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How come nobody sues them? How come there hasn't been enough of an uproar to get congress involved in regulating PayPal? Reading HN, these horror stories seem

How come nobody sues them? How come there hasn't been enough of an uproar to get congress involved in regulating PayPal? Reading HN, these horror stories seem to be fairly common, or maybe I'm just hearing the same stories over and over again.

yummyfajitas 16y ago
Currently we have two choices. You have banks, which are huge, bloated, slow, massive barriers to entry. If you want to build an MVP and accept payments right away, good luck with a bank. But your money is safe. On the other hand, we have PayPal. Sometimes they steal your money. For a very small business, paypal is easy to get going with. Millions of small business people have decided that this tradeoff is right for them - worst case, you lose a few grand. I'm hoping congress doesn't turn PayPal into a bank. If they do, we will only have one choice (banks), and life will be harder for smaller businesses. Thousands of very small businesses have decided PayPal's offers the right set of costs/benefits, why do we want congress to second guess them?
- polynomial 16y ago
  > I'm hoping congress doesn't turn PayPal into a bank I'm hoping this doesn't mean you think any new regulatory oversight on PayPal would bring more harm than benefit.
  - deleted 16y ago
    [deleted]
  - yummyfajitas 16y ago
    In principle, I'm sure one could come up good regulations. In practice, I'm leery of congress's ability to do anything besides make PayPal more bank-like. That would be bad, since if customers really wanted a bank, they would already have a merchant account at one of {BankAm, Citi, Chase, PNC, ...}. Some sort of "cc-number portability" regulations might be useful - i.e., if your customers saved their recurring payment cc-number into PayPal, you can take the cc-numbers to a new service provider. It's a minimal intervention which empowers customers. I'd also be interested in having congress create a BankLite category of institution - more protections than PayPal, but not as heavyweight as BankAm. Some people want something which is 51% paypal, 49% bank, and a BankLite category might fit their needs better. Shoehorning PayPal into this would be a bad idea, but creating the option might be helpful. [edit: As suggested by extension, better disclosure of PayPal's non-bank like nature would also be very helpful. Minimalist regulations which enhance customer choice/knowledge are awesome.]
- extension 16y ago
  Then perhaps congress should force Paypal to clearly advertise that they make serious errors and steal from you, so that these small businesses are clear on the choice they are making.
  - pbhjpbhj 16y ago
    >advertise that they make serious errors and steal from you Might look a bit like a truism .. Paypal bank is a bank? Seriously though even knowing that Paypal mess up and take money and have terrible customer service doesn't mean that they are necessarily worse than a highstreet bank. Banks mess up and have poor customer service too - admittedly knowing the occurrence rate of monies taken on both sides would allow the price to be weighed against the negative factors (of both Paypal and regular banks) in a more transparent way.
Vivtek 16y ago
I've been using PayPal since 2001 when I signed up in order to send Sluggy Freelance a $5 donation. Since 2002 I've used it increasingly for payments from my freelancing customers - there was no other convenient way to get money from Europe to America, and PayPal revolutionized the translation industry (along with Moneybookers and similar services, but PayPal is the biggest). Not once have I had any problem with them. Jacques, I've had a bank - a real live regulated bank - deduct my paycheck instead of depositing it, and not notice until I complained. Granted, they fixed it immediately when I complained, and PayPal may not, but human error does occur. Certainly PayPal has never gratuitously deducted money from my account.
- matrix 16y ago
  Here's the thing though: when the bank made a mistake, you had recourse. You actually had someone to complain to - you could go to a branch or otherwise deal with a human. With paypal, you have no recourse, except to hope your case gets voted to the top of Reddit and some paypal insider takes pity on you.
  - points 16y ago
    There are several 'internet only' banks, or phone only banks. You have a similar amount of recourse with those.
  - krakensden 16y ago
    you're overestimating the worth of that human- retail banks are generally franchisees, and they have very limited powers. If the problem has to be escalated, you're in the same place as you would be with Paypal, except BoA insiders don't read reddit.
    - netcan 16y ago
      The ability to go into a branch and refuse to leave until something is done is not a silver bullet, but it's something. If you happen to run in to 2 or three other unhappy customers with the same idea, it's even better.

