I use paypal currently for taking damage deposits, but have just had a very bad experience with this. Guest stayed in our apartment and caused significant damage. We tried to with-hold the deposit but paypal returned it to guest and found in their favour since the guest claimed 'goods were not received' despite me explaining this was a damage deposit to paypal and providing photos of damage and invoices of costs incurred to repair and clean the apartment. Paypal did not consider any of this evidence, only that I could not provide a tracking number!
I need to rethink the way I take deposits. How is everyone else doing this please? This experience has really put me off!