the email address
for the PayPal button to that of a different partner after
each sale?

It will make book keeping much easier."

or even...

"Is it allowed to change the vendor/payee
email address on buttons based on the
referring person?"

My wording makes it seem different but
the outcome is the same. Rotating sales.

Garrie

P.S. FYI: I am not saying they aren't closing
sites for rotating, I am saying it's not in the
TOS and without showing an AUP Marshall
specifics (step-by-step in dumby terms) they
can only guess what you are referring to and
they tend to lean on the side of causion.

I also think it depends on the sales letter
and how everything is worded.

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tecHead

14 years ago

It seems to me that PayPal is considering the instant payments to affiliates; (in the manner they're being conducted); to be one party accepting payments for another party... that's actually a very old merchant account violation instituted by Visa/MasterCard International.

Its vague, yeah.. but, I can see it being used. Esp. in today's everybody's stressed out over PCI compliance and who pays for it... identity theft and who's fault is it... money laundering... terrorists and Patriot Acts..

I (personally) think its a good thing; as instant affiliate payments are great for the affiliate but not so good for the merchant. The merchant is always going to be the one left holding the bag should things go bad.

lol, I bet Amazon NEVER thought they'd be creating SUCH a multi-faceted conundrum in the business world when they created the first affiliate program... they just thought other people helping them sell their books was a cool idea.. <sigh>

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robd1302

14 years ago

Originally Posted by tecHead

It seems to me that PayPal is considering the instant payments to affiliates; (in the manner they're being conducted); to be one party accepting payments for another party... that's actually a very old merchant account violation instituted by Visa/MasterCard International.

To me, this is the main problem, whether it's specifically against PayPal's written TOS. When the person being paid for a product is completely different than the actual provider of the product, it presents all sorts of potential problems for refunds, and I can understand why PayPal wouldn't want to deal with that.

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kindsvater

14 years ago

Originally Posted by robd1302

To me, this is the main problem, whether it's specifically against PayPal's written TOS. When the person being paid for a product is completely different than the actual provider of the product, it presents all sorts of potential problems for refunds, and I can understand why PayPal wouldn't want to deal with that.

My understanding from Big Mike's advertising for WP InstantPay, is that he discussed this issue specifically with PayPal and they were fine with the automatic payment split to pay an affiliate commission.

.

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tpw

14 years ago

Originally Posted by kindsvater

My understanding from Big Mike's advertising for WP InstantPay, is that he discussed this issue specifically with PayPal and they were fine with the automatic payment split to pay an affiliate commission.

.

The difference is that Big Mike is using the Paypal API, which allows PayPal to know which two parties are being paid for a specific product and it allows them to understand who the real vendor is in the arrangement.

Big Mike is doing it within Paypal's TOS, and to my knowledge, Warrior Plus and RAP are not.

Just my two cents...

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Sid Hale

14 years ago

Originally Posted by tpw

The difference is that Big Mike is using the Paypal API, which allows PayPal to know which two parties are being paid for a specific product and it allows them to understand who the real vendor is in the arrangement.

Big Mike is doing it within Paypal's TOS, and to my knowledge, Warrior Plus and RAP are not.

Just my two cents...

What Mike didn't mention, is that the Adaptive Payments API includes yet a third payment method, that can be used to rotate payments EXACTLY the way WarriorPlus and RAP, do it.

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LB

14 years ago

Originally Posted by Sid Hale

What Mike didn't mention, is that the Adaptive Payments API includes yet a third payment method, that can be used to rotate payments EXACTLY the way WarriorPlus and RAP, do it.

But does Paypal allow this to occur outside their API?

That's what I think we're all asking. Just because Paypal allows their system to do something (where they can fully track what's occurring), does not mean they allow it to happen elsewhere.

I honestly have no idea what the answer is...I'm just trying to reframe this in a way that's relevant.

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Sid Hale

14 years ago

That's a prudent question.

When I said EXACTLY...

That's EXACTLY what I meant.

In fact, that's WHY I said it.

Originally Posted by LB

But does Paypal allow this to occur outside their API?

That's what I think we're all asking. Just because Paypal allows their system to do something (where they can fully track what's occurring), does not mean they allow it to happen elsewhere.

I honestly have no idea what the answer is...I'm just trying to reframe this in a way that's relevant.

This third method of payment in the API, is only aware of the payer and the payee. It has no knowledge of whether the payee is the merchant or the affiliate (or an equity partner). There is nothing in the transaction to identify that there is an affiliate. Paypal doesn't need that information (and therefore make no provision for capturing such information). All they require is to know who is paying, to whom, and how much.

Does Paypal allow it to occur? They have since September of 2007 (the launch of RAP), and they have had every opportunity to shut it down. My own account was frozen and investigated briefly in 2009 - specifically because of RAP, and the freeze was lifted within a couple of hours.

Beyond my own experience, there are thousands of RAP users processing transactions through Paypal on a daily basis. Many of those (customers who purchased RAP when it was originally released) have just as long a track record as myself.

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kindsvater 14 years ago

Isn't there a saying about letting sleeping dogs lie?

Not sure it is prudent to be harassing PayPal about a service one does not own.

If you're not comfortable with the risk presented by a service and it's model - don't use it.

I think the original question was about risk and the possible need to look beyond PayPal to ensure transaction processing. It has been a good discussion.

But it's one thing for us to be discussing issues on a forum between ourselves. It is quite another to be discussing certain products with PayPal in a context that could be harmful to the product owners and their customers.

Also, keep in mind that for a variety of reasons, PayPal could allow X to offer a certain service, but deny Y the right to offer essentially the same service.

Basically, Dani, I'm suggesting that you not further discuss with PayPal other products and urls.

.
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tpw

14 years ago

Originally Posted by Sid Hale

What Mike didn't mention, is that the Adaptive Payments API includes yet a third payment method, that can be used to rotate payments EXACTLY the way WarriorPlus and RAP, do it.

Well, if you are using that version of the API, I will correct my storyline.

