5 ms·

Serious question, what is paypal? Why don't people just use credit cards directly? Isn't paypal service hard to reach compared? Stripe/square take care of pos,

Serious question, what is paypal? Why don't people just use credit cards directly? Isn't paypal service hard to reach compared? Stripe/square take care of pos, venmo/bitcoin handle peer-to-peer, what is paypal's future?

jackvalentine 9y ago
Why don't people just use credit cards directly? Ordered something from a Japanese auto parts exporter, one month later nothing has arrived. Email them, no response. Use their online inquiry form, no response. Open a problem case with PayPal... response within 2 hours and item in my hand 4 days later. With a credit card I'd dispute the transaction and then... well there is no line of communication tied to the dispute. Perhaps they'd email me, perhaps not. Either way I wouldn't actually get the item like I did.
- Fnoord 9y ago
  > Open a problem case with PayPal... response within 2 hours and item in my hand 4 days later. Until you opened too many claims, then they'll disable your account. Source: friend who worked at PayPal customer support in Ireland.
  - jackvalentine 9y ago
    We'll cross that bridge when we get to it - my bank would drop me as a customer if I was opening too many card disputes also.
Ambroos 9y ago
That's a very US-centric view. PayPal is an abstraction layer. In Belgium, for example, many people do not use credit cards (although adoption is increasing thanks to online shopping). It was quite common a few years back to ask if a friend or family member could order something for you if you knew they had a credit card. We use debit for everything (Maestro combined with some Belgian Atos system). PayPal allows many people without credit card to pay via SEPA Direct Debit instead.
- martinald 9y ago
  Maestro is compatible with MasterCard though so should work anywhere a credit card does? Tbh it's only a handful of EU countries that randomly shun internationally standard debit and credit cards. I was in Turkey recently and everyone was using and accepted CCs. Even tiny coffee shops. No idea why Germany et al can't get it together so people don't have to build these ridiculous integrations. The EU has also capped fees to a very low amount. Makes no sense.
  - kogepathic 9y ago
    > Maestro is compatible with MasterCard though so should work anywhere a credit card does? Maestro is MasterCard. [1] But in my experience you cannot use a Maestro everywhere you can use a MasterCard. Most online stores in Germany will use SOFORT or giroPay instead of Maestro. Sixt doesn't permit car rentals with a debit card. > No idea why Germany et al can't get it together so people don't have to build these ridiculous integrations. Several reasons I can think of: 1. You need to be an adult and pass SCHUFA to get a credit card. Minors can pay online with Lastschrift or SOFORT/giroPay from their account. 2. Germans are very debt averse, and when you can buy things online with SOFORT/giroPay or Lastschrift, there are very few things you really need a credit card for (e.g. certain rental car companies like Sixt) 3. Only ~35% of Germans have a credit card, so a business would be foolhardy to exclude 2/3rds of the market by only accepting credit cards. [2] [1] https://en.m.wikipedia.org/wiki/Maestro_(debit_card) https://en.m.wikipedia.org/wiki/Maestro_(debit_card) [2] https://qz.com/262595/why-germans-pay-cash-for-almost-everything/ https://qz.com/262595/why-germans-pay-cash-for-almost-everyt...
    - Y_Y 9y ago
      Prepaid mastercards solve all of these problems.
      - em500 9y ago
        Prepaid mastercard / visa is not accepted everywhere where non-prepaid is (notably car rentals, hotels).
kev009 9y ago
PayPal _was_ Stripe/Square before they existed. Early on it was the easiest way to accept online payments by a long shot. In modern times it is not competitive in price, features, nor UX. I still use PayPal, but 100% of those transactions are for eBay so with this change I will no longer be a PayPal user.
mschuster91 9y ago
Paypal's future will be cross-border and online shopping stuff. For example, CC ownership in the EU is nowhere near as widespread as in the US, and SEPA direct debit (Lastschrift) is a bureaucracy/maintenance nightmare for merchants: basically, you have to archive the SEPA direct debit authorization for every customer and keep it on file, and you have to store the real name, address etc. of the user, even if you otherwise would not need it at all. And in the event that the debit process fails (it's not instantaneous, it takes a couple days to clear in addition) you have to hunt after the customer to get your money. With Paypal, you essentially have your money a) guaranteed (because Paypal will deal with a debit failure, not you) b) instantaneously available c) without the need to securely store sensitive account data of your customers. Downside is buyer's protection stuff and Paypal's sometimes wildly inconsistent policy enforcement.
- paglia_s 9y ago
  Well, most debit cards nowadays can be used online with Visa Debit / Mastercard
  - oblio 9y ago
    They can? How? In some places they don't have a credit card number.
matthewmacleod 9y ago
what is paypal? PayPal is an abstraction later for accepting payments from different sources. Why don't people just use credit cards directly? From the consumer's perspective, PayPal serves as a platform that stores their payment and shipping details in one place, meaning that in order to make a purchase from a new vendor they don't have to faff around with credit card numbers and shipping details on every purchase. From the vendor's perspective, PayPal is significantly less effort to integrate with than a traditional payments gateway. It means that vendors don't store card details themselves, which means compliance is easier. I've not used it as a vendor for years, but I understand it also provides things like basic order management. Stripe/square take care of pos Yes, but PayPal existed before either Stripe or Square, and provides substantially the same service. venmo/bitcoin handle peer-to-peer Not directly – a payment processor of some kind is still needed to fulfil the same use cases. Not to mention the extensive other difficulties with those systems. what is paypal's future? Pretty much the same as the other options. Don't get me wrong, PayPal has lost some of its moat and the Stripe API in particular is much nicer, but it provides substantially the same services as competitors, so there's not much reason to switch unless the offering from elsewhere is more attractive.
- dk7 9y ago
  In addition, PayPal owns Braintree, which is direct Stripe competitor.
cjsuk 9y ago
Paypal offers one extra thing over the top, which is the ability to easily get your money back if the seller screws up. I use this a lot with sellers in the UK. If you ask them directly for a refund because they forget something or sent you crap (dominos are good at this), it is like getting blood out of a stone. Even being polite, some people will just jam the phone down and tell you to fuck off. If you pay with paypal, they usually don't even respond and the money just gets returned after 2 weeks by default with paypal. If they do respond they usually just refund a portion anyway. So what you're getting on top is arbitration. If you use your credit card, you're pretty screwed here in the UK unless the amount is over £100.
- jazoom 9y ago
  Once I had a charge to my PayPal account for something I didn't buy. I fought with PayPal for about 2 months and they kept giving promises and failing to deliver. One call to my credit card company and I got the money back via chargeback to PayPal. I've never found PayPal to be that simple.
  - cjsuk 9y ago
    That's why you need multiple layers of protection: seller -> paypal -> card company -> real money
    - jazoom 9y ago
      Except I don't "need" that because I've always been able to get the chargeback.
dqv 9y ago
From the business side, it doesn't make sense. As a consumer, I pick PayPal if it's an option. It's an additional layer of consumer protection. I also have a PayPal prepaid card that generates card numbers on the fly so I can have single purpose credit cards.
pjc50 9y ago
Venmo is US-only and bitcoin is a usability disaster area with either unpredictably slow transactions or unpredictably high fees. Paypal solved the "small merchant" problem of getting set up to receive money for selling goods and services on the internet. There are a lot of downsides to the seller, but those are generally because the question of where the default cost of fraud should be borne has ended up there. (Bitcoin of course pushes all responsibility for fraud onto the buyer, and I don't know how Venmo handles it)
thinkloop 9y ago
My karma got wrecked, but the responses were very informative - worth.

