Many small businesses that deal with PayPal do so because they don't see any viable alternatives. In some cases, however, I wonder if these companies are really aware of the risks they are taking.
Do a little digging, and you will discover that PayPal's customer service record is nothing short of horrific. The company is notorious for quietly jacking up its transaction fees, and a small army of Web sites are dedicated to publicizing complaints about the service.
PayPal's pat response to such complaints reminds me of Lily Tomlin's spoof of The Phone Company: "We don't care. We don't have to."
For small businesses that rely upon PayPal, however, this is a deadly serious business. Many complaints involve cases where PayPal has frozen seller accounts without warning or explanation. These incidents can take weeks or months to sort out — and if a cash-strapped business doesn't survive the appeals process, well, that's just too bad.