I don't think they need regulation. I think they need to carry on like they are for a few more years so I can watch them be eaten alive by crypto currencies and other fintech innovations.
>a few more years so I can watch them be eaten alive by crypto currencies and
Yeah, don't hold your breath. Nobody (with the statistical significance meaning of "nobody") really cares about crypto currencies. At best, crypto-geeks aside, they attracted a share of "gold digger" personalities. That's whether the same media that cover the grumpy cat have covered them, or whether some random company uses a payment processor that accepts payments in Bitcoin.
I think the problem is that PayPal almost have a monopoly on e-commercial market, and because of the stickiness of users, it's hard to break the monopoly.
I do not believe they have a monoply any more. a few years ago they where much more prolifict, I paid for ALOT of things via paypal. in the last 5 years I have made 0 transactions on paypal.
With Amazon, Stripe, and others merchant solutions, as well as Apple and Google geting into the game soon for webpayments in addition to app paymets I do not believe the reliance on paypal as a quick way to process credit cards for business is as high as it was, further the reluctance for consumers to enter their credit card data never really materialized.
Currently I think a business that only has PayPal as a payment option is harming their business, while you might keep it around for those few users that still only want to use paypal if I see an option to use anything other than paypal I will take it.
I think Paypal has very strong brand recognition with the average consumer for such an esoteric product (online payment processor as opposed to say candy bar). Anecdotally many people enjoy how easy it is to pay with Paypal and that they have a perceived extra layer of protection. This is doubly true for this case since credit cards are historically not as wide spread in Germany as elsewhere (and thus Paypal linked to your bank account becomes a pretty attractive option). Most "Paypal is bad" stories I'm reading are at the expense of merchants not buyers. As long as they control buyer mindshare it's hard for merchants to opt out imo.
I wonder if there's studies or analysis on this (expected revenue loss with no Paypal option). Were I to start an online shop I'd prefer something like Stripe but would be pretty worried about missing out on a lot of revenue.
Agreed; with both of you. Maybe it won't be crypto-currencies, but Paypal Has To Go®. Let them screw up two or three more times. They're antiquated and operate like a typical barely-legal, gray-area, fee-riddled credit institution.
I wonder why Douglas Crockford, a brilliant man, still works there (other than obviously well compensated time).
Big banks screw up impressively, but not consistently. They can go broke and survive, they can commit massive fraud and survive, but they can't be utterly useless at the very act of banking and survive.
Paypal is rapidly approaching that point. It's name is almost synonymous with "we'll ban you without warning, and freeze your funds when we do". It's literally the first thing I expect when I see 'Paypal' in a headline.
Big banks survive partly due to FDIC insurance and similar - they're fairly unlikely to simply strip all the cash from depositors. Paypal, by contrast, has ruined everyone from Amazon sellers, to Kickstarter campaigns, to startups. At this point, I can't imagine starting a business that relied on Paypal without having another, more reliable way of handling payments.
Put it this way: I would trust Chase to handle my paychecks, even if they do make bad investments. If they started randomly freezing 2% of deposits, I would sure as hell not continue trusting them.
In my opinion, you are probably right, to a big extent at least. I could well picture PayPal becoming the "Microsoft" of payment services: big and loaded but slow and basically living off past glories. People are already moving away to better alternatives and PayPal is too heavy, corporative and managerial to react in time.
>Agreed; with both of you. Maybe it won't be crypto-currencies, but Paypal Has To Go®. Let them screw up two or three more times.
They've already screwed up and screwed people over publicly dozens of times. Paypal does have to go, but I don't think paypal will die until someone offers an equivalent service.
>They've already screwed up and screwed people over publicly dozens of times.
Dozens of times means absolutely nothing considering the billion that uses them.
Do you many how many thousands of times banks and insurance companies actually screw people -- and yet nobody bats an eye?
Besides the big assumption is that this is due to PayPals incompetence or malice, and not due to BS regulations (that anybody else will have to follow too).
They probably mean either big screw ups, or hundreds of thousands of little ones. Eg, trying to circumvent banking laws, allowing donations to the KKK while refusing to cater to wikileaks, seizing funds from well known legitimate businesses, UX anti patterns (eg fake endorsements from the site), Braintree not understanding why you'd want to use CSP to stop someone stealing credit card details, etc.
I don't want to victim blame, but if you work in tech, and still involve PayPal in your business in any way you shouldn't be surprised about the outcome. Use Stripe, use GoCardless. Paypal Has To Go®.
And I think that "shouldn't be surprised" is what ultimately threatens to kill Paypal.
I wouldn't ever use Paypal as a primary or exclusive channel for a startup, and I'm not alone. It may not become publicly hated, but if companies end up too scared to give it traffic, it will still die.
Younger kids might not remember how incredibly painful it was to do credit card transactions in the 1990s. It wasn't just filling out a form or getting a bank to agree to it. Being told "monitor what your users upload in exchange for 3%" would have been something to kill for.
Exactly - for a great deal many people, PayPal is preferable to paying directly to the seller. Until another branded payment provider has that level of mindshare across the general populace, and seen as being secure and trustworthy from twentysomethings to grandparents, then they wont be beaten.
But will companies continue to run the risk of letting Paypal ban their accounts (and often, freeze their funds in the process)?
I can't imagine a consumer revolt, but at a certain point "makes your users feel secure" is outweighed by "makes you terrified you'll lose your money". I suspect that something like Stripe or Square will eventually sell companies on a "we won't screw you over" narrative and start to compete directly.
Probably. At this stage, the integration with PayPal is as much for the user's benefit as it is the company's (Stripe has an easier integration path, and is elegant from a back end perspective), and it isn't the customers concern that a supplier might have their account frozen. We're looking at this from a company/developer perspective, but that's not the driver for it any more.
Most large companies work hard to keep customers happy because the competition is down the street. PayPal benefits from barriers to entry and a two sided market to make this less of an option for merchants.
> so I can watch them be eaten alive by crypto currencies and other fintech innovations
If crypto currencies become an even remotely threatening actor in finance, I'm sure you'll witness how quickly governments (being in the pocket of Big Finance) will crack down on them (i.e. you won't have any legal CC to nonCC trading).
Right now, of course, CCs are more of a practical joke.