jackvalentine 9y ago

Why don't people just use credit cards directly? Ordered something from a Japanese auto parts exporter, one month later nothing has arrived. Email them, no response. Use their online inquiry form, no response. Open a problem case with PayPal... response within 2 hours and item in my hand 4 days later. With a credit card I'd dispute the transaction and then... well there is no line of communication tied to the dispute. Perhaps they'd email me, perhaps not. Either way I wouldn't actually get the item like I did.

Fnoord 9y ago
> Open a problem case with PayPal... response within 2 hours and item in my hand 4 days later. Until you opened too many claims, then they'll disable your account. Source: friend who worked at PayPal customer support in Ireland.
- jackvalentine 9y ago
  We'll cross that bridge when we get to it - my bank would drop me as a customer if I was opening too many card disputes also.

Ambroos 9y ago

That's a very US-centric view. PayPal is an abstraction layer. In Belgium, for example, many people do not use credit cards (although adoption is increasing thanks to online shopping). It was quite common a few years back to ask if a friend or family member could order something for you if you knew they had a credit card. We use debit for everything (Maestro combined with some Belgian Atos system). PayPal allows many people without credit card to pay via SEPA Direct Debit instead.

martinald 9y ago
Maestro is compatible with MasterCard though so should work anywhere a credit card does? Tbh it's only a handful of EU countries that randomly shun internationally standard debit and credit cards. I was in Turkey recently and everyone was using and accepted CCs. Even tiny coffee shops. No idea why Germany et al can't get it together so people don't have to build these ridiculous integrations. The EU has also capped fees to a very low amount. Makes no sense.
- kogepathic 9y ago
  > Maestro is compatible with MasterCard though so should work anywhere a credit card does? Maestro is MasterCard. [1] But in my experience you cannot use a Maestro everywhere you can use a MasterCard. Most online stores in Germany will use SOFORT or giroPay instead of Maestro. Sixt doesn't permit car rentals with a debit card. > No idea why Germany et al can't get it together so people don't have to build these ridiculous integrations. Several reasons I can think of: 1. You need to be an adult and pass SCHUFA to get a credit card. Minors can pay online with Lastschrift or SOFORT/giroPay from their account. 2. Germans are very debt averse, and when you can buy things online with SOFORT/giroPay or Lastschrift, there are very few things you really need a credit card for (e.g. certain rental car companies like Sixt) 3. Only ~35% of Germans have a credit card, so a business would be foolhardy to exclude 2/3rds of the market by only accepting credit cards. [2] [1] https://en.m.wikipedia.org/wiki/Maestro_(debit_card) https://en.m.wikipedia.org/wiki/Maestro_(debit_card) [2] https://qz.com/262595/why-germans-pay-cash-for-almost-everything/ https://qz.com/262595/why-germans-pay-cash-for-almost-everyt...
  - Y_Y 9y ago
    Prepaid mastercards solve all of these problems.
    - em500 9y ago
      Prepaid mastercard / visa is not accepted everywhere where non-prepaid is (notably car rentals, hotels).

