Exactly How Screwed Is PayPal? (Hint: Very)

http://pandodaily.com/2012/07/14/exactly-how-screwed-is-paypal-hint-very/

by davidedicillo • 14 years ago

78 80 14 years ago

pandodaily.com

trotsky• 14 years ago

Hint: However much the venture investors in my blog want me to tell you it is

alaskamiller3• 14 years ago

But everyone invested in my blog, that's how you know it's fair!

ojbyrne• 14 years ago

It also feels like a thinly disguised way to send traffic to NSFW Corp.

antidaily• 14 years ago

Yeah, there's a lot of bullshit in this article.

draftable• 14 years ago

"Has anyone under 30 ever bid on something on eBay?"

What a load of shit. I'm 25, and I use ebay all the time.

Sure, you can make the argument that Etsy and Amazon are taking business away from eBay. But suggesting that they have replaced eBay as a platform is ridiculous. This is also a very USA-centric view to take. I'm from Australia, so using Amazon is a pain due to manufacturer export restrictions, and the often prohibitively expensive shipping costs. So in many cases eBay is a better alternative. And as for Etsy, it serves a niche. If you want to set up an online store to sell kitschy homemade toot, knock yourself out and use Etsy. But if I want to sell some of my second hand stuff, eBay is what I'm using.

tomflack• 14 years ago

For a company run by Sarah Lacey (who takes pride in having a Chinese presence) Pando Daily is a shockingly north American centric publication.

I also get the sense they want to be the first to say something is happening rather than could happen, at the expense of accuracy.

jacques_chester8• 14 years ago

Australia is partly to blame for its own woes there -- Amazon have said in the past that they won't set up a .au subsidiary while there are parallel import restrictions on books.

All hail the luvvies, who made all books more expensive for all Australians, so they could protect a handful of novelists, playwrights and poets.

damian20002• 14 years ago

Explain how there's parallel import restrictions on books here? Last I heard there isn't any. I thought the only reason Amazon & co don't setup shop here is that its cheaper for them to ship books direct from the UK than pay Aussie-level wages.

brimanning• 14 years ago

You, being merely a single example of an individual who does not fit her statement, does not invalidate her point that it's a marketplace that an older demographic audience uses.

If she (and you) could demonstrate that as being true (or false) with research and statistics, then she (and you) would have a leg to stand on.

DanBC• 14 years ago

Draftable isn't getting paid to peddle anecdotes though.

bobsy• 14 years ago

Most of my friends and younger brothers friends have used eBay to sell second hand stuff and buy tickets for various events. I have never heard of Etsy.

I am not a great fan of ebay but if you want to shift something second hand its pretty effective.

A handful of people do not make a trend. However, I feel the comment on eBay being abandoned by under-30's is one of those statements made by someone living in a tech bubble and not in the real world.

eBay isn't hip or cool. That said when you want a good price for something, whether buying or selling doesn't matter. You want a good price and you don't want to get conned. eBay nails both of these.

john_flintstone• 14 years ago

I stopped using eBay 6 years ago, and for 5 years before that I used it every week, for buying and selling. eBay is fast becoming irrelevant. And I'm not in the US either.

batista2• 14 years ago

>I stopped using eBay 6 years ago, and for 5 years before that I used it every week, for buying and selling. eBay is fast becoming irrelevant. And I'm not in the US either.

What part makes the above statements not anecdotal?

ars• 14 years ago

Personally I think it's time for ebay to get rid of listing fees and MASSIVELY increase it's listings.

These days I go to amazon first for used stuff since people can list there with no fees, so I get better deals.

The only place where ebay wins is one of a kinds since amazon will only sell items with SKU's or part numbers.

robryan• 14 years ago

As far as I am aware Amazon is taking a larger percentage of the end sale, so could in fact cost more than eBay for businesses depending on how many products you are listing and how many are actually selling.

gergles• 14 years ago

The reason listing fees exist is to reduce the amount of dumped crap onto eBay. Besides, for individual sellers, listing fees are basically gone (or de minimis) anyway. There's a perpetual 'promotion' for your first N listings a month to be free of listing fees.

wahnfrieden• 14 years ago

Interesting how Yahoo Japan got away with having no listing fee. And continue to be successful with it. Cultural? Or just precedence since dominating the market there?

bretthopper2• 14 years ago

I'm going to ignore all of this article except for:

"The first step was Canada, where Stripe has just gone live. It’s actively working on Western Europe too."

This isn't even true is it? There's no mention of this on their site/blog. Nothing on Google. Their Twitter feed even recently replied to someone saying it isn't in Canada.

marekmroz• 14 years ago

It is in a private beta in Canada as of last weekend. You can ask them for an invite.

bretthopper2• 14 years ago

Awesome! "just gone live" is a bit misleading then.

jacques_chester8• 14 years ago

If you're based in the USA, if your business is largely with Americans and conducted exclusively in USD, then: yes. You're in luck.

