Having recently talked with some people at Paypal, I would never want to deal with the regulatory challenges they have to deal with. The challenge is dealing with that and fraud. Square might be on to something with requiring credit checks, but then you're narrowing your market. Do you have some ideas for dealing with these considerable hurdles?
They chalk up more than $250 million in annual fraud losses as a cost of doing business - there's a network of fraud artists that have cut their teeth on the PayPal network.
Being the innovator, PayPal grew up with these fraudsters, building an in-house database of knowledge about how to handle them as they cropped up one by one.
If you're talking about building a PayPal competitor at this point, you're launching at a point when there isn't going to be as much investor interest in your startup combined with a mature fraud ecosystem prepared to shut it down.
I've been making a list of how PayPal and other companies are "regulated" by the states. eg. Transfer of money regulations.
I think credit checks are overrated, as far as fraud mitigation. The relative risk profile would need to be determined. That said, OpenCamp represents a relatively low risk to PayPal in real terms. They have the event booked with the Hotel, They have real organizer profiles.
