Temporary restriction on accepting payments via PayPal


This week we had to suspend accepting payments via PayPal. We’ve kind of run out of patience. Why, you ask? We will explain in the following paragraphs.

PayPal payments are popular because they are easy and fast. In our country, we have accepted about 7% of all payments via PayPal and it has been gradually increasing. But from a seller’s perspective, PayPal is one of the worst services for receiving payments.

What’s the problem?

There are basically two problems here. One of them is the relatively high fees, which have increased because the Czech Republic has been classified in the worse Europe II band. Interestingly, Slovakia is in a better Europe I. The second problem is the very easy abuse, with virtually no possibility, on the part of the seller, to defend themselves.

If someone pays us via PayPal, we always pay a fee of 10 CZK for each payment plus 2.7% of each payment, including VAT. This bothers us the most for domains that we offer at purchase prices.

For the most popular .CZ domains, the fee will cost us 14.74 CZK (approx. 10.17%). For promotions such as the .EU registration with the EU45 coupon for 45 CZK, it is even 25%.

Since we sell domains at purchase prices, without a margin, we make a good profit on each domain.

We are the registrar of more than 326 thousand domains. If 7% of orders (registration and renewal) go through PayPal, the annual cost is in the hundreds of thousands of CZK. All the time we tolerated it and suffered in silence. They were losing tens of thousands of crowns every month…

For other services, we covered the costs from the margin. It was worth it for the convenience for the customer to pay in their preferred way.

In addition to high transaction fees, PayPal also has a big problem with currency conversion fees (3.5%-4%). Of course, it doesn’t stop there. It is also necessary to take into account the very unfavourable exchange rates, where we lose another few percent on individual conversions.

However, what has recently started to put a really big wrinkle on our foreheads are the scammers and Paypal’s policies. As we grow, so does the number of payments made via PayPal. We are becoming better known not only at home but also in the world. This has also brought an increased number of requests from “customers” claiming refunds because their PayPal account was allegedly misused or claiming that they did not place the order.

We have always explained everything to PayPal honestly and patiently. But it always turned out the same. “We have to protect our users and you as a businessman are out of luck.” Something along the lines of “don’t you like it? Don’t use PayPal!”

They took our money, of course. Without any compensation. As a result, we registered domains for our “customers” and they got domains for free. We had to pay for the domains and each domain was a 100% loss for us.

It’s cost us more and more every month. Recently we just ran out of patience and said enough! We have suspended PayPal as a payment method.

What’s next?

We’re wondering what to do next with PayPal. We know that many of our customers find it a convenient method of payment for services and are happy to use it. However, under current conditions, we do not intend to re-launch PayPal payment.

Of course, we have already considered some options. For example, we could allow PayPal payments to loyal customers who have been with us for a long time and we trust them. We don’t even mind the fees for those. On the contrary. We have been thinking for a long time how to reward loyal customers.

Another option is to allow payment via PayPal only for selected services. If someone doesn’t pay for the web hosting, we shut down the service, unlike the domain, which they transfer elsewhere and we are out of luck.

We are also considering PayPal payment fees. These fees would not only cover the disproportionate extra costs, but also create a reserve to cover fraud losses. If the services are cheap, like our .eu domain on sale now for 45 CZK, PayPal fees are 25%. We need to compensate for this somehow and ideally show our customers that there are other payment methods.

We will definitely have to address the situation. PayPal is a popular method after all, and we are about to launch WEDOS Cloud, where payments will also be for hourly use. There we will have to solve auto-ambient credit top-up somehow and PayPal can do this. We will also use it for the upcoming container rental service.


We apologize for the current situation. We’ll see how it goes from here. Due to our openness, we inform about all the reasons.

We also want to educate our customers and highlight similar issues. If problems like this are not talked about publicly, they will exist and we will never get rid of them. With Section 7b, we have succeeded at least in part. Since we started to publicly address this and some politicians got involved, we have not received any further requests for a shutdown.

Next time we may write about our negative experience with advertising on Seznam and their Sklik system. Their specialists can spend hundreds of thousands of crowns in a few hours without any benefit. We did a test with them and had them (their specialists) set up the campaign (in the best possible way) because they promised us perfect optimization just for us. The result? Hundreds of thousands spent in a few hours, sometimes in the wee hours of the morning. The immediate rate of leaving the site is practically 100%. Probably robots. It cost us hundreds of thousands and Seznam is surprised that we are angry… Next time we’ll write about this and maybe you’ll forgive the overpriced online advertising and change your mind. Just like us.