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Good riddance, PayPal

elliotjaystocks.com

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Re: Good riddance, PayPal

#11

Post by patrickk »

Irfaan wrote: post #6
pytrin wrote: post #2

Paypal to me is the classical example of the incumbent growing stale and detached from its consumer base on which it built its business on. Sellers like Eliot are the bulk of Paypal's business - small businesses who needed a (relatively) easy way to start accepting payments online. Paypal is just giving every opportunity for someone else to come and get their market share. Hopefully it will happen sooner rather than…

If PayPal is so very terrible (and I believe it), Is there a reason Amazon Payments or Google Wallet haven't overtaken PayPal in this market? If neither Amazon nor Google's brand recognition hasn't convinced folks (buyers or sellers) to start pushing it instead of PayPal for Internet purchases, I can only hope it's because their solutions are equally terrible - otherwise, I have a hard time seeing how a new player wi…

"If PayPal is so very terrible (and I believe it), Is there a reason Amazon Payments or Google Wallet haven't overtaken PayPal in this market?"

eBay would account for some of it. Also, payments is a relatively highly regulated market globally, as evidenced by Stripe trying to expand internationally.

Re: Good riddance, PayPal

#12

Post by dangrossman »

The premise of his "vehemence" is untrue: banks can and do have the exact same policy regarding terminating merchant services accounts. They can terminate you at any time, without reason, and when they do so, hold any undisbursed funds in a reserve account for exactly 180 days. There is no regulation banks are subject to that PayPal isn't that would have an affect on that.

PayPal did not make up this policy; it's based on Visa and MasterCard's Operating Regulations, which predate PayPal's very existence. I have first-hand experience that not only is this in virtually every merchant services contract at every bank in the US, but it's actually enforced, exactly the same way PayPal enforces it.

8 years back I had a sudden influx of chargebacks from a single scammer that used a bunch of different cards on one of my websites to buy services, back before I knew how to spot that kind of activity. My real, regulated bank (First National Bank of Omaha) terminated my merchant account and held several thousand dollars for exactly 180 days with no recourse for me. They never saw another chargeback against my account, but I still had no access to that money for 6 months. Exactly the same as PayPal does when it terminates an account for activity it deems high risk.

Re: Good riddance, PayPal

#14

Post by mattmanser »

Irfaan wrote: post #6
pytrin wrote: post #2

Paypal to me is the classical example of the incumbent growing stale and detached from its consumer base on which it built its business on. Sellers like Eliot are the bulk of Paypal's business - small businesses who needed a (relatively) easy way to start accepting payments online. Paypal is just giving every opportunity for someone else to come and get their market share. Hopefully it will happen sooner rather than…

If PayPal is so very terrible (and I believe it), Is there a reason Amazon Payments or Google Wallet haven't overtaken PayPal in this market? If neither Amazon nor Google's brand recognition hasn't convinced folks (buyers or sellers) to start pushing it instead of PayPal for Internet purchases, I can only hope it's because their solutions are equally terrible - otherwise, I have a hard time seeing how a new player wi…

When Google Checkout launched it was in a right mess. I remember trying to use it and it silently crashed without an error. It was bizarre, all over the forums, no Google response.

It also had an even worse payment flow than paypal. Which is saying something.

You can't ignore early adopters like that so no-one switched.

Also seem to remember it didn't take payments from a lot of countries. Could be wrong.

Re: Good riddance, PayPal

#15

Post by pytrin »

Irfaan wrote: post #6
pytrin wrote: post #2

Paypal to me is the classical example of the incumbent growing stale and detached from its consumer base on which it built its business on. Sellers like Eliot are the bulk of Paypal's business - small businesses who needed a (relatively) easy way to start accepting payments online. Paypal is just giving every opportunity for someone else to come and get their market share. Hopefully it will happen sooner rather than…

If PayPal is so very terrible (and I believe it), Is there a reason Amazon Payments or Google Wallet haven't overtaken PayPal in this market? If neither Amazon nor Google's brand recognition hasn't convinced folks (buyers or sellers) to start pushing it instead of PayPal for Internet purchases, I can only hope it's because their solutions are equally terrible - otherwise, I have a hard time seeing how a new player wi…

Amazon payments would be a great alternative, main problem is that it's only available in the US (this is why Kickstarter is still limited to US projects btw). I'm not familiar with the details on Google wallet, but my hunch it's the same reason

Re: Good riddance, PayPal

#16

Post by jakeonthemove »

kevinconroy wrote: post #7

There's been a lot of PayPal hating on HN. I'm not trying to defend the horrible things that I've heard, but I, for one, am a happy PayPal customer. We've regularly moved thousands upon thousands of dollars a day for the last decade without any major issues. #YMMV

They seem to really hate any and all pre-sales, plus they have a list of "risk items" - if you're lucky not to fall into one of those categories, it's a happy life with Paypal for you :-).