yummyfajitas 16y ago

Currently we have two choices. You have banks, which are huge, bloated, slow, massive barriers to entry. If you want to build an MVP and accept payments right away, good luck with a bank. But your money is safe. On the other hand, we have PayPal. Sometimes they steal your money. For a very small business, paypal is easy to get going with. Millions of small business people have decided that this tradeoff is right for them - worst case, you lose a few grand. I'm hoping congress doesn't turn PayPal into a bank. If they do, we will only have one choice (banks), and life will be harder for smaller businesses. Thousands of very small businesses have decided PayPal's offers the right set of costs/benefits, why do we want congress to second guess them?

polynomial 16y ago
> I'm hoping congress doesn't turn PayPal into a bank I'm hoping this doesn't mean you think any new regulatory oversight on PayPal would bring more harm than benefit.
- deleted 16y ago
  [deleted]
- yummyfajitas 16y ago
  In principle, I'm sure one could come up good regulations. In practice, I'm leery of congress's ability to do anything besides make PayPal more bank-like. That would be bad, since if customers really wanted a bank, they would already have a merchant account at one of {BankAm, Citi, Chase, PNC, ...}. Some sort of "cc-number portability" regulations might be useful - i.e., if your customers saved their recurring payment cc-number into PayPal, you can take the cc-numbers to a new service provider. It's a minimal intervention which empowers customers. I'd also be interested in having congress create a BankLite category of institution - more protections than PayPal, but not as heavyweight as BankAm. Some people want something which is 51% paypal, 49% bank, and a BankLite category might fit their needs better. Shoehorning PayPal into this would be a bad idea, but creating the option might be helpful. [edit: As suggested by extension, better disclosure of PayPal's non-bank like nature would also be very helpful. Minimalist regulations which enhance customer choice/knowledge are awesome.]
extension 16y ago
Then perhaps congress should force Paypal to clearly advertise that they make serious errors and steal from you, so that these small businesses are clear on the choice they are making.
- pbhjpbhj 16y ago
  >advertise that they make serious errors and steal from you Might look a bit like a truism .. Paypal bank is a bank? Seriously though even knowing that Paypal mess up and take money and have terrible customer service doesn't mean that they are necessarily worse than a highstreet bank. Banks mess up and have poor customer service too - admittedly knowing the occurrence rate of monies taken on both sides would allow the price to be weighed against the negative factors (of both Paypal and regular banks) in a more transparent way.

Vivtek 16y ago

I've been using PayPal since 2001 when I signed up in order to send Sluggy Freelance a $5 donation. Since 2002 I've used it increasingly for payments from my freelancing customers - there was no other convenient way to get money from Europe to America, and PayPal revolutionized the translation industry (along with Moneybookers and similar services, but PayPal is the biggest). Not once have I had any problem with them. Jacques, I've had a bank - a real live regulated bank - deduct my paycheck instead of depositing it, and not notice until I complained. Granted, they fixed it immediately when I complained, and PayPal may not, but human error does occur. Certainly PayPal has never gratuitously deducted money from my account.

matrix 16y ago
Here's the thing though: when the bank made a mistake, you had recourse. You actually had someone to complain to - you could go to a branch or otherwise deal with a human. With paypal, you have no recourse, except to hope your case gets voted to the top of Reddit and some paypal insider takes pity on you.
- points 16y ago
  There are several 'internet only' banks, or phone only banks. You have a similar amount of recourse with those.
- krakensden 16y ago
  you're overestimating the worth of that human- retail banks are generally franchisees, and they have very limited powers. If the problem has to be escalated, you're in the same place as you would be with Paypal, except BoA insiders don't read reddit.
  - netcan 16y ago
    The ability to go into a branch and refuse to leave until something is done is not a silver bullet, but it's something. If you happen to run in to 2 or three other unhappy customers with the same idea, it's even better.