Although Paypal is the most popular online payment platform today, it is not well suited for the growing number of online services that charge a monthly fee.
The current solution that Paypal provides is fairly limited. Basic functionality, like changing the service fee directly from the service upgrade page, is just not there. Every time a customer wants to upgrade or downgrade they need to re-enter credit card information.
Another problem is the lack of seller protection. If you can’t provide a shipping tracking id, any customer can ask for a refund. Even months after the service is paid for and provided. Last month when I found myself in this exact position all paypal did was suggest I’d take my claim to small claims court. For $ 50? I don’t think so.
Hopefully this will change with their new platform.
We will be attending most of the business development sessions at the PayPal X Platform conferences (and have planned a few inteviews with Paypal executives) to find out if the payments service is finally suited for your standard freemium based services.