Visa Taking Aim at PayPal?http://blogs.wsj.com/deals/2011/03/16/visa-taking-aim-at-paypal-venmo/Draft Media Release re PayPal
“It is with great sadness that eBay’s Chief Headless Turkey, John Queeg-Donahoe, announces the probable eventual demise of eBay’s most ugly daughter, PayPal. Donahoe says that PayPal is likely to be stricken by particularly virulent strains of Visa/Mastercard P2P, and these afflictions are greatly aggravated by PayPal’s insurmountable lack of direct financial institutions support and a great deal of PayPal merchant dissatisfaction, particularly with respect to PayPal’s grossly unfair, “all responsibility avoiding” user agreement, primitive risk management processes, and grossly unprofessional, buyer-biased and fraud-facilitating (indeed, apparently non existent) transactions mediation, to name just a few of the problems that PayPal merchants have to endure.
“Donahoe says that PayPal’s health may therefore be expected to deteriorate and, if ultimately not completely incapacitated, will most likely be eventually confined to its mandatory offering on what little there will be, by then, left of the Donahoe-devastated eBay marketplaces. There is no cure for this condition and the “eBafia Don” is particularly saddened by the inevitable presumption that it is unlikely that PayPal will be able to continue to underpin eBay’s sagging bottom line too far into the future.”
Yes, it’s a send-up but, still, it accurately describes PayPal’s unregulated, most unprofessional and “clunky” operation. Had the developers of the original “bankcard” concept ever behaved the way PayPal behaves, towards its payees in particular, credit/debit cards would never have gotten off the ground, and we would still be paying for all our purchases with bits of paper and little metal discs.
PayPal is not a “bank”, and is not prudentially regulated as are the banks. PayPal has been forced down the throats of eBay merchants, much to their distaste. Without eBay’s mandating the use of PayPal it would be nothing and, regardless, it still is the most unprofessional, unscrupulous, incompetent, wire fraud-facilitating payments processor on the planet.
All the payments processors that do not have the direct underlying risk-managing and real transaction-mediation support of the financial institutions (the “banks”) that are ultimately involved at either end of the transaction—as does the likes of Visa/Mastercard—suffer all the same handicaps that PayPal suffers. The “banks” may be disliked by some but they at least supply a “professional” payments processing service.
Undoubtedly, if and when the banks decide they want to take on the greater risk involved with such payments processing as PayPal offers, and they offer a like simple, but more “professional”, online system, PayPal will quickly disappear into the history books.
Enron / eBay / PayPal / Donahoe: Dead Men Walking.
What, another 10,000 word rant? And this article probably only applies to the US also, but some of you guys apparently have not yet tumbled to the fact that the US is where all the action, good and bad, usually starts …
