Good riddance, PayPal • Hacker News Board

Re: Good riddance, PayPal

#101

Post by Karunamon » Thu, Sep 06, 2012, 4:02 PM UTC

elpadi wrote: post #91

kevinconroy wrote: post #84

Earlier quoted context omitted.

Excellent points. As developers, we're used to just plugging in an API and have it "just work". Money transfer systems are different. They draw a lot of dark, evil forces that try not just to hack their systems, but to game and abuse it through normal operations. It's unfortunate that legitimate businesses get caught in the crossfire sometimes, but we rarely hear about how many credit card thieves PayPal's system rig…

"but we rarely hear about how many credit card thieves PayPal's system rightful stops. (Answer: It's a lot.)". How do you know it is a lot if we rarely hear about it?

One can extrapolate based on two things. Firstly the would-be competitors who have been utterly murdered by various kinds of fraud. Secondly the assumption that the amount of fraud in the world isn't going down.

There are people (individuals, and entire enterprises) dedicated to financial shenanigans of the black hat variety. If Paypal didn't have a robust risk prevention system, they'd have been annihilated a long time ago.

Re: Good riddance, PayPal

#102

Post by wpietri » Thu, Sep 06, 2012, 4:03 PM UTC

reitzensteinm wrote: post #35

The customer service angle sucks, no question, and I'm worried about getting into similar trouble (I sell downloadable games via PayPal). But I actually think holding an issues worth of revenue in reserve is a decent enough compromise. If the company goes bankrupt before an issue ships, for whatever reason, PayPal themselves are going to be on the hook for refunding every single payment, as well as chargeback fees th…

I believe it's a classic business mistake to think that you must turn a profit on every single customer. It's much better to think like a casino: as long as you're in the black for a service and segment of customers, it's a win.

That's especially true for PayPal now. Before merchants didn't have much choice. If PayPal continues to be seen as difficult and risky, the better-qualified merchants will be the first to shift to other services. That will leave PayPal with a much more risky customer base than they have now.

Re: Good riddance, PayPal

#103

Post by speleding » Thu, Sep 06, 2012, 4:07 PM UTC

happywolf wrote: post #41

One of the reasons why PayPal so paranoid is to prevent money laundering. In fact this could be _the_ factor because any mis-step would land PP itself in big trouble and could be fined a lot of money. My guess is PP would rather err on the side of its own safety. Another cause that it will freeze an account is when it suspects the account is used for illegal activities (e.g. selling fake goods). Please note I am in n…

Money launderers typically like to avoid leaving a trial and I would think PayPal keeps a very accurate trial of where its money flows. And since they are regulated as a bank (at least in the EU) I suspect PayPal will simply need to hand over that information to the authorities when asked.

Re: Good riddance, PayPal

#104

Post by WiseWeasel » Thu, Sep 06, 2012, 4:08 PM UTC

kintamanimatt wrote: post #75

gadders wrote: post #61

Earlier quoted context omitted.

"Skrilla" is slang for money: www.urbandictionary.com/define.php?term=skrilla See also the lyrics for "Cash in My Pocket" by Wiley: > All I really want is money in my pocket > Cash in my hand, oh, skrilla in my wallet > All I really want is money in my pocket > Cash in my hand and skrilla in my wallet, yeah http://www.metrolyrics.com/cash-in-my-pocket-lyrics-wiley.ht... NB: This doesn't stop it still being an awful n…

That's absolutely hilarious! They should have just stuck with their original brand, which wasn't all that terrible either!

Can't we agree that both names are equally horrible?

Re: Good riddance, PayPal

#105

Post by scottshea » Thu, Sep 06, 2012, 4:10 PM UTC

reitzensteinm wrote: post #68

scottshea wrote: post #58

Earlier quoted context omitted.

> PayPal's freeze on that money means their end is covered, and you can still bring the sales to a bank and get a line of credit to cover the printing costs So your suggested way around this is to incur credit charges & pay for the credit risk baked into the interest rate all so that Paypal is covered?

Frankly, yes. The merchant is, if I understand the post correctly, taking orders, using the money to print a run, then shipping them. The risk is caused by the merchant's business model. It may not be high, but it certainly exists. Either the merchant, PayPal or consumers themselves must pay for it. Who would you pick?

And yet you want him to turn to a bank to help secure Paypal's position so that would indicate that the costs of the risk are not wrapped into Paypal's processes (i.e. the transactions between the two parties).

For Credit Risk banks and other financial institutions use interest rates.

For Operational Risk they use fees. The freezing of accounts comes only when the activity of the merchant approaches a threshold not covered by the fees not prior.

As a base coverage all banks are required to keep a reserve just in case their losses start to mount and then they kick in the extreme measures. Paypal has no such standard to meet in the US (not sure what being a Bank in EU/UK would do).

