PayPal CEO writes personal response
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Lets all admit change is slow and that paypal is still one of the more trusted payment solutions accepted globally. It would be nice to be able to use them in the future with some continued reliability.
While its nice that the CEO has personally responded this actually shows a far greater dysfunction. Why should it take escalating all the way up to the CEO level to get someone at PayPal to listen and advocate for the customers position?
The contrast with startups is misleading. PayPal has been in business for a long time and is a billion dollar company. They have the resources to stop making stupid mistakes, but still persist in their bad behavior. They can get away with this because they've cornered a large part of the online payments marketplace.
Sure, a startup is going to make mistakes. And they're expected to. That's all a startup is really - a machine that generates mistakes in an attempt to find (or build) a profitable market.
I give PayPal credit for this response. Rather than being cynical, I'm happier giving credit to someone who wants to make things better.
Mr. Marcus - some of us appreciate your efforts here.
This is a fire-fighting attempt from the CEO of a company that snubbed the people they should live off of, prompted by a bigger than average shitstorm created by their persistent crappy handling of accounts.
Think of it this way: suppose Mercedes went around, burning the cars it sells to their customers - much to their chagrin - and one of the customers creates a big enough fuss for the CEO to come and personally give him a new car. Is that an acceptable handling of the situation in your eyes?
Many CEOs would hand this off to their customer experience personnel (if they have some still) or maybe marketing department.
This was not a manager's or director's reply though. The wording indicates someone (relatively new to this president's post) who appears to see that change is necessary. He understand that his offer may not be accepted (he get's it) and still offers a direct link to himself.
I don't read this as a PR ploy or gimmick.
If a CEO offered someone a new car PLUS their ear, I'd be watching for changes. PayPal didn't burn everyone's car. Enough damage was caused to affect the brand though. If I was one of the affected, I'd be watching for more action.
I feel that the response was appropriate. There is something in the wording that gives me hope. Maybe I'm just being naive.
I'll watch to see how things turn out though.
PayPal has a notoriously bad customer service reputation. It's going to take more than a typical CEO apology letter to really fix the issues that are embedded within how PayPal operates. The fact that a CEO has to issue such a letter indicates there are problems that probably aren't going to be easy to fix.
Either he discovered the issue on his own or someone else within PayPal escalated it to his attention. Either is a good sign. The former path indicates a CEO who is actively listening to users and is deliberately making time to gather user feedback outside of normal channels - a very good thing for any CEO worth their salt. The latter indicates that someone else within PayPal or closely tied to PayPal had the good sense to escalate it to the CEO's eyes - that person deserves a promotion (he/she probably has some relavent skills that PayPal really needs at the moment).
I just don't see this as a typical CEO apology. It's personal and the wording actually suggests something more than a typical CEO response - I've seen a few.
It's like a bully saying he's sorry only when your bigger brother shows up to defend you.
I don't have the same confidence in this type of change happening inside PayPal and I'm not sure why. Maybe its because, as a financial institution, I view it as a very "corporate" entity that resists change. Whereas Yahoo! is, in my mind, has a "hacker" feel that recognizes the problems and really wants to make things better. I guess I have more faith in Marisa and the kind of company that I know Yahoo! can become, whereas I've already written off PayPal as a necessary evil that can/will be replaced as soon as possible.
For my personal blocked account, it means exactly nothing.
It's going to take some radical change to alter current perceptions of PayPal, but it may be possible.
The true fix, the actuall turnaround, is when the ability to actually fix problems like this is systemically extended deep into the space previously occupied by the employees who couldn't fix them before.
This is a pure PR maneuver. The proof is in the pudding.
The only question left is: to trust or not to trust?
Let's see if PP makes any official announcements on policy to combat this.
RTFE. This entire thread is basically regurgitating what was already said in the email. It already says they hope to win back trust, but with action, not words. To trust or not to trust?
Email makes that very clear: wait and see what they do.
Of course, they should have developed mechanisms to take customer feedback seriously before.
And they should have fixed this long ago.
But there's nothing wrong with learning from your mistakes so as not to repeat them.
The only leeway I give them is openness to the future, but from the past to the present, they are a seriously bad company for entrepreneurs. A business owner literally cannot know whether they'll be caught up in PayPal's various harmful practices, and this message from an executive is the smallest Dixie cup of water given to a one of a hospital full of burn victims.
I agree that this looks like a PR stunt, but it also shows some potential changes underfoot at Paypal.