But I read the PayPal documentation about the API and missed that model listed in the docs.

p.s. I also assumed my version of the story regarding RAP was correct, since you hadn't corrected me before now.

EDIT:

Originally Posted by Sid Hale

This third method of payment in the API, is only aware of the payer and the payee. It has no knowledge of whether the payee is the merchant or the affiliate (or an equity partner). There is nothing in the transaction to identify that there is an affiliate. Paypal doesn't need that information (and therefore make no provision for capturing such information). All they require is to know who is paying, to whom, and how much.

Does Paypal allow it to occur? They have since September of 2007 (the launch of RAP), and they have had every opportunity to shut it down. My own account was frozen and investigated briefly in 2009 - specifically because of RAP, and the freeze was lifted within a couple of hours.

Beyond my own experience, there are thousands of RAP users processing transactions through Paypal on a daily basis. Many of those (customers who purchased RAP when it was originally released) have just as long a track record as myself.

Given these comments, you seem to be referencing the PayPal IPN and not the PayPal API.

If so, I suspect you are still standing outside the gate, praying not to be bulldozed in the coming changes.

Just my thoughts...

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tecHead

14 years ago

Originally Posted by tpw

Well, if you are using that version of the API, I will correct my storyline.

But I read the PayPal documentation about the API and missed that model listed in the docs.

p.s. I also assumed my version of the story regarding RAP was correct, since you hadn't corrected me before now.

...

Direct from the PayPal Adaptive Payments Developer Guide (page 17)...

Originally Posted by PayPal

Simple, Parallel, and Chained Payments

Adaptive Payments provides several kinds of payment: simple, parallel, and chained payments. You create each kind of payment with the Pay API.

Simple payments enable a sender to send a single payment to a single receiver. For example, your website can use an Adaptive Payments payment flow to transfer money resulting from a sale from your customer’s PayPal account to your own account. This is the traditional kind of payment.

Parallel payments enable a sender to send a single payment to multiple receivers. For example, your application might be a shopping cart that enables a buyer to pay for items from several merchants with one payment. Your shopping cart allocates the payment to merchants that actually provided the items. PayPal then deducts money from the sender’s account and deposits it in the receivers’ accounts.

Chained payments enable a sender to send a single payment to a primary receiver. The primary receiver keeps part of the payment and pays secondary receivers the remainder. For example, your application could be an online travel agency that handles bookings for airfare, hotel reservations, and car rentals. The sender sees only you as the primary receiver. You allocate the payment for your commission and the actual cost of services provided by other receivers. PayPal then deducts money from the sender’s account and deposits it in both your account and the secondary receivers’ accounts.

NOTE: Chained payments also include delayed chained payments, in which payments to secondary receivers can be delayed for up to 90 days.

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Sid Hale

14 years ago

Hi (Bill, isn't it?),

I hate to even post again, because I know that there are many who will read everything in this thread, and still not understand, but you asked:

Originally Posted by tpw

Well, if you are using that version of the API, I will correct my storyline.

But I read the PayPal documentation about the API and missed that model listed in the docs.

Is it safe to assume that TecHead's reply (just under your post), gave you the information that you had missed?

Originally Posted by PayPal
Simple, Parallel, and Chained Payments

Adaptive Payments provides several kinds of payment: simple, parallel, and chained payments. You create each kind of payment with the Pay API.

Simple payments enable a sender to send a single payment to a single receiver. For example, your website can use an Adaptive Payments payment flow to transfer money resulting from a sale from your customer’s PayPal account to your own account. This is the traditional kind of payment.

At least you had read the documentation, and just missed it. I worry about the number of people who post here without ever even having cracked open the appropriate documents.

p.s. I also assumed my version of the story regarding RAP was correct, since you hadn't corrected me before now.

I don't know. I felt the thread contained a lot of speculation, and was headed for a big "knock down, drag out", so I limited my participation. I guess I missed your "version", or focused on some other part of your post.

That's part of the problem with this form of communication. You, I, and everyone else, tend to "fill in the blanks" in an effort to follow the conversation, and we occasionally make assumptions.

EDIT:

Given these comments, you seem to be referencing the PayPal IPN and not the PayPal API.

If so, I suspect you are still standing outside the gate, praying not to be bulldozed in the coming changes.

The Adaptive Payments API contains three different payment methods (as previously stated), and there is overlap in their functionality with the previously available IPN. In fact, all three methods in the Adaptive Payments API, provide IPN as a part of their implementation.

RAP does not currently use the Adaptive Payments API in the implementation of RAP.

Just as Paypal has NOT abandoned the Instant Payment Notifications (IPN) process - nor any of the other payment methods that have been available through Paypal for years - neither will RAP abandon its installed customer base.

Unlike the merchants who have recently released Adaptive Payments solutions to the marketplace, RAP already has an installed customer base. They must be supported during/after any such implementation, and they must be provided with a reasonable upgrade path.

That's not "standing outside the gate", it is responsible software development and migration.

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tpw

14 years ago

Originally Posted by Sid Hale

The Adaptive Payments API contains three different payment methods (as previously stated), and there is overlap in their functionality with the previously available IPN. In fact, all three methods in the Adaptive Payments API, provide IPN as a part of their implementation.

RAP does not currently use the Adaptive Payments API in the implementation of RAP.

Just as Paypal has NOT abandoned the Instant Payment Notifications (IPN) process - nor any of the other payment methods that have been available through Paypal for years - neither will RAP abandon its installed customer base.

Unlike the merchants who have recently released Adaptive Payments solutions to the marketplace, RAP already has an installed customer base. They must be supported during/after any such implementation, and they must be provided with a reasonable upgrade path.

That's not "standing outside the gate", it is responsible software development and migration.

TecHead, BigMike, Johnny Slater and Sid Hale have answered my questions.

I have no doubt that you will do what is best for your customers and you will continue to have a good product.

I've only one concern, and it has not yet been concluded to my satisfaction.

I am not trying to be an ass or hardheaded for the sake of being hardheaded -- :footstomp: I am not my dad dammit.

I know that PayPal is not abandoning the Simple Pay model. I never suggested that they would.

