PayPal also happens to have a return shipping protection for buyers, which covers the return shipping costs even when the merchant does not. You're probably re

PayPal also happens to have a return shipping protection for buyers, which covers the return shipping costs even when the merchant does not. You're probably referring to PayPal disputes, but PayPal also covers merchants from chargebacks (even if the chargebacks themselves are won by the buyer), when a physical product is shipped. So it seems like they must eat a lot of the fees because in the case of the credit card dispute PayPal is eating the charge if they do Seller Protection. Somehow they do all this while offering standard credit card rates, so I think they're heavily undervalued by startups.