posted on September 27, 2001 02:05:39 PM new
Hi, I have read several posts that have been made on here in regards to PayPal, and of course PayPal's Damon has been ready with a corporate canned answer for you all. First of all PayPal is not a chartered bank of any sort. So they have hegged the law on that count. Yes the operate within the parameters of the law. But come on, lets get real... when you are processing millions upon millions of dollars a day you are in essence acting as a financial instution. Even a small bank in a rual town has to be chartered, unlike paypal.
Second PayPal claims to have each account insured up to 100,000 which is all well and good, but the terms and conditions as well as due process do not apply to PayPal as a corporate entity.
Third, If you people, and if Damon believes for a single second that PayPal is not playing with your money in some sort of inverstment you are sadly mistaken. Let me put it to you this way, American Express which is a highly reputable and highly regarded company makes virtually nothing on issuing "the card" what they have done since the 70's is buy and sell currency on a large scale, and they are highly sucessful at it. The whole concept is brillant, they give customers an excellent product with unparreled service and they make money by the flow of money. Many other companies do this as well. I highly suspect that PayPal is playing with your money or Secured Letters of Credit or standard Letters of Credit based on deposits that they have, ie making money on the flow of money.
Here is what really troubles me about PayPal, if indeed they are making money on the international markets then why the hassle for the end users? Is the money so heavily leveraged that they have to squeeze every cent out of a dollar? Or have they made poor investments and are they kiteing the money? It is certainly food for thought. Banks have to answer to the FEDERAL RESERVE and to congressional comitees etc, PayPal answers to no one, not even to its customers as it seems. From an academic standpoint this is highly disturbing.
Everything I have said here is purely my opinion, I am not aware of the inner workings of the paypal corporation. I in no way intend to Slander or Libel the corporation. All I am doing is making an observation as possible reasons why they act in the manner they do.
However I do have a deep insight into the finance industry, so I guess I can look at the matter from the perspective of a fianceer.
This is the same information I posted in the forums earlier about our user agreement, which will affirm the fact that we do not use customer funds. PayPal is a payment service, not a bank.
PayPal is strengthening its User Agreement to clarify that, if you carry a
balance in your PayPal account, you continue to be the owner of those funds,
and PayPal will act as your agent to move those funds according to your
instructions. This is different than a banking service, where once you
place your money in a bank account, the bank is free to use those funds as
it chooses. Under the new User Agreement, PayPal is legally bound to place
your funds only in an FDIC-insured bank or in a highly-rated liquid security
until you decide to spend or withdraw the funds. As part of this
commitment, PayPal will also continue its practice of holding your money
entirely separate from its general corporate funds, and legally commits not
to make your funds available to its creditors.
We have made this clarification at the request of our customers and based on
legal advice, not out of any problems with our financial condition. Thanks
to the participation of you and our more than 10 million other customers,
our financial condition is strong. We work hard to keep it that way by
improving our service with new features that our customers request, like our
new Shop Anywhere feature.
posted on September 27, 2001 04:26:12 PM new
Ok, so PayPal deposits funds either collectively or in individiual accounts on the customers behalf. The issue of securing financial instruments based on these accounts is a null point, they have the right under the law to do so. So I shall put that issue to bed. However PayPal acting as a "payment service" actively blocks as well as taps the accounts of its customers thus blocking funds without probable cause. Almost begs the question, will their next draft of terms of service have you signing away other rights or will you just draft a durable all purpose power of attorney for your customers. I appologise for the caustic tone of this message, but I need to review the terms expressed in your agreement.
posted on September 29, 2001 04:35:10 AM new
Damon, reversals of fortune happen in the blink of an eye in business, Remember Packard Bell was the Largest selling computer in the country...TSR Wireless was the fastest growing wireless provider... And Apple for a few years actually HAD market share. My point, simple all these companies were either mismanaged, provided poor service, poor products and or most importantly lost touch with the customer and their needs. Even recently quepasa.com a company founded by a personal friend went down the toilet.
