posted on May 2, 2003 11:31:23 AM new
For 3 years yisgood has pointed out the fatal flaws in PayPal explaining why it wouldn't work. He recommended PayPlace.com which folded, then he recommended ExchangePath.com which folded, then he recommended MoneyZap which closed its doors, there was Achex which turned into a joke, and then he pushed C2it which has turned into the walking dead.
Yisgood pointed out the folly of investing in PayPal's IPO in a lengthy analysis explaining how impossible it was for PayPal to ever turn a profit. As it turned out it yielded a tidy profit for those that didn't follow his advice.
After 3 years of PayPal steadily increasing it's market and buring the competition I think it's time to recognize you might not be all the financial guru you think you are.
Did anyone look over eBay's 1Q-03 report? PayPal payment volume is 80% greater than it was 1Q-02, that's an impressive number.
posted on May 2, 2003 01:47:36 PM new
Hi, the service yisgood is recommending is PayQuake. The chargeback fee I was quoted in the contract was $25.00 - your experience may vary, but I would think there is some consistency regarding fees across different applicants.
posted on May 2, 2003 02:08:34 PM new
25 is standard,it should be same for every one who uses that service.paypal is only 10.
some can go as high as 50
posted on May 2, 2003 02:25:38 PM new
>>"fool the gullible into thinking they are safe"
LOL, and this is exclusive to Paypal?<<
No, it isn't, but that doesn't make it right.
>>For 3 years yisgood has pointed out the fatal flaws in PayPal explaining why it wouldn't work. He recommended PayPlace.com which folded, then he recommended ExchangePath.com which folded, then he recommended MoneyZap which closed its doors, there was Achex which turned into a joke, and then he pushed C2it which has turned into the walking dead. <<
First, long before they folder, I was warning people that the end was near. There was also a time I was recommending Paypal. But as a trend started to become clear, I changed my mind. Unlike some folks who have the attitude of "my mind is made up, don't confuse me with the facts." Second, we have a pretty clear map showing that there is not a whole lot of profit in payment services. All the more reason to be wary of Paypal.
>>Yisgood pointed out the folly of investing in PayPal's IPO in a lengthy analysis explaining how impossible it was for PayPal to ever turn a profit. As it turned out it yielded a tidy profit for those that didn't follow his advice. <<
One the the big analysts that everyone was quoting was David Menlow. I sent him my analysis and asked him where I was wrong. His reply was "I said it was a good IPO, not that they will stay around for the long haul." He did not challenge my numbers. Neither did you.
Paypal was $270 MILLION dollars in the red when the IPO was issued. 80% of their accounts are personal. So they are charging 2.9% on 20% of their volume. They pay about 1.5% for the credit card processing, then there is the overhead of running the business. What overall percentage of profit are they making? 1%? How many BILLIONS will it take to cover the 270 MILLION in red ink? Under ebay, they are going out of the adult business and online gambling. This was a significant portion of their business. They are still facing lawsuits from individuals and from government agencies claiming they violated laws. On paper they are showing a profit. On paper, Enron was worth billions. I think Paypal is a ponzi scheme. They are only able to meet their bills today because of the money people have paid in for items they have purchased. They are paying Monday's bills with Wednesday's payments. Eventually they will reach the saturation point where there will be few new accounts and a whole bunch of payments coming due.
A profit is only a profit when it's in your bank account, not on paper. I had a friend who owned lots of Yahoo stock when it was $400 a share. I kept telling him to unload. He kept laughing and saying, "Is your company worth $400 a share?" What's Yahoo worth today?
By the way, I never claimed to be any kind of guru, financial or otherwise and my portfolio shows it. But while I never picked a stock that jumped to a million dollars, I didn't lose a million either. My opinion is worth what you paid for it. If you don't like it, I'll gladly give you a refund.
posted on May 2, 2003 06:49:54 PM newyisgood I think Paypal is a ponzi scheme. They are only able to meet their bills today because of the money people have paid in for items they have purchased. They are paying Monday's bills with Wednesday's payments. Eventually they will reach the saturation point where there will be few new accounts and a whole bunch of payments coming due.
yeah, right. Thanks for typing that, it lets those unfamiliar with your 3 year crusade against PayPal see just how you think. It's rather evident to most by now that what you "think" and what is aren't the same thing.
