Something I'd be very interested to hear about is how WePay is going to handle fraud. Fraud and abuse prevention is a huge part of what PayPal does and I would guess the major reason behind their atrocious customer service and the issues with groups like the Flux foundation.
It seems like every other week on Reddit there is someone who says they have disease X or is raising money for disease X and would you please PayPal them some money. This is immediately followed by a bunch of people digging internet dirt on that person and declaring them a fraud, which is then immediately followed by another group of people telling the first group that the person is legit and that they made them cry.
I don't even know how you start to deal with that situation as a financial entity. Do you call the person up and ask them if they have cancer? Do they fax you medical records?
> Fraud and abuse prevention is a huge part of what PayPal
> does
Interview with Max Levchin in "Founders at Work" is a good read in this context. After long part about fraud and prevention of it:
Linvgston: So is PayPal in a sense a security company?
Levchin: I think a good way to describe PayPal is: a security company
pretending to be a financial services company.<…>
So the company's core expertise, by definition, has to be in this
ability to judge risk<…>.
Livingston: What did you do that your competitors couldn't?
Levchin: The really complicated part is figuring out the risk.
Agreed completely, I'd heard a separate interview with Max Levchin where I believe he quoted the amount of money that PayPal lost at around $150 million (IIRC). That was their "learning money" to figure out how to handle fraud.
Seeing as how Mr. Levchin has actually invested in WePay I'm assuming that they are have some strategy for fraud prevention.
It seems like every other week on Reddit there is someone who says they have disease X or is raising money for disease X and would you please PayPal them some money. This is immediately followed by a bunch of people digging internet dirt on that person and declaring them a fraud, which is then immediately followed by another group of people telling the first group that the person is legit and that they made them cry.
I don't even know how you start to deal with that situation as a financial entity. Do you call the person up and ask them if they have cancer? Do they fax you medical records?