Here's my read of the situation: Paypal has been known for being beauracratic ever since the eBay acquisition, when all the smart people left and the bozos and middle managers remained. You know the type of place and the type of people it attracts: it's the smooth-talking-but-not-that-bright individuals who do well, and any smart employees who perceive the real problems the company is in find themselves a part of an outcast fringe.
Don't tell us we have bad customer service issues; expressing that kind of negative attitude is not going to impress senior management, what with bonus season coming up. Stripe and Square are just dipshit startups that no real business will ever use. La-la-la I can't hear you.
It seems someone at eBay finally realised PayPal was going to be "disrupted" if it didn't get a leader with their shit together. This new guy seems competent, but steering a big lumbering ship like PayPal away from its death course takes serious political/organisation-hacking skills, no matter how big the icebergs loom.
They remain an interesting choice for anyone starting up a business that takes money online -- I have a business that I've partially migrated to Stripe (and I'll finish that up soon), but for about 9 YEARS before Stripe came along, every year I'd evaluate the available options for accepting payments, and come back to PayPal each time.
They certainly have trust and customer service issues -- and I've never allowed more than a few thousand to accumulate in the account for that reason -- but I have to admit I've only had technical problems with maybe 2-3 payments over those 9 years, never had my account locked, and generally just benefited from the flexibility and good rates.
My impression is that overall, they still have a middling to good reputation. Especially if they can fix the glaring problems remaining, I don't think they'll have any trouble staying strong for a long time.
Extremely well said and sadly often true.
Change a few words and it can also apply to a "scene."
Unfortunately there aren't a whole lot of details in the mail that one can call the CEO out for if it doesn't happen but its a good start and in my opinion more than a PR stunt.
Respectfully disagree. CEOs of multi-billion dollar publicly traded companies do not routinely reach out to disgruntled customers, no matter how public the PR disasters. Twitter has been very effectively leveraged in the past with various underperforming companies, however IIRC all of those cases were delegated to customer service / marketing personnel.
While you are correct that this intervention bore many of the hallmarks of a PR effort, the scope is unusual. While I am happy to be proven wrong, I would certainly be very surprised if anyone could dig up multiple examples of similar behavior on the part of a President/CEO or even any C-suite executive in a company of this size.
TL;DR: Personally looking after an account and handing out a cell phone number is not business as usual. There may be an element of PR, but it is quite proactive by most standards of measure.
CEOs, like anyone, can lose interest in anything, due to lack of commitment or competing priorities. And no CEO lasts forever; the next CEO might not care as much as PayPal in the large currently doesn't care.
And an incoming CEO is not superman, it takes cooperation from below.
Good luck, hope it works out for them.
If he doesn't fix the problem, in a few months he's going to be inundated with blog posts saying "David Marcus promised this would be fixed and it isn't".
So he's set himself a very public (and difficult) challenge, and I respect that.
My hat goes off to Marcus, and I'm a bit surprised at the pessimism from HN. Tilt at windmills much?
I had the honor of actually having a direct email exchange with Steve Jobs in the context of difficulties doing business with Apple. In a last ditch effort to solve the issues I decided to email Steve. I had never done that before. While I was convinced that it was pointless, I did it anyway. It was three in the morning here in California. I was programming and shot off a two line email not saying much more that I needed help resolving a business issue with Apple.
Fifteen minutes later I get this:
What's the problem?
-Steve
I replied anyway.
The next day I got a phone call from a high-level VP who had been asked by Steve to personally look into the issues. This led to many meetings and even a couple of trips up to Cupertino to meet them all and discuss further. The problem was addressed to everyone's satisfaction.
Having the CEO of a large company take the time to take personal ownership of an issue is special.
I want this to be true. I want PayPal to believe that this behavior is harmful to their business and to push (at ALL levels of the company) to change how they treat their customers. But I won't give them the benefit of the doubt based on one message from the CEO. They burned their second chances long ago, and it's much harder to regain my trust after losing it. I hope that they do.
This is all a bunch of baloney. If PayPal was really serious about fixing all the pain and misery they caused, they would create a direct line of communication where those on the other end were empowered to resolve all problems ... instead of giving a curt "send us a letter".
Until PayPal starts working with their customers and stops treating them like criminals, I'll take my business elsewhere.
Do it in one go and you're talking a department of tens or hundreds of people, most of them newly hired. Turn them loose without careful thought and at the very least you create massive chaos in your organization. But you also probably create substantial losses as fraudsters use the chaos to take a lot of money.
I think the only way you can get to the customer service experience you want is by starting with one customer's problems, solving them, and then changing the organization a bit so it's less dumb. Then you rinse and repeat for years.