I believe that PayPal introduced the Parallel and Chained Payment systems, because they recognized that they needed to address affiliate payments directly, rather than to let things run as they have been for several years.

They seem to have zero issues with Split Pay, or else they would never have introduced those payment options.

They have also always said that affiliate relationships (single-tier) were fine, but MLM multi-tier was not fine.

But I am still concerned about Rotating Payments, more so now, with the release of the Parallel and Chained Payment options.

My gut tells me that the Single Pay is for a transaction between one person and another -- a simple, basic transaction.

Me to you with no affiliate clouding the waters.

My gut tells me that they would never have needed the Parallel and Chained Payment options if they were completely satisfied with the Single Pay - Rotating Payments as they have been previously implemented by Warrior Plus and Rap.

So is the fact that they introduced the Parallel and Chained Payment options an indication that they may in the future look at Simple Pay - Rotating Payments as a bad idea?

Not yet, I know...

But in my mind, the writing might be on the wall. But it is all written in scribbles, so I cannot say for sure. :p

My conclusion is that Single Pay - Rotating Payments is acceptable right now. But I am very uneasy with the idea of building my business relying on the hope that they might not change their minds.

I just cannot escape the idea that by introducing Parallel and Chained Payment options, they were acknowledging the weaknesses in the Single Pay - Rotating Payments model.

I don't own a crystal ball. I do not know what the future holds.

But until PayPal says on their website that Single Pay - Rotating Payments are acceptable to them, I am always going to be uneasy using that model... Even though I am still using that model by using the WarriorPlus system with many of my WSO's.

I am not committed to the alternative, but I am nervous about what I am using.

Take it as you will...

p.s. If that guy Sid Hale told me that he has already started programming the Parallel and Chained Payment processes into his payment system as an option, just in case PayPal threw down the gauntlet on Single Pay - Rotating Payments, then I would never worry again about the long-term viability of his model or his product.

Yes. Bill Platt

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JohnMcCabe

14 years ago

Originally Posted by DanielleS

John,
I spoke with several people from Merchant Solutions, Limitations, Brand Risk Management and the Development team. I would not consider any of these departments to be 'front line' people.

None of them were familiar with the solutions I named.

None of them bothered to research them either.

The latest phone call, today's, had me at Merchant Solutions yet again where I was referred to the 'sales team' who will be open tomorrow. And to whom I will present 'Garrie's verbiage' for the same questions.

-Dani

Dani, I'm not making a personal attack here. You may have spoken with people in departments with impressive names, but you likely can't say for sure just where on the food chain those people reside.

I'll grant that they're very likely above the bottom-tier CSR that answers basic support questions.

In my own experience, large organization like this have multiple layers of authority.

If I go to my bank for a loan, I probably start by sitting down with a vice-president. While obviously higher on the totem than the tellers, the VP is basically allowed to fill out the paper work and tell me no if I'm obviously unqualified. A yes answer comes from higher up, whether that's the local branch president or a team of underwriters.

That was my whole and only point. You may have been talking/emailing with people who have to get someone else's permission to give you a definitive answer. Note the word 'may' - I don't know for sure. I'm betting you don't, either.

Whatever the status, I'll be interested in finding out what you are told...

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VanessaB 14 years ago

Hi John,

I didn't take it as an attack at all. No worries.

As for the rest of this conversation...

Verified accounts and Vetted accounts are not the same. Verified means they verified that you have a bank account, and if you're in the US, a corresponding SS#.

Vetted means they have a real merchant solution, your expected revenue is noted, your rolling reserves and withdrawal limits have been set.

I was not even going to get involved in this thread, until I got a PM from CD on Skype that someone was demanding I post the emails.

I did not make another phone call today, and have debated on whether or not it's even worth doing so at this point.

If their PR department has so much as a half of a brain, they're never going to come out and admit to anything...

So there will be no 'empirical data' FROM PAYPAL....

The only 'empirical data' that exists would be... oh, I don't know.... maybe the fact that real merchant accounts require RESERVES for cushioning against refunds and chargebacks?

It's really not even a valid discussion point since never before in history, has a merchant even had the ability to pay out on invoices, to partners, or to employees, instantly at the point of sale, electronically. Therefore there will be no 'empirical data' to even assess the risks...

EXCEPT....

To examine WHY a real merchant account would require a rolling reserve.

Which should be pretty obvious to anyone running a business.

And since it's been proven that you don't need to have an account with 'reserves' to promote an instant commission product AS THE AFFILIATE...
(again, I don't know if WP-IP does require the affiliate to have this type of account, as Mike has not answered that question)

There is no way that PayPal has to be assured that they will be able to recover losses paid to that affiliate, in the event of a chargeback.

They COULD go in and take the refund... if there's money in the account.
They COULD go into the backup funding and take the refund... if there's the money in the account...

If there is neither, recovery costs may dwarf the amount of the transaction in question, forcing them to absorb the loss...

I have no doubt that this is exactly what their 'Risk Management' team is looking at. None. No doubt whatsoever.

I also have no doubt that they will never admit to it.

But it's pretty obvious why merchant accounts want rolling reserves...

-Dani
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Sid Hale

14 years ago

Hey Bill,

Originally Posted by tpw

I believe that PayPal introduced the Parallel and Chained Payment systems, because they recognized that they needed to address affiliate payments directly, rather than to let things run as they have been for several years.

I guess that's a possibility, but I think you are reading way too much between the lines.

I have read NOTHING to indicate that Parallel and Chained Payments were introduced specifically to facilitate affiliate commissions. There are many reasons to split payments (royalties, or management fees, for instance), and I don't think Paypal has any thoughts of trying to regulate the affiliate arrangement between a merchant and his outside sales force (too many variables, as those arrangements have always been unique, "one off" agreements between the merchant and his sales force).

I don't think Paypal has any intention of involving themselves in affiliate management.

They are simply providing a more automated way to split payments at the time of a sale.

My gut tells me that the Single Pay is for a transaction between one person and another -- a simple, basic transaction.

