Until quite recently, they offered the only way of accepting credit cards without a written application and a substantial security deposit. In many countries, they're still the only realistic option.
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.
I run a small business in Canada, and a hundred times this. For a long time my options were: PayPal, or sign a contract with a bank to get a binder with some instructions to use a horrible API. There may have been some weird options like e-gold, but nothing I could pitch to a business user. PayPal was easy to set up, captured credit cards so I didn't need to think about PCI, and did a non-zero amount of work to block fraud. We've since migrated to start preferring Stripe over PayPal, but it was Paypal all the way for the first 5 years.
> They ignore all legislation. 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.
I used 2checkout.com for years and years for a small business in Canada. Switched to Beanstream.com years ago (lower fees, but doesn't accept amex in usd).
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.
> but they reserve the right to freeze an account pending investigation
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
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 seems like buyers prefer protection a lot more than sellers do.
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.
PayPal could at least offer the option for purchases funded entirely from existing funds in the buyer's account. That they don't suggests that protecting buyers is more valuable to them than protecting sellers.
Debit transactions have the same sort of protections.
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.
Or that the barrier to entry for competitors is too high. It's pretty difficult to replicate the synergy PayPal had with eBay, which drove the number of Paypal customers up so high, so quickly.
Like, they never blocked your account for logging in from abroad?
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.
PayPal is more relevant than ever. As simple as it seems, sending legitimate money from point A to point B could not possibly be any easier than with this service.
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.
The poster above wasn't saying that the NEED for Paypal was no longer relevant, he/she was saying "here's a company with a lot of unhappy customers - why hasn't another company come along that solves the same problem with fewer complaints?"
(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.
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.
You are describing the most convoluted way of using Bitcoin. You just don't do USD->USD transfers with BTC. Instead you hold an amount of BTC and you pay with BTC for services that accept BTC. Conversion USD->BTC and BTC->USD is hard simply because banking system is trying to make it hard.
> 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?
> 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?
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'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.
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.
"Situation is real, but the problem is made up". You did made up that point, after all.
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.
For 99% of the population (which matters a great deal), Paypal is far easier, faster, and safer than bitcoin (which isn't even a single entity to deal with but rather computer science theory put into a proof of concept).
LOL. The other comments stand for themselves, but I'll add that not a single person operating in my industry uses bitcoin. This is delusional thinking once you get outside of the hardcore tech sector.
The businesses I deal with enjoy US dollars and simple tax situations. Not the opposite.
Honestly, when I'm dealing with a trusted merchant, Bitcoin is less painful than a credit card, especially if there's nothing to ship (e.g. with Namecheap and Prgmr). I have Mycelium on my phone - I scan the QR code, punch in my pin, and order completes a few seconds later.
And with an absolutely useless website. They have two UIs, like windows 10, an old one and a new one with the website randomly switching between the two and many options or data that are only visible in one but not the other.
I explained this in another post about paypal. Basically, paypal has a monopoly on international transactions for Americans. I ended up switching to Bitcoin, but not everyone is able to do that.
"It's an absolute egregious shame that PayPal, after more than a decade of problematic behavior, is still relevant."
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.