I've been around on AW longer than you and I've never seen you do anything but stand on a fragile soapbox and tell about the evils of PayPal and it's days are numbered. Then you follow that up telling about the virtues of some new service that goes belly up. I think long time board member with a good memory have seen the same thing I've seen. They just have a bit more class than I and don't throw your track record back in your face like I've done.
posted on May 2, 2003 07:51:58 PM new80% of their accounts are personal. So they are charging 2.9% on 20% of their volume.
Are you forgetting that you need a paypal account to send money? I bet 75% of the personal accounts never receive payments. And if they do there is no credit card fee for paypal. Also, paypal charges the same fee even if the money does NOT come from a credit card.
I don't believe that they pay 1.5% either. A fairly small company can get a rate close to that.
My sister-in-law uses this: http://merchantaccount.quickbooks.com/j/mas/signup
posted on May 2, 2003 08:01:25 PM new
I have to admit, I didn't know what a ponzi scheme is. So, for those curious, its an interesting story about the famous person the ponzi scheme was named after.
posted on May 3, 2003 08:03:49 PM new
Notice how when paypal cheerleaders run out explanations, they turn to personal attacks. I have yet to see anyone explain how paypal is making money. First we had the ridiculous explanation that they would be free because they made money on the float. That has long been debunked. Now I point out using some real numbers that it would take them something like 20 BILLION dollars in transactions just to cover their red ink and all I get is more personal attacks. Since none of the analysts who were touting the Paypal IPO were able to explain how they expect to make money, maybe one of the cheerleaders can explain it?
Last quarter Paypal announced that they processed a billion dollars and made 48 million dollars in fees. First, how did they make 4.8% when they don't even charge that much and second, this still means several years before they show a profit and does not even take into account their costs. All this assumes paypal's numbers are accurate and we have all seen a big disparity between what they claim and how things turn out.
A recent article showed that ebay's predictions are just as accurate. In order to get the growth they project, something like 480 MILLION people have to spend an average of close to $200 in one year. Do you think that's possible? If so, I can probably find some Enron stock to sell you. Maybe they'll make a comeback.
posted on May 3, 2003 08:34:10 PM new
>>Paypal = ponzi scheme? umm, no.<<
Sorry, I did NOT mean to imply that Paypal was started by crooks or for fraudulent purposes. I believe the folks who started Paypal had all the right intentions. It fills a definite need. At the time, there were very few ways to send electronic payments between individuals and most of them cost about 5%. But I think they were naive. I think they expected more income and less outlay. I don't think they expected that 3 years later, 80% of their accounts would be personal. I don't think they expected the lawsuits, the harrassment by government agencies, the fraud.
When you read anything they have written, like their ever-changing terms or their IPO prospectus, you see things like "We thought this" and "we don't expect that" but "it is possible that." "It is possible that we will have to shut down online gambling" (they did), "it is possible that we will require banking licenses" (they do). They believed that anything they stuck in their terms would remain unchallenged until the court showed them otherwise.
Now they have been taken over by ebay and we all know the ebay plan. Just keep raising rates and making the users pay until the stockholders are happy. I predict that rates will go up and that at some point there will be no free receiving of payments.
As for the ponzi scheme comment, I believe that they are behind, using Monday's payment to cover Sunday's costs. As long as the amount of payments keep rising, they can keep making their bills. But if they reach the point where payments stagnate (which has to happen sometime), it will start taking longer and longer to process them because they will have to hold on to them longer. Or they will issue more stock and dilute the shares to raise money. In that sense, it is a ponzi scheme.
posted on May 3, 2003 08:40:05 PM new
I don't have time to read all the comments made, but I will jump in with one quick comment.