Truly the Merchant should cover the risk directly with Paypal and the fee structure if they are legitimate. But that is not your solution... a third party must enter the equation to cover where Paypal is deficient in their risk assessment.

Re: Good riddance, PayPal

#106

Post by ed209 » Thu, Sep 06, 2012, 4:13 PM UTC

rthomas6 wrote: post #72

reitzensteinm wrote: post #68

Earlier quoted context omitted.

Frankly, yes. The merchant is, if I understand the post correctly, taking orders, using the money to print a run, then shipping them. The risk is caused by the merchant's business model. It may not be high, but it certainly exists. Either the merchant, PayPal or consumers themselves must pay for it. Who would you pick?

The merchant. It's the merchant's business. The merchant should be the one taking the risk.

I'd be happy with that. Frankly, PayPal's perception of risk is clearly killing businesses. They are going so far into being risk averse that it's killing business. I would rather shoulder the risk that suffer PayPal's "protections". They're like the TSA of online payments.

Re: Good riddance, PayPal

#107

Post by bradddd » Thu, Sep 06, 2012, 4:14 PM UTC

DanBC wrote: post #47

bradddd wrote: post #23

Earlier quoted context omitted.

There are countless tales of eBay parties having their funds frozen. I've personally had around a dozen influxes of a couple hundred dollars at a time be frozen for 4-6 weeks before I had access to their full balances. Additionally, many have issues with the fees. Going back to eBay, you get hit with fees for both services, and I think many just see it as being too much given other emerging comparable services.

> There are countless tales of eBay parties having their funds frozen. "I used ebay, something went wrong, here's my post" vs "I used ebay, everything went smoothly, here's my post". Obviously you're going to have many more posts where things go wrong, but that doesn't tell you anything about the total number of transactions, nor the successful transactions.

Of course. You'd be hard pressed to find a scenario on the web where selection bias doesn't come into play. Regardless, there's a level of distinction between "I had a bad experience" and "Paypal has inexplicably frozen my funds."

I agree that there are numerous positive experiences out there. I would imagine PayPal would struggle if there wasn't a large user base that was satisfied. The point here is that some people are starting to reassess and or question the net-benefit offered by PayPal at the cost of these inconveniences.

Re: Good riddance, PayPal

#108

Post by redm » Thu, Sep 06, 2012, 4:17 PM UTC

"PayPal have all the power of a bank and yet none of the responsibility."

That is precisely the problem, PayPal is on the hook for any credit card charges for 6 months so they are much more willing to protect themselves then to try to understand a specific situation. They are a black box when it comes to these types of issues, you feed lots of information in but you get almost nothing in return.

Banks usually transfer funds nightly and they don’t hold subscriber information hostage.

It would be one thing if PayPal was amazing to use but they are just one technical or customer service blunder after another.

Re: Good riddance, PayPal

#109

Post by brazzy » Thu, Sep 06, 2012, 4:22 PM UTC

Karunamon wrote: post #101

elpadi wrote: post #91

Earlier quoted context omitted.

"but we rarely hear about how many credit card thieves PayPal's system rightful stops. (Answer: It's a lot.)". How do you know it is a lot if we rarely hear about it?

One can extrapolate based on two things. Firstly the would-be competitors who have been utterly murdered by various kinds of fraud. Secondly the assumption that the amount of fraud in the world isn't going down. There are people (individuals, and entire enterprises) dedicated to financial shenanigans of the black hat variety. If Paypal didn't have a robust risk prevention system, they'd have been annihilated a long t…

Can you name some of those competitors destroyed by fraud? I'd be interested to learn more about those cases.

Re: Good riddance, PayPal

#110

Post by niggler » Thu, Sep 06, 2012, 4:27 PM UTC

Splines wrote: post #93

crag wrote: post #53

Earlier quoted context omitted.

I use Paypal for one reason (as the consumer); it adds an extra layer of protection for me. I don't want to give my CC details to every site I buy from. And then have to check my CC statement everyday to make sure nothing was hacked along the way. For a consumer, Paypal makes it very easy to manage payments, receipts, and any other issues. By the way, never ever use a debt card online. You're handing over access to y…

> By the way, never ever use a debt card online. You're handing over access to your bank account. Are you sure about that? Visa will refund you money if your card is lost or stolen: http://usa.visa.com/personal/cards/debit/visa_check_cards_fa... My personal bank also has similar verbiage for my debit card. They also mention that internet purchases are considered non-PIN purchases and are offered the same protection.…

With the bank account, they may not reverse fees or other issues that arise as a result. For example, I had a fraudulent charge on a debit card. They reversed it, which is fine, but i was still hit with an overdraft because of a scheduled ACH payment which, at that time, dragged me into negative balance. So there are differences between debit and credit cards.