It's an absolute egregious shame that PayPal, after more than a decade of problematic behavior, is still relevant.
The "problematic behaviour" you describe is invariably related to the fraud prevention mechanisms required to offer their service. That's the deal - Paypal are incredibly liberal in opening accounts, but they reserve the right to freeze an account pending investigation if something looks sketchy.
Paypal still fills a very useful role. I've used their services to receive payments for over a decade without incident.
Stripe only launched in Canada late 2012: https://stripe.com/blog/stripe-in-canada So did braintree: https://www.braintreepayments.com/blog/braintree-in-europe-a...
And we're america's hat. Many countries are still bereft of options.
(disclosure: I'm now a stripe employee, opinions are my own)
paypal is only relevant because they invented the uber-way. They ignore all legislation. push away. and nobody makes them accountable for anything.
they are pretty much a bank for free
They're more regulated than all but a handful of international banks, and it's not at all free.
PayPal is a licensed money transmitter in all 50 states, the District of Columbia, the US Virgin Islands and Puerto Rico. Most of those states have bond requirements for MTAs, typically six figure deposits. They're subject to 52 different regulatory agencies in the US, in addition to Regulation E consumer protections and the USA Patriot Act federally. Their US<->international transfers are overseen by the U.S. Department of the Treasury’s Office of Foreign Assets Control like any bank. They're not an ordinary bank in the US only because many years ago a judge ruled that they don't qualify to be one by the nature of their business; they tried unsuccessfully to be licensed as one in order to get FDIC insurance on deposits.
They are a licensed bank in all of the EU, with a bank charter in Luxembourg, regulated by the Commission de Surveillance du Secteur Financier. In Australia, they're licensed by the Australian Securities and Investments Commission as a financial product and by the Australian Prudential Regulation Authority as a purchased payment facility provider, which is a type of authorized depository institution (i.e. bank). In most of southeast Asia, they operate under their subsidiary PayPal Pte. Ltd. which is a licensed stored value facility regulated by the Monetary Authority of Singapore. They operate in 203 markets in total, most of which have separate financial regulations and regulatory bodies PayPal has to comply with.
go see how many other licenses and laws you have to comply to open a proper bank with a branch in any of those states.
I'd never use or recommend paypal for any business. Their history of seizing funds, freezing accounts, and pulling money from bank accounts is atrocious.
In reality their processes for investigating are often a neverending nightmare that punish innocent people, or in this case are hampering one of our only hopes for reasonably secure mobile communications: http://neo900.org/news/paypal-trouble-delays-project
I am not sure who to blame: the PayPal management or the viscios copyright regime, where a company with the legal resources of PayPal is still afraid.
It’s the same with PayPal, really. They’re prioritizing the people buying stuff over the people selling stuff.
It seems like buyers prefer protection a lot more than sellers do. Or maybe sellers just don't have any power to decide, and have to go where the buyers are.
It's a consequence of the regulations on credit cards. The cardholder can reverse allegedly-fraudulent transactions. Paypal can't reasonably do something else while processing credit cards, so they don't.
It's quite stupid because you end up with customers who aren't even looking for credit, they're willing to prepay and are willing to trust the seller, they just want to transfer funds digitally. But they can't because the seller/card processor doesn't trust the buyer not to reverse the transaction and the regulations don't allow the buyer to abandon that right up front.
The main difference between debit and credit is that if you're the victim of fraud with a debit card, money has been taken from your bank account and you have to fight to get it back. The fight is usually not very hard, but it takes some time. If it hits at the wrong moment you may have trouble buying food or paying rent on time, even though you'll get the money back before too long.
My first account is still in zombie state because it can't be closed without sending them scans of some papers I couldn't care less about sending (and didn't have them abroad). There was no money there so I simply opened another one, but still an annoyance.
Their invoicing system is ridiculously simple, nearly everyone I'm working with keeps cash in there or connected to it (or very worst, a credit card attached), it hooks up easily with FreshBooks, contractors like it since PayPal handles the 1099-K themselves, and it just works.
I see no reason to change. I just don't keep an absurd amount of money in the account and I feel safe using it.
(At least, that was how I read it).
As a consumer client, the only problem I've had from Paypal is the difficulty of changing my name.
BUT, I've heard many, MANY vendors complain - funds frozen, paperwork problems, poor communication.
They are solving a hard problem, but I have to agree: after so long, it's a shame there isn't more competition in the area.
Hasn't been a problem for me, but I'm not doing e-commerce,which seems to cause the most trouble.
You obviously have never used Bitcoin.