kev009 9y ago

PayPal _was_ Stripe/Square before they existed. Early on it was the easiest way to accept online payments by a long shot. In modern times it is not competitive in price, features, nor UX. I still use PayPal, but 100% of those transactions are for eBay so with this change I will no longer be a PayPal user.

mschuster91 9y ago

Paypal's future will be cross-border and online shopping stuff. For example, CC ownership in the EU is nowhere near as widespread as in the US, and SEPA direct debit (Lastschrift) is a bureaucracy/maintenance nightmare for merchants: basically, you have to archive the SEPA direct debit authorization for every customer and keep it on file, and you have to store the real name, address etc. of the user, even if you otherwise would not need it at all. And in the event that the debit process fails (it's not instantaneous, it takes a couple days to clear in addition) you have to hunt after the customer to get your money. With Paypal, you essentially have your money a) guaranteed (because Paypal will deal with a debit failure, not you) b) instantaneously available c) without the need to securely store sensitive account data of your customers. Downside is buyer's protection stuff and Paypal's sometimes wildly inconsistent policy enforcement.

paglia_s 9y ago
Well, most debit cards nowadays can be used online with Visa Debit / Mastercard
- oblio 9y ago
  They can? How? In some places they don't have a credit card number.

matthewmacleod 9y ago

what is paypal? PayPal is an abstraction later for accepting payments from different sources. Why don't people just use credit cards directly? From the consumer's perspective, PayPal serves as a platform that stores their payment and shipping details in one place, meaning that in order to make a purchase from a new vendor they don't have to faff around with credit card numbers and shipping details on every purchase. From the vendor's perspective, PayPal is significantly less effort to integrate with than a traditional payments gateway. It means that vendors don't store card details themselves, which means compliance is easier. I've not used it as a vendor for years, but I understand it also provides things like basic order management. Stripe/square take care of pos Yes, but PayPal existed before either Stripe or Square, and provides substantially the same service. venmo/bitcoin handle peer-to-peer Not directly – a payment processor of some kind is still needed to fulfil the same use cases. Not to mention the extensive other difficulties with those systems. what is paypal's future? Pretty much the same as the other options. Don't get me wrong, PayPal has lost some of its moat and the Stripe API in particular is much nicer, but it provides substantially the same services as competitors, so there's not much reason to switch unless the offering from elsewhere is more attractive.

dk7 9y ago
In addition, PayPal owns Braintree, which is direct Stripe competitor.

cjsuk 9y ago

Paypal offers one extra thing over the top, which is the ability to easily get your money back if the seller screws up. I use this a lot with sellers in the UK. If you ask them directly for a refund because they forget something or sent you crap (dominos are good at this), it is like getting blood out of a stone. Even being polite, some people will just jam the phone down and tell you to fuck off. If you pay with paypal, they usually don't even respond and the money just gets returned after 2 weeks by default with paypal. If they do respond they usually just refund a portion anyway. So what you're getting on top is arbitration. If you use your credit card, you're pretty screwed here in the UK unless the amount is over £100.

jazoom 9y ago
Once I had a charge to my PayPal account for something I didn't buy. I fought with PayPal for about 2 months and they kept giving promises and failing to deliver. One call to my credit card company and I got the money back via chargeback to PayPal. I've never found PayPal to be that simple.
- cjsuk 9y ago
  That's why you need multiple layers of protection: seller -> paypal -> card company -> real money
  - jazoom 9y ago
    Except I don't "need" that because I've always been able to get the chargeback.

dqv 9y ago

From the business side, it doesn't make sense. As a consumer, I pick PayPal if it's an option. It's an additional layer of consumer protection. I also have a PayPal prepaid card that generates card numbers on the fly so I can have single purpose credit cards.

pjc50 9y ago

Venmo is US-only and bitcoin is a usability disaster area with either unpredictably slow transactions or unpredictably high fees. Paypal solved the "small merchant" problem of getting set up to receive money for selling goods and services on the internet. There are a lot of downsides to the seller, but those are generally because the question of where the default cost of fraud should be borne has ended up there. (Bitcoin of course pushes all responsibility for fraud onto the buyer, and I don't know how Venmo handles it)

thinkloop 9y ago

My karma got wrecked, but the responses were very informative - worth.