What's that? You're one of the 6.7 billion people who don't live in the USA? You want to conduct business in more than one currency? You're not an American company?

Then guess what: you're still stuck with PayPal.

Nobody seems to get that PayPal's killer feature is not its userbase. It's that it's everywhere and has multi-currency support.

I would very much like to use Stripe or Braintree or whoever there is who doesn't resemble the truly and sincerely Kafkaesque[1] experience of dealing with PayPal. But until I, as an Australian, can do business with foreigners in their currency then Stripe and the like are basically useless to me.

All I can do is lick the windows.

[1]: I'm semi-serious. Read The Trial and tell me it wasn't written about having a PayPal account frozen.

froo• 14 years ago

When you consider that estimated North American internet usage makes up less than 20% of total internet usage[1], I don't think PayPal has anything to worry about for a long time.

They are the almost defacto standard for personal payments online will keep them in the top spot for a long time due to network effects. Without a serious shift in usage, its hard to see that changing any time soon.

As an anecdote, my grandmother passed away last week. Her 86 year old sister back in Germany asked us if we had PayPal this week so she could send flowers for her funeral. It may not be a "hot" company in the US, but its still highly relevant to the vast majority of internet users, even ones that are only just venturing onto the web.

[1] I don't know the actual number as everywhere I've looked suggests between 13% and 15%. I figure less than 20% is a safe bet.

ChrisNorstrom2• 14 years ago

"PayPal has [nothing] to worry about for a long time."

I'd be careful, sometimes these articles are alarmist and over-reacting but a lot of times they predict the downfall of companies years ahead of their demise. Digg, Palm, Kodak, Yahoo, etc... A lot of these companies all display similar patterns right before things start to get bad for them. They stop innovating, they start getting surrounded by competitors, they get too comfortable thinking they're "too big to fail" and have the "network effect".

Look at Palm alone, it was a leader in PDAs and in a few short years it was gone. The internet and technology are changing at extremely fast speeds. One year you're safe, the next year a competitor has taken your market share. It all happens so fast now. Easier to start, easier to implement, easier to set up, and little by little it's no longer hard for your client to switch payment systems.

chewxy• 14 years ago

http://pin.net.au

You're welcome.

jacques_chester8• 14 years ago

Thanks. I saw them when it was first discussed and immediately requested an invite.

Unfortunately it still means that I am missing out on dealing with 6.698 billion people in their own currency instead of 6.700 billion.

chubs2• 14 years ago

I seriously can not wait until they either leave beta, or stripe comes to australia. The race is on!

InclinedPlane2• 14 years ago

If you think that the primary problem in payments is technical, maintaining data integrity while bits get shuffled around, then you tend to expect that things like user base, convenience, user experience, aesthetics, etc. will have a big impact on the rising or falling popularity of any particular payment service.

If, on the other hand, you think that the technical problems are just the foundation and the big problems are actually things like regulatory compliance, fraud reduction, reducing cost of payments, and maintaining strong relationships with processors, governments, and banks then the landscape looks a hell of a lot different.

Paypal has already tackled the easy problems, and has been tackling the harder problems a lot better than any of the competition, with the very significant exception of customer service. If you want to trade money between any two individuals on the planet paypal is by far the most likely solution to the problem aside from air mailing gold coins. And paypal spends a hell of a lot more effort on things like detecting and mitigating fraud (and money laundering, and phishing, and so on) and expanding into more countries than most of its competitors. That's why they're still on top.

jacques_chester8• 14 years ago

Well ... yes. I never thought the problems were purely technical.

That doesn't change my simple reality: the only game in town for me, right now, is PayPal.

And boy do they know it.

gurkendoktor• 14 years ago

> Then guess what: you're still stuck with PayPal.

Another thing is that PayPal works without a credit card in most cases, it can directly withdraw from my bank account.

IsTom• 14 years ago

Exactly. I don't have a credit card, because direct transfers are much more popular here (Poland). Amazon won't accept my debit card nor a direct transfer, that kept me from buying there.

rickmb• 14 years ago

Funny enough, I came here to argue more or less the opposite.

In many countries, the standard payment problems have been largely solved locally, at least for the local markets. In the Netherlands, a wide selection of payment providers will give you the ability to receive payment through virtually any method.

Merchant accounts are easy to get, and the most popular local form of payment, iDeal (direct "my bank to your bank" payment), is supported by all banks and can be easily implemented without the need for any payment provider. The vast majority of all only transactions in NL go through iDeal.

Most payment providers also offer multi-currency support, but it's only a very small part of the market that needs that. The use of PayPal is very rare and becoming rarer by the day. It's about as old school as seeing a "made for Netscape" button on a website.

There's only one area where PayPal is easier and more accessible, and that is very low budget private stuff like donations on a small software project. But given the constant horror stories about PayPal, any solution that targets that market effectively will wipe PayPal away in a matter of months. And then PayPal will be history in the Netherlands.

mdemare• 14 years ago

< In many countries, the standard payment problems have been largely solved locally, at least for the local markets. In the Netherlands, a wide selection of payment providers will give you the ability to receive payment through virtually any method.

