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PayPal is not a bank, although people seem to think it is, and they seem to be more than happy to let people think that. It's long overdue for some serious reg

PayPal is not a bank, although people seem to think it is, and they seem to be more than happy to let people think that. It's long overdue for some serious regulatory oversight.

true_religion 11y ago
Don't they have quite a bit of oversight since they're a monetary transmitter? What more oversight would be needed?
icebraining 11y ago
It is in Europe (registered in Luxembourg).
deleted 11y ago
[deleted]
dangrossman 11y ago
> It's long overdue for some serious regulatory oversight. It's hard to imagine there being more oversight than the over 200 governments regulating them currently, including ~55 separate agencies in the US. https://www.paypal.com/webapps/mpp/licenses https://www.paypal.com/webapps/mpp/licenses PayPal is a fully licensed and regulated bank in some regions including all of the EU, and is licensed and regulated by each US state it operates in. Many of the startup alternatives people recommend seem to be operating on a "try to grow fast enough that we can afford to operate legally when states start suing us" basis, as they aren't similarly licensed.
s73v3r 11y ago
Why aren't they a bank? Because they claim they aren't?
- dangrossman 11y ago
  Because federal regulators said so over 10 years ago. They don't accept deposits as defined by FDIC, engage in fractional reserve banking, or otherwise meet the definitions of a bank in the US. They're more like an escrow service, holding funds on your behalf in accounts at actual banks. They are a money transmitting entity, which means obtaining 54 state/territory licenses to operate in the entire US, and they hold all of those.
return0 11y ago
In Europe, paypal registered as an actual bank (in luxembourg). Incidentally, i haven't had problems with them as a merchant through the years other than the fact that they ask for too much documentation in order to accept payments more than a few thousand, and don't have enough withdrawal options sometimes. If i used a bank instead i m sure it would incur much higher fees and bureaucracy.

PayPal is not a bank, although people seem to think it is, and they seem to be more than happy to let people think that. It's long overdue for some serious regulatory oversight.

true_religion 11y ago

Don't they have quite a bit of oversight since they're a monetary transmitter? What more oversight would be needed?

icebraining 11y ago

It is in Europe (registered in Luxembourg).

deleted 11y ago

[deleted]

dangrossman 11y ago

> It's long overdue for some serious regulatory oversight. It's hard to imagine there being more oversight than the over 200 governments regulating them currently, including ~55 separate agencies in the US. https://www.paypal.com/webapps/mpp/licenses https://www.paypal.com/webapps/mpp/licenses PayPal is a fully licensed and regulated bank in some regions including all of the EU, and is licensed and regulated by each US state it operates in. Many of the startup alternatives people recommend seem to be operating on a "try to grow fast enough that we can afford to operate legally when states start suing us" basis, as they aren't similarly licensed.

s73v3r 11y ago

Why aren't they a bank? Because they claim they aren't?

dangrossman 11y ago
Because federal regulators said so over 10 years ago. They don't accept deposits as defined by FDIC, engage in fractional reserve banking, or otherwise meet the definitions of a bank in the US. They're more like an escrow service, holding funds on your behalf in accounts at actual banks. They are a money transmitting entity, which means obtaining 54 state/territory licenses to operate in the entire US, and they hold all of those.

return0 11y ago

In Europe, paypal registered as an actual bank (in luxembourg). Incidentally, i haven't had problems with them as a merchant through the years other than the fact that they ask for too much documentation in order to accept payments more than a few thousand, and don't have enough withdrawal options sometimes. If i used a bank instead i m sure it would incur much higher fees and bureaucracy.