Topic: Why is it risky to use Paypal with an escrow service? (Read 840 times)
A chargeback will affect a chain of transactions, so the escrower will have his incoming transaction cancelled and his outgoing transaction cancelled.
A chargeback would have an affect. PayPal would remove the funds from the account leaving a negative balance and the escrow having a choice whether to reimburse PayPal - and becoming out of pocket. Or being in debt to PayPal for the amount. Not good for the escrow only trying to help.
I know that chargebacks may be used for direct transactions, but escrow is a little different. Let's say the escrower has received USD and BTC. Then he releases the USD to the seller and, only after this (he no longer has the money so any chargeback won't have any effect), sends the BTC to the buyer. For all other kinds of sales, escrow works this way and works wonders, but why is it different for BTC?
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