Six years ago, PayPal could claim a 91 per cent market share in the US. Today it's struggling to claim long-term relevance in the surging online payments market, the market it helped to create. The problem isn't really a matter of functionality, it's a matter of focus and being able to sell its new services clearly and concisely …
Re: No alternative to PayPal here
Strange that nobody seems to have heard of Clickandbuy? Based in the EU (and, yes, that includes the UK). PayPal-ish service.
They can't be that unknown given that Apple's iStores support it.
Monopolies never give good service, but Americans seem to like them.
As an American, I can say that for myself and many others, we despise certain monopolies.
I'm pretty sure we had anti-trust laws before most of Europe did, but unfortunately our duopoly of
political parties have lead to corruption and complacency. :-(
Paypal is now history
Being a buyer only, I stopped Paypal when they started to refuse electronic Visa cards* numbers, and demanded my real visa number instead. In essence, this "secure" provider was imposing unreasonable risk on me, probably with the intend to steal money (couldn't think of any other reason). And this was before all the phising problems.
There is no point, today, if your bank is from this century, to even consider PayPal.
* Totally secure way to pay online: virtual VISA number, limited to a certain amount of money, limited to 2 months duration, generated by your bank portal. Very popular in France.
Re: Paypal is now history
Because if the buyer decides to screw paypal down the road, they can't in turn screw you and make you the one fraud is committed against.
I used to sell a lot on ebay before as well, now I'll only buy stuff if I can't find it elsewhere. Ebay/Paypal need some serious competition to kick them up the arse, then they might be good again. TBH I think facebook has missed a trick here, it's already got the userbase, and could easily set-up a ebay like service, might actually get them some revenue outside of ads. Other large companies that could give them a run for their money are google/amazon (could set-up a amazon auction site). But the only alternatives I've found in the UK are small sites, without a significant user base. You need a large userbase of sellers to get a large userbase of buyers, and you wont get a large userbase of sellers unless there is a large userbase of buyers, catch 22.
To be fair, I honestly wouldn't buy anything from a seller who wasn't using paypal. As many dodgy buyers as there are out there, there are more dodgy sellers. And if anyone asked me to send them a cheque or western union, I'd immediately think they were up to something. It's only through enforcing stuff like paypal that buyers can be certain this won't happen to them.
And there's the nub of the matter: Paypal's product is their reputation. You've heard of them and reckon that if they mis-behave there is some chance that you'll be able to take action against them. Mastercard and Visa are in a similar position, but there isn't much room in the market for "companies that everyone has heard of", simply because "everyone" can only remember a handful of names.
e-Commerce payments are a natural monopoly. The barrier to entry is really quite large when you consider that anyone outside the country (legal jurisdiction) of a newcomer will automatically start from a position of "No, I won't be able to get my money back.".
I tried signing up for a 'free' PayPal account in the early days, only for the "please confirm" email to mention a $10 charge (yes, I joined from the UK, why should I expect new charges in my currency?) I politely declined to join at this point, yet they *still* took the money, although I had no account. They correctly assumed that I was not prepared to waste time and effort trying to chase down a small charge overseas. I did learn a valuable lesson though - PayPal appear to be thieves, and nothing I have seen in the decade since has persuaded me otherwise. $10 seems to have been good value for this lesson.
When you sign up for a "free" offer and they ask for your credit card details, understand that you are being scammed, don't give them the details and walk away.
Tried eBay once, never again.
Looking for a hard drive caddy for Dell laptop, outbid at the last nano-second by someone using some smartass software.
An AUCTION is where you can see the other bids !
Few weeks later found a whole Dell Latitude (with broken screen) at a car boot sale for less than the winning eBay bid for a single part.
Paypal is just adding complicated insult to injury.
Re: Tried eBay once, never again.
its the way to do it as you get Dumb ass users who bid over the retail price some times, if you place your bid say 30 mins or day before it most likely end up going over that amount
Re: Tried eBay once, never again.
No, that's just ONE type of auction (the common English auction). There are others. For example, in a sealed-bid auction, everyone only gets one (secret) bid which no one but the seller sees. eBay and other auction websites simply use a variant on the Vickrey auction.
I stopped using Ebay/PayPal after PAYPAL ripped me off ; not a buyer or seller, but Paypal itself.