Is it really? Sometimes I feel the Netherlands is the only country where it's been solved. Who of you live in a country with a satisfying, cheap, standard local payment provider?

batista2• 14 years ago

>Funny enough, I came here to argue more or less the opposite. In many countries, the standard payment problems have been largely solved locally, at least for the local markets.

Well, the same is true for the US --there are worthy PayPal killers there. But it doesn't matter much in a global era. If you want to be able to accept payments from and to everywhere, PayPal is the only game in town.

For an internet business that is not a pizza delivery or a local florist, the Netherlands only solution you describe is a non starter.

jasonwatkinspdx2• 14 years ago

Stripe is quickly adding countries. Have some patience before you copy and paste your rant again.

tluyben2• 14 years ago

https://answers.stripe.com/topics/international

Are they?

rsanchez1• 14 years ago

"Has anyone under 30 ever bid on something on eBay?"

I'm under 30, and I just won two auctions in the past week, bidding on many more to buy at the lowest price.

Really, we're posting articles from Pando? And it's from Sarah Lacey to boot. This article can't be anything but accurate. Oh, hold on, never mind...

spoiledtechie• 14 years ago

100% agree. The poster just wasn't thinking. But nor was the Author. I just bought 6 Computer Parts on Ebay! I am only 28. The Computer parts were by far the cheapest place to buy them and they worked 100% out of the box. I saved nearly $1,000 by buying them on Ebay.

Brand New goes to Amazon and Sometimes Ebay. But Second Hand items, I always hit up Ebay.

koala_advert• 14 years ago

I'm 20 and use it all the time. Don't people buy used things anymore?

chubs2• 14 years ago

Not in my experience. I can't sell any of my used stuff on ebay these days, however years ago it used to be great. These days i basically have to throw stuff out! Things i've tried to move: speakers, leather jackets, fridges- nobody wants it on ebay any more. It's just a buy-it-now-opolis these days.

zs11• 14 years ago

Wow, that's a shockingly bad article, even from Sarah Lacy's standards. Here's a summary:

"Here's a list of PayPal's fringe competitors" -> PayPal is VERY screwed

"Ex-PayPal co-founder says bad things about PayPal, while investing in a small competitor" -> PayPal is VERY screwed

"Young startup has a better user experience compared to 10-year old behemoth" -> PayPal is VERY screwed.

Sure, some of Lacy's Valley friends are making (or investing in) interesting products in the payments space, but man, does she let her 'network' write all her articles or what.

nowarninglabel• 14 years ago

Yeah, let's just ignore all facts, such as actual financials, those don't matter when you're a tech reporter who likes to make things up out of thin air, right?

I dislike PayPal, but this is a terrible piece, and what is it, fluff for NSFW, Corp.?

nsns• 14 years ago

Completely agree. The most shockingly amusing part is in the second paragraph, where she uses the fact she has no financial proof as her financial proof...

sakopov• 14 years ago

PayPal is not going anywhere for the same reason Facebook is not going anywhere - over time both created a solid presence for non-technical users. No matter how cool squared looks i can guarantee you a typical paypal user won't care because what they have works good enough. It's the same reason G+ will never be more popular than facebook. For a typical user there is very little incentive to switch.

WadeF• 14 years ago

All I can think about when reading this is Betteridge's Law of Headlines.

See: http://news.ycombinator.com/item?id=4092880

octotoad• 14 years ago

This has to be one of the most invaluable filtering techniques I've learned to employ in the past year or so in regard to sites like HN.

It seems obvious in hindsight, but I'd never realised how many article headlines ending with a question mark naturally contained so much fluff.

I now instinctively answer the question with a 'no' and move on without reading any further.

chris_wot4• 14 years ago

Q: "Exactly how screwed is PayPal?"

A: "No"

zerostar07• 14 years ago

Hint: the hint is misleading

tomjen3• 14 years ago

Tripe fails at a very important point.

Paypal subscriptions are dead simple to cancel and there is no way to for the merchant to make any funny business, at all.

krautsourced• 14 years ago

"It may not be showing up in PayPal’s numbers yet. Indeed, by the time you start to see these things on the balance sheet, the damage is irreversible. The question is whether it can still be reversed now." So much Win in that small paragraph alone. So, the numbers are good, put you are not convinced... because why? Ah yes, the damage is irreversible - let's see how we can reverse the irreversible then, shall we? Mind, blown.

timedoctor• 14 years ago

I have two reports of people having their accounts frozen for 6 months at paypal for no apparent reason, no recourse and no explanation.

I also have severe problems paying with paypal. Why is it that I can pay on amazon, apple, expedia etc etc very easily, never have a problem, but when I try to enter my credit card on paypal they do not allow the payment?

And yes from personal experience braintree is a million times better than paypal.

Exactly How Screwed Is PayPal? (Hint: Very)

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