Why has no payment startup emerged as a meaningful challenger to PayPal?

https://news.ycombinator.com/item?id=1846532

by tkanet • 16 years ago

4 5 16 years ago

news.ycombinator.com

see tkanet answer at http://www.quora.com/Online-Mobile-Payments/Why-has-no-payment-startup-emerged-as-a-meaningful-challenger-to-PayPal

dotBen2• 16 years ago

Anti fraud detection.

It's an issue when you reach scale, hard to detect, and if you end up being ultra sensitive you end up behaving like jerks freezing accounts for no reason (ie what PayPal does today).

skbohra123• 16 years ago

so, what's the solution? That's the question.

dotBen2• 16 years ago

I don't think there is one, the only solution to fraud detection issue is to build something that will ultimately just become like PayPal is with all it's frustrations and shortfalls.

You are also up against regulatory issues (you skirt around becoming a bank = highly regulated) and the massive network effects PayPal/eBay have.

I heard that Square had to pause growth to deal with fraud, and they have the benefit of having Visa/MasterCard/Amex as intermediaries.

cme• 16 years ago

You just have to be proactive with paypal..contact them before launching, stay in touch with them to resolve/ prevent any issues (hopefully) before they arise.

tkanet• 16 years ago

I think it is just a matter of "new marketplaces". Paypal benefited from the eBay marketplace ...and found casual online merchants.

Generally, marketplaces get hooked with very few mainstream payment methods.

Next time there will be a completly new marketplace, with new types of merchants and new market mechanic...you will see a new, major player...but it has to be disruptive to PayPal.

Online to Offline is a new marketplace in many ways...looking for a unified payment. If i am not mistaken, the next big payment player may come from that....

Why has no payment startup emerged as a meaningful challenger to PayPal?

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