Originally Posted by
rpenmanparker
I don't see the problem. Their fees are no higher than credit card fees. Just as with credit cards the decision whether to bear the expense of the fees rests with the merchant.
Why do they need to be a bank? Why do they need to be insured? They aren't holding my money. If I have a balance, I take it out immediately. But most importantly, do you know of an alternative service that allows small merchants to accept secure, online payments in any currency without resorting to a credit card acceptance structure. How would we be better off without PayPal?
Fees are neither here nor there - I have no problem with fees.
They actively encourage users to hold a balance - you may not, but others do, likely believing that it's as safe as being in their bank account, which it's not.
Also, that they have not held your funds doesn't mean that it doesn't happen all the time - it does and it's not something that they're licensed to do; I mentioned Western Union because Paypal has the same licensing - they can transmit funds, nothing else. Withholding funds, returning funds, seller/customer arbitration, etc - none of that is within their authority.
"How would we be off...?" Again, you confuse your personal experience with that of everyone. Many have been burned by Paypal; that you haven't experienced the short end of the stick doesn't mean that it's all hunky dory.