Me to you with no affiliate clouding the waters.

And that, by definition, is what rotating payments provides. With the Single Pay method (whether Adaptive Payments or simply IPN), Paypal has no understanding from the transaction data, whether the payee is an affiliate, or a merchant.

With rotating payments, there is only a buyer and a seller!

They don't really care. The affiliate IS a Paypal account holder! In fact, if he/she is not either 1) a Premier, or 2) a Business account holder, the payment will be held requiring the payee to accept it. (Paypal putting up a red flag for themselves, to determine if they want to force the receiver to verify the account?)

Affiliate, or not, there is no "clouding" of the waters. The relationship, and the agreements between a merchant and his/her sales force, is simply not their concern.

My gut tells me that they would never have needed the Parallel and Chained Payment options if they were completely satisfied with the Single Pay - Rotating Payments as they have been previously implemented by Warrior Plus and Rap.

That's a stretch, Bill. Think about it. Cause should precede effect.

Adaptive Payments has only recently come to the attention of internet marketers, but the API was released by Paypal in early 2010... about a year before Warrior Plus even implemented their affiliate network.

My gut tells me that the release of Adaptive Payments had NOTHING to do with affiliates, at all. As stated before, it's just a more automated, method of payment processing, with the ability to split payments between multiple parties.

p.s. If that guy Sid Hale told me that he has already started programming the Parallel and Chained Payment processes into his payment system as an option, just in case PayPal threw down the gauntlet on Single Pay - Rotating Payments, then I would never worry again about the long-term viability of his model or his product.

That guy, Sid Hale, tries very hard not to pre-announce features. I know, 'cause I just talked to him. He said, "It just creates pressure to get new features launched before they are fully tested and ready for the market."

Of course... you are allowed to "speculate"

- just not out loud.

p.s. The sky is NOT falling.

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Sid Hale

14 years ago

I can't believe I missed this before...

Originally Posted by tecHead

It seems to me that PayPal is considering the instant payments to affiliates; (in the manner they're being conducted); to be one party accepting payments for another party... that's actually a very old merchant account violation instituted by Visa/MasterCard International.

No way! In fact, that applies more to the new Chained Payments than it does to rotating sales. With Chained Payments, the merchant takes the money, and an automatic disbursement of funds (i.e. to the affiliate) takes place. That comes a lot closer to one party accepting payments for another party than does the practice of rotating sales.

When an affiliate gets paid using rotating sales, the merchant never touches the affiliate's money, and the affiliate never touches the merchant's money - so I don't see how that can possibly be interpreted the way you have.

I (personally) think its a good thing; as instant affiliate payments are great for the affiliate but not so good for the merchant. The merchant is always going to be the one left holding the bag should things go bad.

Also, not true. If/when a customer raises a dispute w/ Paypal over monies paid, the dispute is lodged against the receiver's account (i.e. the affiliate if they were the one paid). The merchant was not involved in the original sale. It is between the receiver of funds, and the customer - with Paypal making the decision on the dispute. If the affiliate was the receiver, the merchant is not involved.

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Johnny Slater

14 years ago

Garrie is right. When you mention rotating sales to PayPal they see something completely different than what you really mean.

What you should be asking is if it is ok to have a system where a different person gets paid after each sale, but it is done in a way that the customer only makes one purchase and the payee always gets the full amount of the sale.

You have to make sure that PayPal understands that there is only one transaction and that it is not the split pay method from a few years ago. When you mention rotating payments to PayPal they instantly think split pay which is where you have a customer make two payments, one to the merchant then one to the affiliate. These types of systems have been banned from PayPal for several years now and they do not fully understand the difference between split pay and rotating pay.

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dagaul101

14 years ago

Paypal has long been the sole player in online payments, unfortunately there isn't anything near them, so they can dictate the rules as they see fit

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Eduard Stinga

14 years ago

If the problem is only with the unrealistic claims, then I'm glad they do it. I'm so sick of all these "Make 6 figures each month with 2 minutes of work".

I'm fairly new to making $ online, but I consider that if you're a correct person doing genuine business with realistic claims, PayPal won't do anything against you. Just my two cents.

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VanessaB

14 years ago

Mike,
Thank you for the detailed explanation between the difference between the Parallel Payments and Chained Payments.

I'm not Hell bent on calling out the system. I'm Hell bent on being able to properly do 'due diligence.'

If you want to minimize your risk overall, then you should screen affiliates if you're a seller or consider the risks in promoting a given product if you're an affiliate. Take a step back from just wanting to make money as fast as possible and evaluate the long-term consequences of what you promote

With all due respect, this is precisely my point.

-Dani

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Sid Hale

14 years ago

Hi Dani,

Originally Posted by DanielleS

Mike,
Thank you for the detailed explanation between the difference between the Parallel Payments and Chained Payments.

I'm not Hell bent on calling out the system. I'm Hell bent on being able to properly do 'due diligence.'

With all due respect, this is precisely my point.

-Dani

Due diligence is great. Unfortunately, many (both here in the WF, as well as elsewhere) publish what they think... without having exercised any due diligence, themselves.

Repeating what one has said in a blog/forum posting is NOT due diligence.

Due diligence is a research activity that includes asking intelligent questions of the appropriate parties (in this case, those making the rules), but the questions must be framed correctly to get the correct answer. If one isn't careful, they get an answer to a question that they didn't ask.

This is particularly true when dealing with regulated organizations in the financial industry.

As I'm sure you know, and as Mike pointed out in his post, above... It's not easy to get to the right people in Paypal. In any large company, these policies are typically formulated by legal counsel, to protect the company. You just aren't going to get the lawyers on the phone. (And even if you could, can you imagine the evasive responses you'd get from them?)

That is why we tend to rely on what others say here in forums, in their blog posts, etc. But... it is also why we should question anyone who says "Paypal said", or "Dani said". That questioning IS due diligence in action!

Without substantiation, it's not due diligence, it's gossip.

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VanessaB

14 years ago

Sid,

My intelligent question to PayPal (the appropriate party making the rules) was to ask whether or not the 4 solutions I mentioned would put me at greater risk of being limited or frozen.