I paid with a credit card and had an email receipt with the correct last 4 digits, only for PP to take the money via my Debit card and leave me severely overdrawn at the bank, and I incurred £75 in bank charges.
When I called them their reply was basically "Tough, we had both card details on file and picked the first on the list".
(I also had issues with the bank allowing me to go £300 overdrawn on a single £600 transaction).
I will never, ever use any company that requires use of Paypal, and ditched Skype for the same reason.
"(I also had issues with the bank allowing me to go £300 overdrawn on a single £600 transaction)."
The UK's retail shyster banking system uses the "no annual / monthly fees" lure to get you on-board, before they spam you with hidden charges, such as £35 for an automated form letter that tells you you're now overdrawn (because they've just charged you £35 to send you the letter telling you about it—I'm not kidding: this genuinely happened to me.)
In mainland Europe, you pay a monthly fee instead, but for that you never, ever, ever get overdrawn unless you have an agreed overdraft. (In Italy, overdrafts are unusual for current accounts; they're mostly reserved for business accounts.) There are no other fees. None. That monthly fee is their sole source of profit, which makes it all nicely transparent. (Oh, and in Italy, most banks are still very much local affairs—some are cooperatives—with a cast-iron mandate to invest and loan money to local businesses. They're not allowed to just keep saying "No!")
One of the great benefits of being in the EU—however tangentially—is that the freedom to travel, live and work in any EU nation applies just as much to us Brits as it does to any Pole or Swede.
They nicked my account 3 times, with a 4th pending, on the same invoice. That wiped out my balance and the bank thankfully saw that something wasn't quite right and froze the transactions. It took me almost a month to get it straight. Mistakes happen, I understand that. But, while I might forgive them, I sure won't forget.
A couple of years ago I had occasion to buy a lot of stuff on EBay.
Once I'd spent several thousand pounds, I got a message from PayPal, not saying "You're a great customer, keep it up" or anything, but "You can't settle by credit card any more. You must give us your bank details so we can just siphon money out whenever we feel like it."
Needless to say, PayPal and EBay have seen zero business from me since then.
Another banging open source column
Oh it's nothing to do with the fact that..
...Paypal is utterly despised for it's costs and "security"
Sarah Lacy breathlessly hyping new startups because developers find that they are easy to work with? I would have never expected that.
You bloody well expect to get great customer service from an eight month old startup that has 28 employees who are looking to get wealthy - but what happens when they are successful and suddenly there are 500 employees, some of them not so experienced, talented or motivated any more, and now the startup is supposed to start showing some profits instead of just getting more funding rounds? Plenty of opportunities to dent those halos, especially as none of the new players seem to have really gone outside USA borders just yet.
But here's hoping the likes of Braintree and Stripe are successful - if only to force Paypal to cut its fees.
My reply will show up shortly no doubt, but you've put it much better. Nothing to see here - source article from Sarah Lacy was hugely distorted and comparing chalk with cheese.
Frankly, I only use PayPal because ebay doesn't give you a choice in the matter. PayPal sucks on so many levels, especially as a seller. They double dip and have zero customer support if you need help, like a customer claiming that their package never arrived even though you have proof of delivery. Three cheers for the competition.
Second Hand Background is Wrong
It's a decent article as X.commerce has been too broadly and vaguely positioned, but the whole PayPal crisis theme is nonsense and based on an article of the same basis on Pando Daily that itself was based on an interview with Elon Musk, a PayPal founder, that was sensationalised under a "PayPal is screwed" title!
Putting aside the chinese whispers of this type of report, it seems to me Musk was actually trying to emphasise evolvement of simple online payment solutions by firms like Stripe in the area of PayPal's core business. But: Musk is now a major investor in Stripe so the source argument here was never going to be objective.
Stripe is neat but it's just a hugely simplified version of PayPal. There is no technology innovation here. It's just a lean product. PayPal is never going to be Stripe because it would need to cut away functionality and value add. Stripe on the other hand might one day be PayPal, because broader product = more revenue.
If you go back to the "source article" the other theme is Braintree, an undoubtedly innovative and cutting edge Merchant payment services provider. But Braintree and PayPal are no more alike than Stripe and PayPal are. Braintree is a full service Merchant-oriented solution, PayPal is a user/customer-first payment wallet.
PayPal has never really tried to play in the Merchant space that Braintree is transforming (and even PayPal's "Large Merchant" re-entrance the past few years is as a wallet alongside card payments) so to suggest that success at Braintree is indicative of failure at PayPal is no more accurate than when a Stripe investor says it.
