We recently switched to PayPal as our payment processor here at LingQ. For a number of reasons it made sense for us. Most importantly it provides more payment options than our previous processor Moneris did. Moneris only accepted Visa, Mastercard and Amex while Paypal accepts all credit cards and payment by bank account, PayPal account, echeck and various debit card systems around the world. Also, since make many payments out of PayPal to other service providers, it is more convenient to receive payments in the same account.
Today, I phoned Moneris to cancel our account there. Moneris is owned by two of the biggest 5 Canadian banks, Bank of Montreal and Royal Bank of Canada. It turns out that it’s going to cost us to break our contract with them which runs through to sometime in 2011. When I asked how I could have a contract until 2011, I was told that I signed an initial 3 year contract in 2005 which renewed automatically in 2008. All of which is undoubtedly true and I’m sure was in the fine print during the signup process.
That doesn’t make it any less shady in my opinion. There is absolutely no reason for there to even be a contract, as far as I can tell. I certainly don’t have a contract with PayPal. It’s those types of business practices that you can get away with when you’re so big and the only game in town, which they were when they launched way back when. But today, through the power of the internet, there are lots of payment providers and once the word gets out that Moneris operates like this, you would hope that they would suffer the consequences.
We certainly paid to break our contract with Moneris and considered ourselves lucky to have escaped their clutches.