If I am about to open a merchant account and have my income in the hands of the merchant processor, I fully expect the rep who is guiding me through the process of opening my account can and will directly answer my questions regarding whether or not using those solutions will put me at greater risk of having my capital frozen.

"Hard to get to the right people" doesn't seem a wise reason to just 'take the risk.'

Calling PayPal, the ones who make the rules, on the phone and trading approximately 6 emails (not counting the auto replies) is not 'he said she said' 'gossip.' It is substantiation and due diligence.

I did not substitute words for 'affiliate' or 'commission' with other words like 'reseller,' however, I will take Garrie's 'phrasing' of the questions back to PayPal and see if the phrasing yields a different result.

Thank you Gary for taking the time to give that suggestion.

The whole situation sucks. My entire brand has been built on "Cash Paid Daily." Obviously the promotion of instant commission products was a part of that brand.

I understand the attractiveness of instant commissions. I also understand the price of convenience. I never cared for ClickBank because of how long it takes to actually get paid from them. I don't blame PayPal for mitigating risk, but I don't like the way they do it (holding all funds for 6 months, crippling a business)

I'm not going to stop selling or promoting instant affiliate payment products yet, but I'm definitely going to scale up on my other systems to offset any risk of having all my capital tied up in a freeze.

-Dani

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JohnMcCabe

14 years ago

Originally Posted by DanielleS

Sid,

My intelligent question to PayPal (the appropriate party making the rules) was to ask whether or not the 4 solutions I mentioned would put me at greater risk of being limited or frozen.

If I am about to open a merchant account and have my income in the hands of the merchant processor, I fully expect the rep who is guiding me through the process of opening my account can and will directly answer my questions regarding whether or not using those solutions will put me at greater risk of having my capital frozen.

-Dani

Dani, I don't want to step in the middle of this, but asking the questions you did the way you asked them may have colored the answers.

Mostly, you asked and interpreted the answers based on an assumption that the persons answering you were either a) familiar with the four options you asked about, or b) would/could take the time to research them well enough to give you informed answers.

Most front line support people tend to be graded more heavily on things like how many queries per hour they answer than on complete, accurate answers. So they give 'safe' answers, notch up another completed queriy and move on.

I have a hunch that rephrasing the questions in the form Gary gave you will indeed get you different answers.

Like many others, I'll be waiting to see what comes of it...

Thanks for sharing what you've found.

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VanessaB

14 years ago

Originally Posted by JohnMcCabe

Dani, I don't want to step in the middle of this, but asking the questions you did the way you asked them may have colored the answers.

Mostly, you asked and interpreted the answers based on an assumption that the persons answering you were either a) familiar with the four options you asked about, or b) would/could take the time to research them well enough to give you informed answers.

Most front line support people tend to be graded more heavily on things like how many queries per hour they answer than on complete, accurate answers. So they give 'safe' answers, notch up another completed queriy and move on.

I have a hunch that rephrasing the questions in the form Gary gave you will indeed get you different answers.

Like many others, I'll be waiting to see what comes of it...

Thanks for sharing what you've found.

John,
I spoke with several people from Merchant Solutions, Limitations, Brand Risk Management and the Development team. I would not consider any of these departments to be 'front line' people.

None of them were familiar with the solutions I named.

None of them bothered to research them either.

The latest phone call, today's, had me at Merchant Solutions yet again where I was referred to the 'sales team' who will be open tomorrow. And to whom I will present 'Garrie's verbiage' for the same questions.

Mike,
I don't have to know PayPal's Management or Development teams to see their 'risk.' Policies on how to handle risk may differ from company to company, but math is universal.

There is a reason that banking transactions require a 'clearing' time.
Paying out an instant commission leaves zero margin for error.
In the offline world, even a straight commission salesman waits 1-2 weeks for his 'commission' so that other sales generated during processing time can cover chargebacks, cancellations etc.

I see risk in the fundamental math of finance. Not in PayPal's Management or Development team.

Yes, I have a vested interest as well.

Understanding the protection a company is afforded during a 'payment processing time' is not conjecture or speculation.

It was not my 'USP' to my WSO, neither the sales letter or the book.

The USP was how to spread the risk across multiple payment processors, without losing affiliates.

And the USP for my 'upcoming' product is based on that exact same USP.

The Live call and the emails pretty rule out 'hearsay'. Fundamental math rules out 'hearsay'.

Now, I don't want to address who exactly 'approves' any applications that access PayPal's API, because that is what will confuse people... but I have to wonder... who is doing the approval? Is the development team who is making sure that your application does not infect their systems in some way? Is it their security team who is ensuring that your app is not designed to retrieve people's personal credit card and banking information? Or is it their Risk Management team, who is saying, "this guy wants to give his sales force instant commissions and we're ok with that."

I've seen enough Twitter and FB apps approved and then banned later to not wonder who it is behind 'app approval.'

And again, on the fundamental math of finance, I see risk, and every single person I've spoken to at PayPal has said that engaging in instant commissions could be a potential risk due to refunds, disputes and chargebacks and that is regardless of how the payments were transferred, because they have said, that they will go to the 'source' if the 'affiliates' do not honor the refunds.

Now Mike, I know that you have said that for me to use WP-IP, I would have to have a certain PayPal account, (I do not remember which one it was and I looked before posting but did not find it)... but I don't think I asked, if only the 'vendor' has to have that account to use WPIP or if the affiliate does as well....

And to answer your questions regarding which urls I gave, I gave them all 4, clickable urls to W+, RAP, Digin, and WP-IP.

Now I will call them again, using Garrie's suggested verbiage, tomorrow and see if it makes any difference.

All that being said, I will still stand on point that instant commission products do have a place, but that putting all your eggs in that, and PayPal's basket (even without instant commission) is not prudent.

-Dani

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Sid Hale

14 years ago

Hi Dani,

While I did quote a small part of your post, I really didn't mean for you to take it so personal. My reply was meant for everyone.

