Sample Deal Review
This is not a legal opinion, but my opinion of the agreement's impact on our business, with some remarks about its suitability for small publishers. Your requirements may be different than mine, leading to a different assessment of the agreement.
This document assumes that you have a copy of the proposed contract. It is intended to draw your attention to points that may make a difference to the client. Conclusions are signaled by bullets. And, now, without any further ado, . . .
It continues to say that Paypal won't voluntarily make those funds available to its creditors in such a case. I doubt that any company would. But I also suspect that it may have no choice.
Lastly, it notes that you remain the owner of funds sent in payment, until the recipient accepts them.
Sections 2.3,2.4, and 5.1 make it clear that you have all the risk of accepting payments from credit cards - chargebacks, fraud, etc.
They will insulate themselves from this risk by seizing the money for the chargeback from your accounts (Paypal first, then your bank account). But so would your merchant account clearinghouse.
Section 5.3 limits the size of your withdrawals. This could be an issue, especially if you can't get your limit set higher than the largest of your normal daily receipts.
Section 6.2 mentions a possible deal killer, if this will be your only avenue to accept credit card charges: no AmEx Corporate cards may be accepted through Paypal.
Also,Paypal has the option to charge $1.95 for membership, which is later refunded.
Paypal's return reserves (section 10) are no worse than those of larger publishers, and with much the same sort of justification.
Section 16.4 asserts that the first filer gets to chose the method of dispute resolution, which could land you in court in Paypal's home county.
Section 2: The policy on closing accounts does some good things for you. It says that if buyers are chargeback maniacs, or if they constant circumvent Paypal's dispute resolution process, or try to get a bank generated chargeback and a refund from you, then their accounts will be closed.
It also says that an account logging in from a banned country will be closed.
Paypal can now handle international members.
Paypal's Business account has a very good feature: it allows the primary user to set up secondary users with (potentially) limited access. It also hangs all the risk of embezzlement on the account owner.
Paypal Shops requires you to have a Business or Premier account, and a Money Market fund account.
I did not review the Seller Protection Policy, Buyer Complaint Policy, or the Money Back Guarantee, as they apply only to tangible goods, which I neither buy nor sell through Paypal. A cursory glance seemed to show that they were not unreasonable. For example: they need proof of delivery if the customer claims non-delivery, etc. I also ignored the Bill Pay Policy, as I prefer to manage my Accounts Payable differently. As for the ATM/Debit card policy, I decided that the limits were so small as to be of no interest to me, and read no further.
Altogether, I believe that the new User Agreement is acceptable for Gropen Associates, although we have chosen to process credit cards in a different way. The risks and problems inherent in the system are manageable, and the limitations can be sidestepped if you have alternate ways of accepting payments. This may not be true for all.
Please also note that this analysis is not assessing the charge structure, or comparing it to other alternatives.
Gropen Associates provides solutions to financial, accounting and management problems to publishers. Our services include inexpensive software packages and reasonably priced, individualized consulting.
The information above is presented to complement our services. If you have further questions or need more detail, please contact us.