because taking money as everyone else has mentioned is covered in fraud, which is why Paypal "suck" and why there are no competitors. It's a miracle Paypal exist and for all their flaws, the service they do offer (international, open to almost everyone) is great. Most people don't seem to realise the people who do have problems are a tiny minority of all customers.

If someone screws over a Paypal customer, it's Paypal who have to swallow the loss. Can't really criticise them for the way they act when it's their bottom line that gets affected.

No, I've gotten burned twice by a Paypal transaction, but in both cases while I won the battle (dispute) I lost the war because both account holders took out the money from their accounts.

In one case I was able to find the guys new Paypal account, but they refused to go after him.

Agree that Paypal has a lot of challenges to run their business, but I disagree that the bulk of risk is being taken by them...

I think, as patio11 states above, it's because it's very hard to do without losing money to fraud hand over fist.

It's also why Apple/iTunes is so important and why the mobile carriers should be rubbing their hands with glee (if they had any sense).

The problem is that there is not plenty of money in smaller countries, which are generally just as hard to set up as large countries. So any new service will have limited scope.