Originally Posted by DanielleS

Calling PayPal, the ones who make the rules, on the phone and trading approximately 6 emails (not counting the auto replies) is not 'he said she said' 'gossip.' It is substantiation and due diligence.

Not unless the questions asked are specific, and don't make assumptions regarding the understanding of the person being asked. You have admitted that the question could be clarified by the wording that Garrie posted. I agree that it is much better wording than what you previously selected, and combined with the wording you previously used, comes much closer to being a "discussion" with Paypal.

I would also submit that a discussion is exactly what is needed (more give and take from both sides), in order to reach an understanding by both parties. There is no "pat" answer.

I don't blame PayPal for mitigating risk, but I don't like the way they do it (holding all funds for 6 months, crippling a business)

In that, I think we have found some common ground. I think it is excessive, too.

However, that is their current policy, and since I don't violate any of their policies with regard to my product or business practices, I really see no reason to shudder and quake over that one. (If you're selling crap, flavored with "guaranteed income" hype, maybe you have reason to fear the axe.)

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marcromero

14 years ago

this is the first I have heard of this. Maybe warrior plus can come up with their own payment processor!

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GarrieWilson

14 years ago

Also, keep in mind that for a variety of reasons, PayPal could allow X to offer a certain service, but deny Y the right to offer essentially the same service.

Their TOS even says as much.

For example: The TOS says no MLM but PayPal has and does approve some.

Garrie

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JasonParker

14 years ago

You know... I can't believe I got sucked into another one of these PayPal threads lol...

A lot of valid points here.

The way I see it... It's a game of chance and luck.

PayPal is made up of individuals from a variety of backgrounds.

One employee might think your offer or site or whatever is against their TOS.

Another might think it's fine.

On different days those employees may think the complete opposite.

I think it matters who is reviewing your account, etc.

I don't sell "get rich quick" but try making that case to a PayPal employee with limited knowledge of our industry.

You can have screen shots and make income claims and still not be "get rich quick."

So according to the PayPal TOS you're in the clear.

According to some jackwagon who works for PayPal, you're selling get rich quick products.

Also for some reason I've noticed that people who do an incredibly large volume of sales who normally don't, or they have a lot of membership site subscriptions coming in, seem to draw the eye of the employees you don't want looking at your account.

All-in-all... ya, any one of us could get tanked by the right employee.

So what do you do?

I don't know... 2CO Checkout and ClickBank both offer PayPal... that's one alternative even though there are drawbacks like high refund rates or high fees.

You just got to roll with the punches.

Sometimes in business you get kicked in the teeth.

I think it's better to not worry about getting kicked in the teeth, and when it happens, it may not be all that bad.

You might find that... hey... maybe it's time to grow up and get a REAL merchant account anyway.

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Shane N

14 years ago

I know this conversation started being mostly about PayPal's new API...

To me, the most important thing for us IM'ers to worry about, is what exactly PayPal considers to be against their TOS when it comes to our type of business...

This is how PayPal defines a "get rich quick" scheme:

A "get rich quick" scheme -- Such programs include any kind of self-employment, start-up business, or investment opportunity that makes unrealistic or unsupported claims about profits or return on investment. An example of this is a program that offer “deals” on speculative real estate or non-development property. Or, a business that functions as an auto-surf investment program or high-yield investment program.

Taken directly from their site, here: https://www.paypal.com/helpcenter/ma...030&isSrch=Yes

Best,
Shane

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tecHead

14 years ago

Originally Posted by Shane Natan

...

This is how PayPal defines a "get rich quick" scheme:

Taken directly from their site, here: https://www.paypal.com/helpcenter/ma...030&isSrch=Yes

Best,
Shane

For the life of me, I really don't see why (certain) people wanna make this very simple explanation; (which also happens to be the standard definition used by the FTC); so complicated.

Simple... if you can't back up EVERYTHING YOU SAY on your sales page with hard nosed facts, then don't put it on the sales page. PERIOD.

What's so hard about that??

When you start quoting numbers; no matter how hypothetical; you're going off the deep end UNLESS you can substantiate those numbers with verifiable proof that spans across more than a few similar scenarios.

For instance... instead of...
Go from $10 to $20,000 in no time, at all!!

...which is so open for scrutiny that its pathetic; but people actually USE crap like this... and you've seen it (might have even used it)...

Say...
IF you sell JUST 10 units per day for as little as 6 months; YOU just make $18K!!

... now you've actually done some legitimate math AND made things sound more realistic WITHOUT taking away the excitement.

Get it wrong.. get shut down... lose money.. bitch about oh woe is me.. simple.

PLP,
tecHead

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LB

14 years ago

Say...
IF you sell JUST 10 units per day for as little as 6 months; YOU just make $18K!!

... now you've actually done some legitimate math AND made things sound more realistic WITHOUT taking away the excitement.

I suspect this is just as bad. I mean, why not say they can sell 1,000 units per day? This all goes back to "typical" performance and illustrative claims.

The above is, if I recall correctly, very similar to what got Kern in trouble with the FTC.

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Johnny Slater

14 years ago

It seems to me that considering that you have several people in this thread who have based their entire business model around PayPal payments, those including Sid, Big Mike, myself, and others, it would be wise to listen to those who have invested so much time and effort in making sure that their products are in fact not going against the TOS of PayPal and have in fact ran for years with no problem at all.

Solutions such as WSO+, RAP, my product which I wont mention as I'm not currently selling anything these days, Big Mikes solution, and several others work on the instant payment system and many of them have been working with no problems for years.

The facts are simple. All of these programs have been looked at and vetted by PayPal many times over and not once has there been more than a minor issue that was taken care of almost instantly.

Anyone saying PayPal has a problem with instant commission systems needs to be taken with a grain of salt. First, look at their motivation for saying what they are, what types of competing products they are selling, ( having a product for sale that trashes instant commissions lowers your ablilty to have an objective conversation about the practice, regardless of best intentions) and what type of proof each side offers.

The people selling instant commission solutions have taken great pains to make sure that the solutions are well within the PayPal TOS and have had their systems vetted more than once in most cases.

