Payment gateway nightmares

I have read and googled about dropshippers using PayPal and other payment gateway services and the nightmare of having their accounts frozen for extended periods which makes the sellers unable to pay their suppliers and satisfy their customer's orders. Also destroying their drop ship businesses via the wrath of angry customers who paid for a product but are not receiving their paid item on time. I understand because of potential charge backs, refunds, etc. that a reserve is held in account but some of the stories I have read, mostly regarding the use of PayPal, gives one serious pause to attempt starting a drop ship online business for fear of money being held for indefinite periods for some times nebulous reasons by PayPal and other payment gateway services. Does anyone know of Payment gateway services that at least operate with at least some amount of fairness and some sanity or are they all like this? Does anyone know anything about a payment gateway called Magic Pay? I'd like to hear some stories from anyone who has gone through these payment gateway hell rides and how they were able to settle it and not totally torpedo their online business or have angry customers threatening legal action against them.

I haven't heard of Magin personally, so can't comment on that one in particular. However, it is quite coming for new accounts to have some trading restrictions attached to them from merchant gateways to protect themselves

What can usually help is to give the payment gateway as much information about you up front as is possible. Let them know what your trading intentions are, the amount of money you expect to be going through your account and so on. It's all about building a relationship with them before you have the need to.

I'm not saying that will work every time, but you might be surprised at just how well being proactive in these types of matters really helps a situation.

Most people don't worry about doing that, they charge head long into a nightmare and then wonder why they get the hammer dropped on them and when trying to then resolve the situation, the merchant not playing the game they want them to play.

The safest option for new accounts, start with a few very small sales that you have the funds to cover up front yourself. Then ensure you get tracking information provided to the merchant asap to grease the wheels. Then slowly move up in value so you don't scare the merchant and it throws a red flag from out of no where.

Use that strategy, along with good upfront open communication with them and you're putting yourself in the best possible position NOT to have any major drama with extended account holds.

Cheers

Thanks Mark for the detailed information. I will follow your sage advice.

No problems at all.

It's one of those of those situations where you plan for the worst and hope for the best lol, but good open communication can go a long way to resolving problems with merchants long before they become problems to even start with.

:)

Hello titagleaves,
Yes I can confirm paypal is a nightmare. While I have never had a problem with them several family members have.
My brother in law had $20k frozen 1st week december last year and not released til after xmas. Well lost his customers
and his online shop. Horrible. No reason from paypal other than sudden increase in sales...wow.
We use primarily Stripe for checkout on our websites. While we do have paypal option most people prefer credit card checkout.
Been using Stripe for over 2 years and never a problem.
Hope that helps.