I actually work for a competitor of PayPal - but I'm informed enough to see that from the Merchant perspective of this (and the source) article, actually PayPal have innovated more this past year than they have in the prior decade. From a Merchant and multi-channel standpoint the competitor view is "PayPal are really going for it".
That's hardly the withering flower implied by "bleeding" or "screwed" - sounds more like blossoming. Of course most of this carries no weight with a vast majority of respondents who are aggrieved consumers or sole-trader PayPal/eBay users who believe their terrible service experience reflects on PayPal's strategic growth. It doesn't!
Re: Second Hand Background is Wrong
I have to disagree with you there.
Paypal's dispute behaviour is extremely important to their long-term health, and it's almost certainly their key strategic failure.
The reason for this is that the most important asset of any online payments provider is the trust of buyer and seller.
Both parties need to be confident that if the other fails to deliver, the dispute will be resolved quickly and effectively.
Without that trust, Paypal will fail because nobody wants to use it.
People don't use a service that they think will screw them over, and trust is extremely hard to regain once lost.
Am I the only one around here...
Who's never heard of Square, Braintree, or Stripe?
Re: Am I the only one around here...
I've heard of square and stripe, braintree is a new one to me.
An article based on Pando (Pander) Daily... a bit of a fail for a site like El Reg.
an interesting question would be why the monopolies commissions in various countries have not taken a hard stance against compulsory Ebay and Paypal. I think Australia was the only country that did.
I made the mistake
of linking a bank account to a Paypal account. This apparently gives Paypal the right to take money out of your bank account in the case of a dispute without bothering to notify you first. Goodbye Ebay, goodbye Paypal. I'd rather give my stuff away.
If you must deal with paypal
Have more than one bank account. Use one account as a gateway to paypal/ebay, but immediately transfer most funds to a different account to keep their greedy mitts off of it.
If you are selling on ebay, you don't need paypal if you have your own merchant account.
They do this to avoid anti-trust issues or possibly visa/mastercard requires it of them
When you purchase things via paypal, make sure you have taken any payments you have received out of
your "credits" and transferred it to your bank account and then to your safe bank account otherwise they
will use that first. Then make sure the credit card option is selected each and every freaking time or they
will attempt to take from your bank account. They do this because money taken from your account comes
to them essentially free while money from your credit card forces them to pass on the 2.3% they charge
every time regardless of pay source. This is where they make their largest profit!
You use the credit card option to protect YOU. Paypal has zero incentive to work on your behalf regardless
of the glaring level of fraud. If they can't get the money from you, they at least put on a show, but still rarely
appear to actually act. After a while they will, with crocodile tears, say they are sorry but you need to pay.
At which point I suggest you tell them to pound sand unless you have no options other than ebay to sell.
Me? Well, I made the mistake of taking a payment through paypal for a friend.
She did web work for someone and their was a dispute. The buyer contacted paypal and asked for
their money back. Since the TOS states that services are not covered by the buyer protection program
paypal ruled in my friend's favor. However, shortly before a year had passed the buyer told here credit
card company that it was an unauthorized charge and paypal attempted to take the money from my
paypal account (I did not have a bank account linked and nothing in the credits at the time) so they were
not able to get it. They froze my account.
Having spoken to them, they said they would "fight" for me, etc. etc.
So, despite having emails from the buyer complaining about the purchase, and thus proof that it was
indeed authorized, paypal managed to lose the dispute. (Or that is the story they told me, I think it was BS).
So, they asked me for the money and I told them that the buyer was ripping THEM off and not ME.
I figured that if they had an actual risk of loss, they might actually make an effort.
Well, they passed on my "debt" to a collector who demanded the money.
I asked for proof of debt, there was none, and threatened to sue them if they put anything on my
credit report. They went away, but I still can't sell on Ebay and the only purchase I make are
when the seller is local and I can meet and pay cash.
Re: If you must deal with paypal
Sounds like you had a lucky escape with the collectors. I cancelled a mobile data contract with 3 during the 'cooloff' period (the coverage was dire in the city centre, significantly poorer quality than expected) only for them to keep demanding payment. Only every time I disputed the debt and asked for proof, they said they'd look into it, and promptly bounced it onto a different collections agency. Presumably in the hope I'd get sick of fighting and cave in.