Unless you are a solution provider who has talked to PayPal about your specific solution, then anything you say about what is accepted and not accepted is nothing short of conjecture. It doesn't matter how many times you have discussions with PayPal, or how many different people you go through, unless you can show specifics about your own product you are not stating facts.

The facts are this: PayPal is NOT going to give a clear answer to anyone about what is within the TOS unless they are the actual creater of the product. You can get best guesses or opinions, but unless you are the product creator and are going through the approval process yourself you are not getting an answer that you should be hanging your business on.

I have personally had more than one discussion with PayPal about instant commissions. I have created not just one but at least 4 different types of systems using pretty much every concievable method of doing instant commissions in my research while coding some of the project I was working on before my wifes auto accident. Those will have to wait but at some point I might get a chance to impliment them all. The point is, I have had every single method of instant commission system mentioned in this thread personally verified by PayPal myself.

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GarrieWilson

14 years ago

I'd be surprised if she even did that. I do know from her WSO that she did NOT test ALL of the options available and I'll repeat, everything she's saying is pure hyperbole to help promote her own solution. She's trying to present herself as a financial expert, with some "inside" information or special insight, but there's no ready proof of that either.

Oh their is a WSO...

Now that changes how I look at her comments.

The only 'empirical data' that exists would be... oh, I don't know.... maybe the fact that real merchant accounts require RESERVES for cushioning against refunds and chargebacks?

Actually, they all don't. My brother just opened one at his local bank and it has no reserve holding. 100% is batched on a daily basis. They can take refunds from his checking account.

There is no way that PayPal has to be assured that they will be able to recover losses paid to that affiliate, in the event of a chargeback.

They COULD go in and take the refund... if there's money in the account.
They COULD go into the backup funding and take the refund... if there's the money in the account...

If there is neither, recovery costs may dwarf the amount of the transaction in question, forcing them to absorb the loss...

PayPal does not consider the affiliate as an affiliate. They are the seller as far as PP is conserned. And I'd bet legally too. The transaction is between the buyer and person accepting funds. Not the name on the sales letter.

-g

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VanessaB

14 years ago

Garrie,
If you were PayPal, would you want any party accepting credit card payments through you, to have 'reserves' to serve as a cushion for possible chargebacks?

Knowing that without out, they could empty their PayPal account and backup funding source in very little time... compared to how long it could take a chargeback to hit?

Would you want to incur the recovery costs of using debt collection solutions for what could be a very small chargeback amount in comparison?

There are major differences in your brother's bank account and PayPal...
Your brother's bank account is not automatically rotating or splitting all incoming transactions, instantly at the point of sale, and sending funds to another party, least of all, his 'sales forces' commissions.

Did your brother have a credit check done?
Show 3 years tax returns, personal and business?
Show his business occupational license?
Articles of incorporation?
Banking history?
Cash Reserves?

The most important difference is that the 'bank' is not sending payments to a 3rd party, who they know nothing about, instantly on every, or at least multiple, point(s) of sale.

-Dani

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Tom B

Banned 14 years ago

Originally Posted by DanielleS

Garrie,
If you were PayPal, would you want any party accepting credit card payments through you, to have 'reserves' to serve as a cushion for possible chargebacks?

Knowing that without out, they could empty their PayPal account and backup funding source in very little time... compared to how long it could take a chargeback to hit?

Would you want to incur the recovery costs of using debt collection solutions for what could be a very small chargeback amount in comparison?

There are major differences in your brother's bank account and PayPal...
Your brother's bank account is not automatically rotating or splitting all incoming transactions, instantly at the point of sale, and sending funds to another party, least of all, his 'sales forces' commissions.

Did your brother have a credit check done?
Show 3 years tax returns, personal and business?
Show his business occupational license?
Articles of incorporation?
Banking history?
Cash Reserves?

The most important difference is that the 'bank' is not sending payments to a 3rd party, who they know nothing about, instantly on every, or at least multiple, point(s) of sale.

-Dani

Hi Dani,

I know you are trying to avoid this thread... haha

I am not sure if you are purposely trying to be obtuse since I have stated many times that just about everyone who tries to take money out of paypal needs to go through Paypal's verification.

So I don't understand how you can continue to talk about affiliates getting paid without them being verified.

I never had to show Paypal tax returns,
I never had to show Paypal business licenses.
I may have faxed over articles of incorporation.
I never had to show Paypal banking history.

Paypal will put cash reserves on your account based on their internal checks. I never had cash reserves put on my account but I don't empty it either.

If someone wants to take money out they need personal verification, they need bank accounts and credit cards attached to their account. I believe Paypal will do credit checks on you. Otherwise, they are limited to how much they can take out of their paypal account.

It seems like you continue to look pass all this and state affiliates are more risky when they are the same risk as any vendor.

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GarrieWilson

14 years ago

Originally Posted by DanielleS

Garrie,
If you were PayPal, would you want any party accepting credit card payments through you, to have 'reserves' to serve as a cushion for possible chargebacks?

That's not the topic but if I was PayPal, it would depend on the amounts coming in and the regularities. If its 200 days, then bam 20k, id get a reserve and freeze.

There are major differences in your brother's bank account and PayPal...

Umm. If there are major differences, why do you keep refering to them? YOU are the one who said even real merchants account require reserves.

I pointed out that not all of them do.

Please dont make comparisons when it suits to only say "but they are different" when you are corrected.

Did your brother have a credit check done?
Show 3 years tax returns, personal and business?
Show his business occupational license?
Articles of incorporation?
Banking history?
Cash Reserves?

Actually, yes on some, no on others but it's mute. Remember, they aren't the same.

The most important difference is that the 'bank' is not sending payments to a 3rd party, who they know nothing about, instantly on every, or at least multiple, point(s) of sale.

But they could. If everyone had a merchant account. Or if everyone used that new terminal ap for smart phones.

The most import thing is PP is not a bank. The second most important thing is the contract is with PP, the payor and the payee. Not the name on the sales letter. You seem to miss that. Guess it doesnt help your WSO.