One of the big problems with using bitcoin for something like this is you're not just sending money. Your converting to a different currency, sending money, and converting it back. It would be akin to me wanting to send money to my Dad by converting it to Euro first, sending it, and him converting it back to USD. Neither of us have any interest or use for money in Euro or bitcoin. We both have/need USD.
You also get the volatility of bitcoin. If I send $10 to my Dad in bitcoin, it might be $9 by the time he gets around to converting it to USD. Or $11. Bitcoin could plunge in value (for seemingly no reason that I can tell) and be worth $5. I have no way of knowing what the value of that will be for him when he gets it.
If I want to send my Dad $10 on PayPal, he gets $10. He gets it instantly in his PayPal account as $10. If he transfers it immediately to his bank, it'll be $10. If he transfers it next week, it'll still be $10. It's guaranteed in value.
Also, I don't know if this is still the case but dealing with bitcoin is a pain. If I want to buy bitcoin at Coinbase and I don't have a credit card linked to my account (until recently, you couldn't even use Mastercard), I have to wait a few days for my BTC to arrive, even though they are directly linked to my checking account. I have no idea what the value of my BTC will be when it finally arrives a few days later. I have to send it to my Dad, he has to sell it back to USD (at least at Coinbase, at a lesser rate than buying it). The value could change dramatically at any of those steps.
And if you want to add a card at Coinbase, yeah, that's fun. When I added my card, my bank immediately kicked the attempted authorization out for fraud reasons. 10 minutes later my bank called me about it and I approved it, but the Coinbase told me I couldn't try again for a week. So I had to wait another week before trying to add my Mastercard again.
Bitcoin has a lot of usability issues for non-tech people. And using it for a simple USD->USD money transfer is like using a jackhammer when you need a scalpel.
No need if you earn and spend it.
> You also get the volatility of bitcoin
Absolutely true in the short term, absolutely false in the long run. Bitcoin's volatility has statistically declined as its usage has increased.
> using it for a simple USD->USD money transfer is like using a jackhammer when you need a scalpel
Cannot argue there. The key is to stop using USD whenever possible.
> If I send $10 to my Dad in bitcoin
Have you tried to use BTC to do business with Amish? Or any other made-up situations where you force BTC on people who don't know how it works or have no business using it?
But that's primarily what I use PayPal for: sending money to family and friends. Paying for my share of dinner, or concert tickets in a group buy, that kind of thing. I will occasionally buy things using PayPal (usually eBay stuff), but mostly, it's simply a money transfer mechanism.
For that, PayPal is perfect and BTC is overkill. Parent said "You obviously have never used Bitcoin." I have. For this, it's a pain whereas PayPal is flawless ever time.
> Conversion USD->BTC and BTC->USD is hard simply because banking system is trying to make it hard.
But is it really that much harder than any other currency exchange? Off the top of my head, I don't even know how I would buy, sell or change Euro to USD without physically going to the bank.
> Have you tried to use BTC to do business with Amish? Or any other made-up situations where you force BTC on people who don't know how it works or have no business using it?
See, it's this type of attitude that makes people groan when talking to bitcoin advocates. You're calling a situation that I have personally encountered and provided a detailed accounting of to back up my assertion "made-up" and comparing me and my family to Amish?
Come down off your high horse, dude.
You've exposed your father to losses without explaining to him that BTC is in fact not USD and USD/BTC is a floating exchange rate. I don't see how this is problem of BTC and not your own personal screw up.
You are assuming that both of us were not aware of that. We both were and were interested in trying something new. But it is still a reality of using Bitcoin when the entire transaction is not in bitcoin.
Anyway, the larger point remains: there are some transaction that bitcoin is ill suited for and PayPal is great for. Sending money to people is one of the core features of PayPal that works like a breeze whereas buying and selling a different currency just to send money makes little sense.
Once again - if you are using other currency, being it BTC, CHF, EUR, RUB or CNY, you are exposing yourself and counterparty to exchange rate fluctuations. Difference is - with BTC you have some extra possibilities.
As for PayPal - yeah, it's a breeze until it's not. I.e. until they've blocked your account because reasons. With BTC I own my money. With PayPal, PayPal owns me.
The businesses I deal with enjoy US dollars and simple tax situations. Not the opposite.
Bitcoin isn't easier, at least not ATM.
Then again:
> sending legitimate money from point A to point B could not possibly be any easier than with this service
- is this patently false as long as I have issues sending monies to Pakistan using PayPal.
What alternatives could you offer? I really don't feel like entering my Visa details in some random website and Bitcoin is still a mess to acquire and use. Yes, PayPal has it's cons, but unless some other service arise that could offer comparable convenience (fast email & password checkout) and safety (no need to enter personal or financial information) I don't see how it can become irrelevant.