I LOVE PAYPAL!
90% of my bidders to too. It is much easier for me to handle these transactions than it is to handle the checks. And, I just added fifty cents handling to all orders to cover the expense.
Now, whether or not they are making money is totally irrelevant to me. I make money using them. And, I only bid on auctions that use them!
I have not had a chargeback and have used them since almost day one. I do sell low-end items, so If I did have a chargeback it would be under $20 and I could afford that without worrying about it. But, since I offer a 100% guarantee (which I have also never had to refund) I don't worry about all this small stuff.
I ship to work addresses but I did stop all International bidders (again). This time for good. The last 3 I have had did not pay and it is just not worth the hassle.
That said, you can count me as a Paypal cheerleader. I love them as a bidder and a seller and I hope they are around a very very long time.
posted on May 3, 2003 10:06:06 PM newyisgood Last quarter Paypal announced that they processed a billion dollars and made 48 million dollars in fees.
??? where do you get your numbers?
Last quarter PayPal processed $2.63 billion dollars and posted a revenue of $93.2 million.
yisgood I predict...
Yes you do gaze into that crystal ball of yours and make a lot of predictions. You predicted that PayPlace would surpass PayPal, they folded, you predicted ExchangePath would surpass PayPal, they folded, you predicted MoneyZap would surpassed PayPal, they dropped out, you predicted C2it would surpass PayPal, missed again. You predicted banks would refuse to do business with PayPal, wrong again. You predicted that MasterCard wouldn't allow PayPal to accept there cards, again you stuck out. You predicted that eBay would ban PayPal from being used, missed that one too. You predicted that PayPal's IPO would be a total bust, missed the prediction that time too. Even a blind squirrel finds an acorn sometimes, but you aren't as lucky. I'm going to make a prediction now, I don't see you replacing Nostradamus anytime soon.
yisgood As for the ponzi scheme comment, I believe that they are behind, using Monday's payment to cover Sunday's costs. As long as the amount of payments keep rising, they can keep making their bills.
I just love when you spout off that sort of nonsense, it makes it so much easier for the new folks to witness how your brain works.
posted on May 3, 2003 10:18:42 PM new
There is a lot of money to be made from payments sent directly from your Paypal to another Paypal without involving any of the bank or credit card institutions. My guess is that is a giant revenue channel, along with "Buyer Protection". We know that's a giant money maker for computer and electronics category. I don't find to conceive Paypal turning a profit under those two revenue streams.
[ edited by sun818 on May 3, 2003 10:22 PM ]
posted on May 4, 2003 06:16:02 AM new
some of the comments yisgood made on paypal is passe,paypal is doing very well,and have more premier and business accounts than personal accounts.
to get 480 million users to spend 200 dollars a year on ebay??
in the go go days of dot com boom,ebay bidders spent an average of a few hundred to a few thousand dollars every month.
the average winning bid amount has declined considerably but the number of bidders go up ,480 million users spending 200 dollars is not a lofty goal.
the concern here which bother many sellers on ebay is that sellers are not making a decent return on their time and money.
instead of bashing paypal or any online services,why dont we discuss how we can improve our profitability??
posted on May 4, 2003 07:08:50 AM new
I don't have time to read all the comments here...I have a love/hate relationship with PayPal..their Customer Service is virtually non-existent but I do like the ease of PP as a seller and insist on it as a buyer.
One thing about PP's bottom line is that you can't even arrive at the fees they receive based on gross $ volume...most of the items I sell (and that was 3,000+ last year) are under $10..the transaction fee i am charged often amounts to 10% of the winning bid amount....I would venture to guess that LOTS of the PP transactions involve similar fees %'s.
yeah, right. Thanks for typing that, it lets those unfamiliar with your 3 year crusade against PayPal see just how you think. It's rather evident to most by now that what you "think" and what is aren't the same thing.