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Sellers Deal with Fallout from PayPal Outage

PayPal’s international Columbus Day weekend meltdown appears to be over. The site is up and responding to most visitors. Money is flowing and shipments are rolling again. But like Mount St. Helens in 1980, the fallout from PayPal’s cratering will continue for a long time. Sellers are still digging themselves out from the ashes, seeking […]

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Channel Insider Staff

Oct 14, 2004

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PayPal’s international Columbus Day weekend meltdown appears to be over. The site is up and responding to most visitors. Money is flowing and shipments are rolling again.

But like Mount St. Helens in 1980, the fallout from PayPal’s cratering will continue for a long time. Sellers are still digging themselves out from the ashes, seeking buried treasures.

“My daily PayPal sweeps [electronic funds transfers from one’s PayPal account to one’s real bank] haven’t been getting into my bank account for the last two days,” wrote Rita A. Berkowitz, an eBay reseller of high-end electronics and computer components. “I checked my bank account and nothing, not even an immediate notice of pending transaction like I normally get.”

Click here to read about how eBay is trying to woo VARs.

Some sellers have reported total failure of PayPal’s e-mail notifications of payments received. Most cite less severe disruptions, with up to 30 percent of payments received failing to trigger e-mail notifications.

Many sellers rely upon e-mail notifications of received payments in their business processes, using the messages to trigger order pulling, packing, printing of shipping labels and other tasks. Today, they must resort to the payment detail pages on PayPal’s site, further burdening the still fragile and sluggish system. This manual process also slows order processing and takes sellers away from other important tasks—such as pulling their money out of PayPal as fast as possible.

PayPal debit cards, issued by Bank One Corp. but processed through PayPal, are working again for virtually all cardholders. Some, leery of what might happen during the three-to-four-business-day limbo in which funds languish while being transferred from PayPal to real bank accounts, are raiding ATM machines to withdraw their maximum daily allowances of cash.

“We told the rep that we’re discontinuing PayPal as a payment option at our Web site until they call us to advise us of the exact nature of the problem and what they’re doing to minimize such incidents in the future. They should consider compensating all of us for the damage they’ve caused.”

Brent-Krueger now accepts three credit cards, money orders and checks. PayPal’s woes may become wows for other payment systems. But the vast majority of sellers seem stuck in this ancient bit of folklore:

Place a frog in a pan of boiling water and he instantly leaps out. But place him in tepid water heated slowly to boiling and he will sit there until well done.

David Hakala is a veteran technology journalist and eBay seller based in Denver, Colo. He is currently writing his first book in over 10 years, under the entirely too long working title, “The Kingdom and the Power and the Glory of eBay: How and Why ‘The World’s Online Marketplace’ Succumbed to Fundamentalist Right Wing Nut Jobs, And What You Can Do About It.” He can be reached at dhakala@dahdistributing.com.

Check out eWEEK.com’s Web Services Center for the latest news, reviews and analysis in Web services.

Sellers Deal with Fallout from PayPal Outage

Channel Insider Staff

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