Dear Paypal, are you becoming an (even bigger) bully?
Approaching $7 billion in yearly revenue, and 150 million active accounts, the San Jose based money transfer service PayPal has become a significant force in the payments space. PayPal alone represents nearly have of all eBay's yearly revenue, supporting payments in 26 currencies.
As it's growing bigger, I've observed PayPal is becoming 2 things, neither of them very good:
a) Slow and bureaucratic. Have you ever tried to contact them and get an issue resolved? Good luck if call on the phone, wait times are typically 30 min minimum to several hours. And they will make you jump through hoops for everything, getting to the point it feels worse than a bank.
b) A bigger and bigger bully. I will mention 3 instances of what I consider "bully" behavior I have experienced myself
1) I felt PayPal started turning overly aggressive a couple of years back. All of a sudden, PayPal decided to arbitrarily start holding funds received for certain transactions for up to 90 days. I couldn't believe it when my own funds were put on hold as I was trying to transfer a few dollars from simple low-value occasional transactions I had completed on eBay. Then, it continued to cut off useful features such as the ability to use pre-paid cards - which was quite useful (I hate leaving a few dollars left on one, and forgetting about it). I realize what's behind it - an uphill battle to control fraud and contain money laundering and other illegal activities. It must be really bad behind the scenes because some of PayPal's moves feel like knee jerk reactions, and desperate at times.
2) More recently, and with no prior warning of any kind, it decided it would stop my recurring monthly payments - for example, to Spotify - unless I entered a credit card on their system as a backup payment. Never mind that I had a perfectly fine checking account on record that has never, not once, failed, and which has been designated as my primary form of payment for more than 7 years. But that wasn't enough. After I entered the card, PayPal, with no warning for a second time, stopped my recurring payments again because it decided it did not want my checking account as a primary payment mechanism anymore. It wanted payments to go on my credit card instead. It disrupted several of my services with this stunt. The part I resent the most is the lack of transparency, and communication, and the strong armed tactics - why would you put a stop to payments from a long term customer in order to force me to shift payment from a checking account to a credit card. Did you ask me? No. Did I approve of it? No. Did you give me any options? No.
3) Just this week, I tried to complete a transaction that required sending funds to an European Union merchant from the US. Well, PayPal decided it would not let me do that. I got a message that said I cannot make a payment to an European merchant from the US. No further explanation, it just said I could not do it. And it was to a prominent up-and-coming mainstream merchant, listed on crunchbase. In the world of bitcoin, PayPal won't let me pay for a transaction overseas...
I have a feeling I may not be alone in these observations. Just a year ago, PayPal refused to pay the reward offered in its Bug Bounty program because the winner was "too young", he was 17. Then last August, Ouya and others had a ton of trouble getting their money transferred out of PayPal after raising it via crowdsourcing on Kickstarter.
I hope PayPal reconsiders its approach, and acts in a more consumer-friendly way going forward. Competition in this space continues to heat up, with a number of players gaining traction from different angles - Google Wallet, Skrill, Cover, Square, WOWPoints, Paymate and others, and they may give PayPal a run for their money.
PS: I just updated to your latest app. Why did you default your app to take me to PayPal Local when I launch it, burring the regular account features which is what most of us are interested in. Here we go again, forcing things down our throats one more time.
