I ask this in the most constructive way possible... is there a set of use-cases that PayPal is still the best for? Is it a lack of awareness of alternatives? International availability? Something else?
Paypal wasn't really designed to handle one off personal payments, it was designed to let small (and large) businesses accept payments, internationally and fraud free. This is ridiculously difficult (how many of you have ever written software that integrates with a bank? ugh.) PayPal does this exceptionally well and because of that many huge businesses are built on its back.
The reality is, in most of the situations that people complain about freezing their money, without paypal their entire project would've been a no-go anyway.
I do feel for people who legitimately have their accounts wrongly frozen (I am one of them, though mine was unfrozen after a few days), but you have to understand how small a percentage of people that is, and that you can't have a system without failure. Again, paypal's failure rate, when you consider what they actually do, is astoundingly low.
Edit: Just for absolute clarity - I work for Etsy and have zero affiliation with the blog from the OP, and it has zero affiliation with Etsy. Also these are my opinions not my employers etc.
So yes, they switched on that, but it's really not hard to see why. I wouldn't want to use it for personal transactions. (In Germany, we mostly use bank wire transfers for that.)
This is the heart of the issue. Based on anecdotal evidence, there is little to no transparency in the freezing/unfreezing of accounts. This makes PayPal a cash flow risk to any business that relies on it for funding. I wouldn't be comfortable if my employees' pay depended on cash flow coming in from PayPal unless I had other dependable sources of emergency cash flow that could be tapped for indefinite periods of time.
It's good that your account was unfrozen after a few days, but what if you needed the money to pay your employees, so that they could pay their rents? Getting lucky with a short freeze is not a business strategy.
Don't take that for granted. PayPal has 232 million registered accounts, and many more unregistered buyers. Even if 99.99% of PayPal account holders were completely satisfied and never had any problem, that'd 0.01% would still be 23200 pissed off people.
Is it right to wonder "does anyone still use PayPal" if 99.99% of PayPal users have no problem using the service?
So, yeah: if they don't want to deal with their customers, we can fix that by encouraging a situation in which they have no customers to deal with.
BrainTree is awesome too.
If you're doing subscriptions, http://spreedly.com/ is good.
And Stripe looks cool but I've never used it. (https://stripe.com/)
You really need a true merchant account plus gateway.
On the first, I have generally recommended TrustCommerce both due to their emphasis on security (having reviewed their Perl and PHP API classes directly) and the richness of services they provide. They do cost more because Paypal gets a tremendous volume discount, but it's an option. For online payments also you have additional PCI-DSS worries that are burdensome for small businesses.
The second option includes solutions like Amazon Payments. I currently use Amazon Payments because I process 4-5 transactions per year. At that volume it isn't worth maintaining my own merchant account and certainly is not worth worrying about PCI compliance......
Universally, on all of these sites, customers choose to pay with PayPal more often than credit card. For the most part, my payment pages are a secure credit card form with a "or Pay with PayPal" button to the right of the form. More people choose to click through to PayPal than to just put their card in to the form already on screen.
The preference for PayPal is larger outside the US among my customers.
The Internet needs a good Paypal competitor.