It's an organization of thousands of people across the globe, with a zillion lines of code and, a ton of procedures and habits, and a lot of institutional inertia. The way to solve it is by starting now in a manageable way, and that's what he claims he's doing.
I've seen it work. Hell, I've helped it work. This is a good sign.
How much more direct communication do you want?
We all want your mobile number. I have a 1000 angry friends who want to personally talk to you.
Thanks
His email sounded sincere, and he's new to the job. I'd be inclined to give him the benefit of the doubt. He must know that the technorati hating his company is bad for business.
I would really like them to make a policy change that any money collected in interest off frozen accounts is given to the account holder after the freeze.
I pretty much agree with him. There is a lot of fresh blood trickling in from the top over the past year or so. Time will tell if the new leadership can empower the marginalized, scattered, and demoralized minority of good engineers at Paypal.
PayPal are in big trouble. It's going to take more than platitudes to get them out of it!
1. http://christianowens.com/post/15771850658/my-recent-experie...
2. http://www.pcworld.com/article/101525/consumer_alert_paypals...
3. http://www.kernelmag.com/comment/column/2978/paypal-still-su...
If true, they are doomed! New leadership is the Hail Mary toss, not the way you solve problems.
The new guy is the desperation move, not the way an organization should solve problems on a regular basis.
Put yourself in the position of somebody who is trying to commit massive fraud. E.g., by purporting to sell a bunch of stuff on-line. Every bit of information you have about how PayPal combats fraud is helpful. Every time PayPal gives somebody a reason, it helps fraudsters avoid that particular wall or trap, letting them probe the defenses elsewhere.
It's a hard problem. PayPal solved it the wrong way, but they'll never get to full transparency.
Couldn't you say make the same argument of proprietary vs open source software?
Also, they've intentionally chosen a domain where full security isn't possible, mostly due to circumstances outside their control. Remember, they captured a huge new market mainly through the sophistication of their anti-fraud systems. So security through obscurity has to remain a major tool for them.
Basically if you work in fraud detection (or broadly any kind of crime detection) you keep your techniques secret because otherwise you're helping the criminals avoid you.
Look at the source code for Reddit or Hacker News, notice how in the publicly released codebases they've both chosen specifically not to publish the code to do with vote-rigging detection.
There's a strong argument for secrecy.
Then, you need to understand how open PayPal is to fraud. I can easily commit major crimes using PayPal, and security has nothing to do with it.
This is the challenge they face. If you think it's an easy problem to solve, ask yourself: why is there no one else out there doing this same thing? Why are all the other supposed opponents limited in such drastic ways that PayPal is not?
I'm not suggesting they are perfect, but your trite remark is meaningless and ignorant of the realities of the system.
Also don't want to help competing services.
Another data point - spammers used to check their work against spam assassin, fine tuning them.
Another data point - leaked password databases are a source of heuristics for generating word lists.
I've been reading similar complaints to that for years. Some of which were far worse in my view (i.e. taking money out of banks to repay people who weren't even seeking a refund because PayPal changed its mind about someone's product or service).
Why does PayPal suddenly care? Is it because there is viable competition now?
Seems like about the right amount of time for him to start really kicking things into high gear imo.
Check your ignorance and entitlement at the door, please.
http://www.apra.gov.au/adi/Documents/cfdocs/PayPal-auth-and-...
They are classed as an ADI, which means banking rules applies to them.
Apparently he was ok with that, and I'm sure he's being well compensated for it.
PayPal has built up a lot of ill will, and no, it doesn't just go away with a promise to change. It is in fact going to take time.
Let's keep in mind that this offense just happened. It's not the distant past.
This is a non-solution, which is almost worse than doing nothing at all, because it's active disingenuity.
You can't win by solving just one person's problems. But you also can't win unless you start by solving one person's problems. And then fix the system, so that the kind of problem is less likely to recur.
This, IMHO, is exactly the right way to do it. As contrasted with the wrong way, which is for employees to sit in their comfy offices and avoid all direct contact with customers, making up bureaucratic solutions to imagined problems.
David Marcus was CEO of Zong, a small mobile payment startup who got bought by PayPal last year. When buying the company, the CEO of eBay Inc. asked him to change quiet a few things in the company culture. This email is one of the first step to improve customer service. Will he succeed I don't know, but you gotta give him the credit of trying.
I hope Paypal can get it together, but I live in fear of getting hosed by them without any recourse.
I guess its never too late to stop sucking though.