-g

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GarrieWilson

14 years ago

BTW:

PayPal uses checking and CCs to verify because those items ALREADY passed a credit history or other checks. No reason to reverify when it's not always needed.

FYI:

I changed business info on my account and had to send:

- copy of ID
- state businesses license
- two utility bill or statements
- FEIN and SS of contact

and a few other items. They do checks when needed. Most people are small users and its not needed. The risk doesn't outweigh the cost.

-g

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Alan Petersen 14 years ago

I read a book from Dan Kennedy about doing business back in the good old days before the Internet and the direct response info marketers would get their merchant accounts frozen as well.

This has been going on for a long time, BPP (before PayPal). The message (hype, bold headlines, get rich quick etc) seems to be the culprit jamming folks.

I used to be an EDI analyst for Wells Fargo and the triggers have always been dollar amounts not xyz software. That was over 12 years ago though.

Your money is frozen by an automated process so that's why when you call and talk to a phone rep you can get 10 different answers depending on the rep and their knowledge and experience.

A lot of the times we would have to meet to try to figure out why it happened. It's just the way it is in a big corporation. Once the code is in, it's hard to get it out on the bank side. Probably similar with PayPal.

If anyone here expects this to be black and white or that they'll find a smoking gun... good luck with that. Not gonna happen.

Worry about what you can control. Like your sales copy, message, headline, income claims, etc.
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Targeted Traffic

14 years ago

There will always be an alternate process...in this business someone will always find a way

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VanessaB 14 years ago
I did not and do not want to be involved in this thread.

In spite of the 'misinformed' participant who tried to make me the villain early on in this thread by insinuating I started the rumor, (which was actually started a week or two prior to when I went public with my thoughts, by someone who said their friends account was frozen and was told by PayPal that they were 'watching' WF and W+)... but obviously, that fact wasn't suited to his suited to his plan to make me out to be the bad guy. I guess that 'fact' wouldn't have helped his cause.

Even then though, I stayed out of this.

I was told that someone was 'demanding' proof of the emails I had... and I agreed to post them.

And since my sig is turned off, and has been for a few days before I even got involved in this thread, the remarks about what this conversation does or and doesn't 'help' are more than out of line.

Since I posted them, the topic derailed to all sorts of things that once again were not the topic... namely, the post referring to my posts, not on this thread, about my belief, just so my belief could be dragged into this...

I have fully explained more than once now, why I think instant commissions are a risk, and why I think PayPal won't admit it, but instead will do an internal sweep to start 'vetting' accounts that use them, forcing them to accept accounts with reserves or bow out of the game.

Here they are, for the last time:
- Chargebacks can come back to an account with no funds. Call the receiver whatever you want, affiliate, seller, equity partner... chargebacks can come back to an account with no funds in it.
- The backup funding source could also be depleted of funds.
- The cost of recovery outweighs the cost of an individual loss.
- Individual losses add up to much greater losses, but recovery would still have too many 'individual' costs to make recovery 'cost effective.'
- Verified and vetted are two different things- my account is verified, I have no withdrawal limits, and no rolling reserves... but if they started to see an influx of payments coming from multiple domains, and multiple different products, they would see it as a risk... (and I happen to fully believe that no matter what you call them... they're still 'affiliates' and PayPal knows that.)
- I believe the what we are seeing with the 'sweep' is PayPal's quiet way of forcing anyone with a certain 'volume' of transactions like these into accounts with rolling reserves to mitigate their risk and their losses.
- The easiest way for them to do this is to find the copy that shows a blatant violation of the TOS and sweep them first.
- Yep, we used direct mail marketing campaigns, we were careful with our copy and we still could get frozen for too many chargebacks, which is why different promotions went to different merchant accounts.
I went out of my way to try and get the facts, straight from the horse's mouth, and I posted what I discovered here... though I did not have to bother to share it at all.

I will not share another thing on this subject, in this forum.

I have no sig , my WSO is ancient by WF standards, and I've decided not to promote anything else related to the matter on this forum for the foreseeable future. I posted the emails here 'at someone else's request'.

You either believe the risks or you don't.

There won't be any 'empirical data' other than the conclusions YOU can draw about chargebacks, and how empty accounts and costs of recovery affect that.

You can also do your own research on risk management and mitigation.

If you don't believe there is any risk... then continue on with your business as you see fit.

-Dani
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Matt Poc

14 years ago

Yeah, mine PayPal account was effected as well. I will use only Clickbank for now.

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tecHead

14 years ago

Sid...

When I said this...

Originally Posted by tecHead

It seems to me that PayPal is considering the instant payments to affiliates; (in the manner they're being conducted); to be one party accepting payments for another party... that's actually a very old merchant account violation instituted by Visa/MasterCard International.

It was in direct response to the post(ings) regarding PayPal's response to DaniellS' eMail(s).

Therefore, you're taking what was said out of context without referring to what they were directed at, in the first place.

Secondly, the quote from me...

Originally Posted by tecHead

I (personally) think its a good thing; as instant affiliate payments are great for the affiliate but not so good for the merchant. The merchant is always going to be the one left holding the bag should things go bad.

"I (personally) think..." qualifies that statement as an opinion; therefore, emphatically exclaiming that its "not true" is (again) out of context.... I never made the mistake of labelling the statement as fact.

Disagreeing with me is a totally different animal and totally within your rights.

Peace

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Sid Hale

14 years ago

My apologies on both counts.

I went all night without being able to get to the third page of this thread (still can't in Firefox), so when I finally got through the door using Chrome, I was running around like a chicken with his (her) head cut off.

Must pay better attention.

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tecHead

14 years ago

Originally Posted by Sid Hale

My apologies on both counts.

I went all night without being able to get to the third page of this thread (still can't in Firefox), so when I finally got through the door using Chrome, I was running around like a chicken with his (her) head cut off.

Must pay better attention.

no worries, bro

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RussRuffino

14 years ago

Never mind. :-)

Russ

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What are RAP and WSOplus affiliate platforms going to do?

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