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PayPal Apparently Costs Merchants Thousands of Dollars By Not Communicating
May 25th, 2008 at 7:30 pmSource:CenterNetworks
Last week I explained why startups should have status notifications for downtime, maintenance and any other customer communications. I assumed large companies already knew this but apparently not. The real question is: when should a company post a notice of an issue that they know about? My initial thought is immediately but clearly there are times when it makes sense not to post immediately — for example, a security hole.
A developer posted an issue with accepting payments on the PayPal message board on May 16, 2008. The issue centers around the ability to accept a payment when they country of the buyer and seller don’t match. When you select another country, a never-ending loop begins. It took PayPal 7 days to even acknowledge the issue.
PayPal has posted a message on their status page with a basic explanation. Apparently when they rolled out their last site update on May 15, 2008, the issue listed above arose. The issue still has not been resolved and no further status has been provided by PayPal.
Clicky CEO Sean Hammons has a good detailed explanation of the issue. Hammons notes that the issue, "has already cost us many many thousands of dollars in lost revenue." He goes on to say:
How many millions of dollars has this bug cost all of Paypal’s customers? I would be so ashamed of myself if I was the one responsible for this bug, that I would quit immediately and go apply for a job flipping burgers, because that would be more my skill level. It’s absolutely unbelievable for a company of this size, that so many internet businesses rely on to collect money from their customers, has had a problem of this magnitude for 10 days and counting. Un. Flipping. Believable.
The real question here (besides the apparent lack of ability to fix a basic HTML form) is why did it take PayPal a week just to document the issue?
Last year I was not able to claim payments received via PayPal and the overall outage became a huge story in the PayPal developer community.
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