Comments for 2008 Web Predictions

PayPal Subscriptions Down For Second Time in 2007

2007-12-31T18:57:23Z

Having your service go down on your customers is certainly not a great way to close out the year. But PayPal developers are reporting that subscriptions are down, and have been for a couple of days. This is the second time this year that PayPal has experienced an issue with processing of subscription payments. In September, TechCrunch reported on an outage at PayPal that lasted a few days.

]]> A message posted on the PayPal developer discussion boards by forum moderator "Frank I." assured developers that the company was looking into the problem. "We are currently investigating the issue. We have gotten the resources necessary to clear this issue," he wrote. He did not give a time table for when the problem would be solved.

According to David Ciccarelli, the CEO of Voices.com, who alerted us to the outage, the timing could not be worse. "This seriously effects our calendar year-end numbers as I'm sure it does many other businesses that utilize PayPal for managing website subscription payments," he told us.

A serious outage also afflicted the company in October 2004.

One thing all of these outages have so far had in common: they haven't done too much to hurt PayPal's business or let competitors gain some market share. Even now that seems unlikely. PayPal's two biggest competitors are Google, whose Checkout service doesn't support recurring subscriptions and Amazon, whose Flexible Payment Service does offer subscription functionality but is in limited beta and not available to everyone. Other than PayPal, the only other option for most sellers is going with an often costly full merchant account.

Comment from Markus Robinson on 2007-12-31

2008-01-01T00:03:42Z

Great Post, can someone suggest a good full merchant account service?

Comment from Alex on 2007-12-31

2008-01-01T01:25:02Z

PayPal is the most frustrating company I have ever had to work with. Don't ever forget your password. Their customer hostility department will go to unimaginable lengths to ensure that you get bad service. To this day despite many many calls, emails and faxing copies of my drivers license etc. they still have hundreds of dollars of my money and I don't appear to have any recourse to get it back. It would be a very happy day to read about them earning their rightful place in the deadpool where they belong.

Comment from Josh Catone on 2008-01-01

2008-01-01T20:24:27Z

@Markus: my friend John runs a good site about merchant accounts that has some useful articles about how to pick a good one: http://www.merchant-account-services.org/ Hopefully that can point you in the right direction.

Comment from Easy Weight Loss on 2008-01-02

2008-01-02T15:15:00Z

Fortunately I don't need to offer subscription payments on my weight loss site - it's a single payment Paypal button.

But I've seen the disruption it causes when Paypal's subscription mechanism isn't working in a logical way.

Seems like the net is crying out for a Paypal 2.0 type of payment processor that actually cares about its customers. Full merchant accounts may be wonderful, but they're not for everyone whereas Paypal was supposed to be.

Comment from Pat Marcello on 2008-01-02

2008-01-02T19:00:59Z

I've never had a problem with PayPal in the about 9 or so years I've been using it, but I have heard horror stories. I'm just keeping my fingers crossed and looking for a merchant account that's affordable.

But I have to say that as far as reputation goes, PayPal is squeaky clean. People trust PayPal.

And all websites have issues at one time or the other. I don't know that I'd be too quick to dis PayPal for a couple of outages, as long as they fix the problems quickly and make amends. It was certainly bad timing, but you can't tell me that these quirky issues haven't happened to you if you've been in online business very long.

--Pat

Comment from Baby Products Online on 2008-01-04

2008-01-04T16:05:52Z

It sounds scary when a giant online payment site like Paypal can go down a few days for a particular service they carry. I hope Paypal can dedicate more energy and resources to their system to make sure that sure downtime don't happen again in future.

Comment from Soft Traker on 2008-01-21

2008-01-21T11:15:28Z