Then there's their automated fraud prevention system that is just too trigger happy. As an example: I bought an item on eBay the other week and they refused to process the payment. A couple of days later I decided to try again before buying from another seller and it went through without issues.

Re: Good riddance, PayPal

#17

Post by dangrossman »

axefrog wrote: post #5
verelo wrote: post #4

Thank you for writing this, reiterates everything i feel about Paypal as well! We use Stripe and I couldn't be happier. Started with Paypal, wanted to shoot myself on a regular basis.

Unfortunately for Elliot, myself and the countless other non-Americans in the software development world, Stripe is not available (yet) outside of the USA. Stripe have stated that they're working very hard on breaking out into other countries, but I suspect it must be an immense job, what with all of the various existing bureaucracies and regulations present in each country. Hopefully we'll get some good news in the…

Even when it becomes available to merchants in other countries, it still won't let you accept payments from the dozens of countries where people use PayPal but don't have major brand credit cards. There's really no equivalent service.

Re: Good riddance, PayPal

#18

Post by mattmanser »

dangrossman wrote: post #12

The premise of his "vehemence" is untrue: banks can and do have the exact same policy regarding terminating merchant services accounts. They can terminate you at any time, without reason, and when they do so, hold any undisbursed funds in a reserve account for exactly 180 days. There is no regulation banks are subject to that PayPal isn't that would have an affect on that. PayPal did not make up this policy; it's bas…

Just to note, the's author's not in the US, he's in the UK and Paypal's a regulated bank over here.

I always have mixed feeling on these stories.

On the one hand, if you operate almost entirely online, you're in amidst a mass of scammers and conmen, it's a much higher risk, hence everything being more draconian. So there's always problems. Brick and mortar businesses are much less as there's a real presence, etc.

On the other hand, this is a long established business. Are they really that high-risk any more? Why are they treated like someone who's just started? Why can't Paypal treat them more respectfully as there's plenty of trading history. Why are there no mechanisms for establishing real identities that are much stronger than what they seem to be doing?

Re: Good riddance, PayPal

#19

Post by patio11 »

andr wrote: post #10

Does anyone have insider knowledge of why PayPal has been causing merchants so much trouble? It sure looks bad on the outside, but I'd be interested to hear their rationale.

To the extent this perception represents actual reality:

You know how every time a new payment provider comes up and people kvelch that it isn't available in their country and how no provider is? This is because every payment provider which attempts to hit as many countries as Paypal does dies. They're killed by fraud. (Fraud kills domestic ones, too, all the time, but it's marginally less frequent.)

Luckily, Paypal is an anti-fraud AI company which also happens to run credit cards sometimes. When in doubt, they will always come down on the conservative side. This is why they still exist. (Early in their corporate history they lost -- no kidding -- one hundred million dollars to fraud.)

This perception does not actually match reality, though: most people bitten by this are unaware that similar activity would get them shut down by the fraud department at e.g. a bank. See comments by dangrossman, etc.

Re: Good riddance, PayPal

#20

Post by yummyfajitas »

andr wrote: post #10

Does anyone have insider knowledge of why PayPal has been causing merchants so much trouble? It sure looks bad on the outside, but I'd be interested to hear their rationale.

I have no insider knowledge, but here is the obvious answer: fraud is an existential threat to their business.

Paypal's profit margin is a small percentage of the value of a transaction. The potential losses due to fraud can go as high as 100% of the value of the transaction. I.e. their losses can be 50-100x as big as their gains.

Further, the selling point of Paypal is they let anyone who wants to set up shop and use Paypal for money transfers. The tradeoff you make by using Paypal is much lower setup costs (relative to a merchant account) for much higher risk.

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