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I suspect that PayPal is the payment processor of choice for all crooks and scammers. Thus, choosing them as your payment processor is risking your business rep

by bdfh42 17y ago

I suspect that PayPal is the payment processor of choice for all crooks and scammers. Thus, choosing them as your payment processor is risking your business reputation - they will always default to treating their customers with suspicion and if they have your cash in their coffers then they will sit on it given any excuse to be "suspicious" - that's the business model they operate within. While the cost of processing payments is an issue (particularly with otherwise low cost software downloads) it is important to link your business to partners with a solid reputation for probity and good service.

ig1 17y ago
The reason that PayPal survived and is still around is because they took a very risk averse attitude and pro-actively try to combat fraud. Most of their competitors didn't fail because of lack of customers, they failed because they couldn't handle the fraud. If you want to get a more detailed view of the issues have a read of the interview Max Levchin gave to JL in Founders at Work.
- pierrefar 17y ago
  There is a big difference between aggressive fraud protection and pooping on your customers. Being polite and handling mistakes intelligently doesn't mean they can't combat fraud effectively.
__david__ 17y ago
The one advantage paypal has is the fact that it isolates your site from credit card numbers. If I go to some podunk site to buy something I almost always choose the paypal option even if they have a merchant account set up. Why? Because with paypal I end up authenticated with paypal.com and I know that no important info is passing through to the podunk site's servers. Otherwise I'm entering my credit card number into their site and I have no way of knowing how good or crappy their security is. I'm basically having to trust them not to do something stupid like store it in their DB, or mail it plaintext to their order processing guy, or some other brain dead thing.
- nfnaaron 17y ago
  As you say, good for the consumer who may not have confidence in a site's honesty. Good for the site too, in that a consumer's credit card information never touches your database; less liability in case of a data breach.

by bdfh42 17y ago

ig1 17y ago

The reason that PayPal survived and is still around is because they took a very risk averse attitude and pro-actively try to combat fraud. Most of their competitors didn't fail because of lack of customers, they failed because they couldn't handle the fraud. If you want to get a more detailed view of the issues have a read of the interview Max Levchin gave to JL in Founders at Work.

pierrefar 17y ago
There is a big difference between aggressive fraud protection and pooping on your customers. Being polite and handling mistakes intelligently doesn't mean they can't combat fraud effectively.

__david__ 17y ago

The one advantage paypal has is the fact that it isolates your site from credit card numbers. If I go to some podunk site to buy something I almost always choose the paypal option even if they have a merchant account set up. Why? Because with paypal I end up authenticated with paypal.com and I know that no important info is passing through to the podunk site's servers. Otherwise I'm entering my credit card number into their site and I have no way of knowing how good or crappy their security is. I'm basically having to trust them not to do something stupid like store it in their DB, or mail it plaintext to their order processing guy, or some other brain dead thing.

nfnaaron 17y ago
As you say, good for the consumer who may not have confidence in a site's honesty. Good for the site too, in that a consumer's credit card information never touches your database; less liability in case of a data breach.