I have no sympathy for Paypal -- every time I've dealt with them it's been like talking to a robot -- but in all fairness they do something that's really hard. Can you imagine the number of people who are either trying to rip Paypal off or are using Paypal to rip other people off? I'm left thinking the only reason Paypal works is because the founders were too stupid to realize what they were getting into. (Although if you've never read it, they have a great startup story)
The thing that's especially onerous here is the fact that they keep screwing with the same customer the same way over and over again. I agree with the author of the post -- that's just too much crap for too little return.
The current incarnation of PayPal is the result of a March 2000 merger between Confinity and X.com. Confinity was initially as a Palm Pilot payments and cryptography company. X.com was founded as an Internet financial services company. Both Confinity and X.com launched their websites in late 1999. Both companies were located on University Avenue in Palo Alto. Confinity's website was initially focused on reconciling beamed payments from Palm Pilots with email payments as a feature and X.com's website initially featured financial services with email payments as a feature.
I somehow doubt the likes of Thiel, Levchin and the other early Paypal folks were 'stupid'. But then, they really didn't have to run it for a long period of time at eBay so maybe one has to question what eBay was thinking.
The thing that's especially onerous here is the fact that they keep screwing with the same customer the same way over and over again. I agree with the author of the post -- that's just too much crap for too little return.