(Never discuss the 'debt' with these people - it is always the 'alleged debt' unless they have sent cast iron proof.)
Paypal doesn't have a mobile site or doesn't detect opera
I donate to Android freeware/ open source apps and of course when I tap donate button, it opens a paypal url in my default browser (opera mobile).
I always saw a very awkward desktop paypal page on mobile. Gave up several times since I don't feel OK to give secure info when I had to zoom in/ out stupidly.
I am just hoping they are stupid enough nor to check mobile opera, having a mobile site after all. They sure have mobile site right?
re: the enforced PayPal tie-in
Ebay does not force you to transact the payment via Paypal. They force you to offer Paypal as a payment option. You can have other payment options alongside Paypal. Please check next time before mouthing off.
Re: re: the enforced PayPal tie-in
What is difference?
They force you to offer it, thus they force you to use it because you cannot back out of the deal saying "I don't want to use Paypal, I only offered it because Ebay say I have to"
Can I just add another "they deserve it, they're ****ing useless" comment.
Worse than Jewellery by Gerald Ratner. I've tried to close my account in protest:
"Sorry you cannot close you're account"
"4 transactions by 2 retailers"
Which retailers and transactions?
"TheHut.com - 18372340 & 2389018290
Zavvi - 984303454 & 4534543534"
So I search for those transaction ID's in my account, nothing, ask Zavvi and TheHut, they have no idea, contact Paypal, no response, contact them again, no response, set up a complaint about the lack of response, no response. I only want to close my account ffs.
A lot of whining from sellers here. From a buyers perspective Paypal looks pretty good because, in my experience, the scammers are on the sellers side. One example is when my wife tried to buy a cheap and cheerful tablet on-line. Then it became apparent the seller was either scamming or not being honest. The device had not arrived within three weeks and the seller had become abusive. Paypal refunded the money no questions. That's what a buyer wants in order to have confidence using the service and, no doubt, it costs Paypal to look out for the buyer.
Paypal is pretty much a monopoly internationally
And that needs to stop.
It has come to the point that Paypal can effectively put people out of business by freezing their accounts and refusing further transactions for whatever reason. Some competition is desperately needed here.
Re: Paypal is pretty much a monopoly internationally
We as humans tend towards monopolies, because we are lazy fuckers. The vast majority of people simply cannot be bothered to search out an alternative to Amazon, Apple, ASOS, eBay, Facebook, Google, etc. Sure, there are better options in the respective markets, but if most of the people just go with the default then the competition have got a lot of work to do.
Back to school Mr Asay, it's either "comprises" or "consists of".
And of course backlash over their blocking of wikileaks payments and online cloud storage services has nothing to do with their fall in market share.
re:I think the 1980s just called and Douglas Adams wants his telephone sanitation engineers back.
HHGTTG was 1970's
When using ebay I always ask the vendor if BACS is OK
a lot of them are. OK you don’t get the Paypal guarantee but I don’t buy brand new iPods for £50 from new sellers.
Didn't anyone notice the opposite happen?
This came out prior to eBay/Paypal's actual results coming out; they did VERY well and doubled their earnings. All the evidence points to this article being wishful thinking on the part of investors in a rival startup; mostly based on information from Pando Daily. The author really shouldn't be allowed to write for The Reg again, as his bias and poor quality of information has been exposed.
Hard to believe The Reg is keeping this article up, now that it's been proven materially incorrect. If eBay and Paypal are over, someone needs to tell them and their investors - they're up 20% year on year, which for an established market leader is excellent. I hate eBay/Paypal's dominance as much as the next man, but not enough to deny reality entirely.
Alternative payment methods
Well, I know that PayPal is the most common payment method but there a lot of other methods which are easier are safer, like paysafecard. This way you don't risk to loose money and you save time, money and nerves.
The emergence of new e-commerce payment methods is all well and good, and may be what all the "cool kids" are using now, but these changes are largely irrelevant for the e-tailers which my friends/relatives/ acquaintances/co-workers and I deal with. With most transactions, at least in this part of the United States, you are given a choice of credit or debit card, or Paypal. I find that Paypal allows me the safest way to make payments to e-tailers online, and the fact that most e-tailers here don't give us any other choices means that, until these other e-commerce payment methods are more widespread, we will continue to use Paypal for the forseeable future.