On 10 May 2008, at 22:51, steve wrote:
I’m not sure about the paypal. A long while back when I suggested
paypal there was a backlash from concerned people who thought that
paypal was evil because it was American. I’ll check on that.
( not the evil part, the paypal part)
Typically people dislike PayPal because of their business practices.
In the event of a dispute they can freeze funds held in your account,
and even withdraw money from the bank account of a wounded party in
order to reimburse a scammer. Their "payment protection" doesn't
mediate disputes properly, but tends to side with one party based
entirely on an arbitrary set of rules which rarely happen to coincide
with the true circumstances of the sale. PayPal seem to have some
funny ideas about shipping and proof of delivery. People prefer them
for their perceived "protection", but in reality they exclude many
transactions from this cover and it is especially galling to find
that one would have been covered for a transaction had it been
initiated on eBay, but that one is not because one has found a
bargain outside of PayPal's monopoly.
In the UK - and I am sure it's the same many other places - PayPal
acts like a bank or a credit card company, but without the oversight
or regulation that consumers enjoy from those "other" types of
entities. When one government regulator declared that, due to a
specific act of law, such online payment methods did fall under its
remit, PayPal took the matter to court, in order to contest this and
to stay free of fair policing of their processes & decisions. Also:
http://tinyurl.com/3bnvfb
Whilst most of us agree that one should be able to enter into a
contract on whatever terms one wishes, typically one joins PayPal for
the express purpose of sending or receiving a specific payment, and
one does not scrutinise their small print as part of that process.
It's unAmerican to bitch about monopolies, but PayPal have an unfair
advantage in the online-money-transfer marketplace.
Consumers have long memories, and I will not forget how we were
screwed out of a choice of providers shortly after the PayPal / eBay
merger. When I first started using these services PayPal had
competition - they had 60% of the market, perhaps, but they had a
couple of competitors giving them a decent run for the money. Here in
the UK "NoChex" was a popular alternative, and had lower fees for
many (most?) transactions - now they do other other online payment
business, but back in those days they were a genuine send-a-couple-of-
quid-to-Dave-by-email PayPal-alternative. Most people making frequent
transactions through eBay, usenet adverts and other forums had
multiple accounts - one with PayPal, because it was the most common
choice of other people, the dominant "brand" - and typically you also
had an account with another provider who you preferred or who offered
lower fees. In those olden days sellers on eBay used to offer at
least a couple of alternative online payment methods and typically
stated that "buyer pays fees" - if a buyer had money already held
with one of his account providers then he might choose that one, or
he might choose the one he trusted more, or he might simply have an
account with only one of the providers favoured by the seller, but
there was a financial incentive for buyers to use the cheaper payment
provider (in this free market, some eBay sellers differentiated
themselves by advertising "no PayPal fees"). After the PayPal / eBay
merger, eBay instigated a rule that sellers were not allowed to
"discriminate upon payment type" - basically, they were no longer
allowed to pass the fees incurred by online payments onto the buyer -
and suddenly, this incentive (to choose the cheaper payment provider)
was removed. Remember that many people had two accounts - one with
PayPal and one with another of the handful of alternatives - and that
many people were used to having to accommodate their transaction-
partner's choice of payment provider - PayPal were not by any means
the cheapest provider, but suddenly they flourished. Perhaps
marketing was causal, perhaps first-mover advantage, but everybody
had a PayPal account and - especially because they were now well-
integrated with eBay ("you have just bid on this item - would you
like to pay with PayPal?") - suddenly PayPal just wiped the floor
with the competition in the send-a-couple-of-quid-to-Dave-by-email
payment marketplace. Consumers may have long memories, but perhaps
the Internet's memory is selective - I've talked to at least one
friend who was making online payments at this time who doesn't
remember any of this. I guess he perhaps was not as active on
secondhand computer-parts forums as I was at the time, but I recall
the upset & furore as sellers realised they were going to be stiffed
with higher transaction fees - perhaps double? - as they would now
have to take PayPal instead of their favoured provider. It's kinda
late here, and I don't know if I've explained myself very well - I
wouldn't blame you at all for reading this paragraph as all very
anecdotal - but take it from someone who watched it happen, this eBay
payments rule which shifted the cost of fees from the buyer to the
seller is _directly_ responsible for PayPal's present monopoly. The
UK has a body called 'The Monopolies and Mergers Commission" and the
conjunction in this name is SO apt for describing the events of the
PayPal / eBay buy-out, and it is a criminal neglect that this was not
investigated & regulated. We no longer have a free market in these
matters, and there is no longer any competition to prevent PayPal
stiffing its users on fees (or on anything else, for that matter).
Having said all this, PayPal are pretty good for online shops. Most
everyone has an account, and those that don't can choose to use a
credit card instead of opening one. They're probably comparable in
cost to a dedicated payments processor and anyone can setup and
simply start using PayPal for an online shop. Nevertheless, it's not
surprising that many geeks don't like them.
Stroller.
_______________________________________________
Openmoko community mailing list
community@lists.openmoko.org
http://lists.openmoko.org/mailman/listinfo/community
