I wrote several posts regarding my experience with PayPal in the past and I feel obliged to write this post. There are many reports over the internet describing the pain and agony PayPal merchants go through. Sure, some of them are bogus and were written by competitors. This one is not.
Jacob Gorban of Apparent Software is a colleague of mine, running a Micro ISV specializing in Mac software. He decided to do a small promotion which caused a "spike" of sales. This triggered the PayPal anti-fraud mechanism that decided to lock the account "for his protection". Eventually, he couldn't even accept payments of legitimate customers.
From there is was a slippery slope which included hours of waiting for customer care, faxing and emailing. Frustrated customers and lost funds. The bottom line: he lost business and some of the money got locked in his account for the next 6 months. Where I come from we say: "he paid with his health".
You should read the full post. It is fascinating. Fortunately for him, the post got some well deserved attention (there were so many hits that he had to upgrade his server at some point) over the blogosphere which raised the attention of PayPal. Eventually, the matter was resolved.
Personally, I am not surprised. I tried getting answers from their customer service before and it was a total nightmare (like calling the US customer service line, asking to be forwarded to international support and then being asked for your social security number) that resulted in no answers. Yes, I pay less commission when using PayPal, but is it worth it?
My mother used to say that "cheapskates always pay twice". I tend to embrace this and pay more for higher quality and better service simply because it saves me time and money in the future. I prefer using a Mac because I know it makes me more productive. I prefer hosting on SliceHost because I know I'll get excellent service and the resources they promise. I prefer renting an apartment with a private parking space (very expensive in Tel Aviv).
In fact, that's the point of nWire. You can work without it. However, it will save you time if you choose to use it. So, what's worth more? How's $60 compared to your time?
After doing some real-world calculations, my conclusion is that the difference between using an e-commerce provider (like Avangate or FastSpring) and working with PayPal directly is about 2.5%. This is after considering the "extra fees" like money transfer charges and currency conversion rates. Is it worth it?