And bitcoin. No matter how PayPal tries to put the kibosh on selling PayPal for bitcoin, people will still find a way around it.
I no longer use PayPal after their first and only abuse of my account. They had one chance and I found better solutions. That the CEO is sending out emails to high PR value customers is a very telling move.
While I applaud the new CEO wants to make amends, for some like my friend who relied on Paypal to make a living by processing his business payments it's a little too late. Although Paypal is still the industry leader (because they have a stranglehold on online payments) the new CEO knows that offerings like Stripe and whatnot are making Paypal less and less relevant each and every day.
I would love to see Paypal change, the first thing they need to do is fire all of their customer service staff and train new staff with a new set of guidelines, implement a clean-cut way of contacting Paypal if something goes wrong and clean their act up.
He said that he understands and told me to send him an email and we will take care of it. No email was sent yet as i'm afraid i'll be targeted in the future. I can't put my legitimate digital business at that risk - there are tonnage upon tonnage of forum threads over the web of people's business going under because of pp freezes only because they contacted paypal it's heart breaking and too much of a red flag to me.
The only thing i can say about David is that he looks and sounds like a genuine guy who replied and started a discussion with the community and that as we all know goes a long way. So maybe his intentions are good but will paypal have zappos's culture regarding merchants all of a sudden? i doubt it and you all doubt it too because what matters is implementation ie real life.
Fair play to the new CEO, he has won back one notch of respect and hopefully averted the slow motion train wreck that had probably already started at Paypal.
They are seeing Stripe, Square, etc getting way more mindshare, and they are scared.
With all due respect PayPal, good riddance. You've sucked too hard for too long, and now we finally have alternatives.
What confuses me is that David acts as if these are new stories of accounts frozen, staggered access to money, and blocked recourse to customer chargebacks. This has been happening for years with hundreds of publicly written stories of bad will by PayPal.
It excludes visually-challenged people from this discussion, makes old people get out their glasses and squint, and makes cutting and pasting impossible.
Why are they not paying attention to their other day-to-day customers? What kind of business do you intend on building?
It's good that this executive (President, not the CEO as indicated in the title) is taking initiative to fix things at PayPal. But until things are fixed, PayPal is still a business risk.
True, but as you note in the second paragraph, this is still a major improvement. I stopped using Paypal a long time ago because of an utterly typical story: https://jseliger.wordpress.com/2011/12/09/december-2011-link... and have been encouraging other people not to use Paypal ever since.
It's almost impossible for Paypal to be worse than it is, and it might even get better.
It's unfortunate that your story has spread so far and so quickly. I now have to figure out how to resolve this AND try to figure out how anyone let it get this bad. Changing such entreched culture here is going to be hard.
I'm going to do my best of not letting Paypal become more of a cliche of how big businesses get their foundations kicked out from under them by smaller, scarappy startups.
P.S. Please,please, please don't google Stripe.
I just was sent my first Paypal survey that I can ever remember about what else I'm using or wanting to use
I've given up on PayPal for my meagre needs, but anyone with real money on the line should beat a path from them until their actions truly speak louder than their words. Speaking of words, I noticed a TOS update from them but haven't read it yet, so if they have taken positive steps then add grains of salt to this comment, to taste.
I've briefly worked for a payment processor - and I'm not overstating here - but this industry doesn't give 1/2 a st about your feelings of them, their customer service, or what you think of their CEOs. They only care about getting as much money as possible. Period.
Peteris, keep posting of your experience and let's see if the CEO follows through. If he doesn't he'll lose twice as much respect and twice as many customers. If he does, then know you got some very expensive customer service, my friend.
If I'd receive such an email, I'd give 'em a second chance.
I doubt the CEO will learn much he didn't already know by a "direct line" case study, but humbling himself in this way might give him the lever he needs to really move company culture.
PayPal can keep most of its anti-fraud effectiveness while improving customer service for those innocents who want to recover from misclassification. Either being more trusting, or spending more effort discerning who can be trusted, will cost them money short term. But if they don't do it, they'll lose some of their customers to competitors who will.
And there shouldn't be mockery for him fixing one account. Sure there are many to go, but before this account was in the same boat...so it's an improvement no matter how small. Whatever Andy said in his post really resonated to D. Marcus; now I hope it really is the catalyst for PayPal to improve.
edited shortened it up.
Either things get better at Paypal, or they don't. Yes, big lumbering companies can change for the better. Microsoft, IBM, and Apple come to mind. Yahoo may be on that road now too. But it takes time to see. The wheels of change move slowly.