Just came across this news bit. About PayPal.

Instresting read.

http://www.salon.com/tech/wire/2002/02/12/paypal/index.html


"If state regulators determine PayPal has been running an illegal banking business, the company could face substantial fines dating back to when the service began with 24 users in October 1999. The service had ballooned to 12.8 million accountholders as of Dec. 31."


Time to get some popcorn.
:cartman:

It will prove interesting for sure. Would be a shame to see them go under though.. it was (and still is) a great idea for getting money around the world.

Greg Moore

I hope they get their problems worked out...
Ive used Paypal for quite awhile now with no complaints about their service.
We added it by request for clients wishing to pay for hosting through paypal.....butttttt I have to admit I use it for purchasing
online and it works quite well. :)
and I for one would **miss** the service :bawling:

The service seems to be fine. It's just a bit of a question of the legality of their service I think. I'd still like to know why regulators turned a blind eye to it for so long...

Greg Moore

So what does this mean, that we should keep as little money as possible in our PayPal accounts? What if they shut down, will all money go lost?

I kind of hate to hear that because like Martie and Greg I use and like the service. I did notice in that article that PayPal is liscensed in my state (West Virginia), but that wouldn't help much if I couldn't trade with people in other states. LOL :)

Originally posted by Mr. Amazon
So what does this mean, that we should keep as little money as possible in our PayPal accounts? What if they shut down, will all money go lost?

I would be very careful as you could lose any money you have in your account if something would make them close their doors. This is actually part of the problem because PayPal is not an official Banking facility however they are acting as one without the things like FDIC and other protections that come with a normal bank.

Originally posted by Mr. Amazon
So what does this mean, that we should keep as little money as possible in our PayPal accounts? What if they shut down, will all money go lost?

Well I do that anyway. It's not related to the hosting business that I use it - just for personal stuff and some webdesign (so the numbers are fairly high when it comes in). Soon as I get the 'You're Got Cash!" e-mail I go in and transfer it to my bank right away - better safe than sorry

Greg Moore

I would also be very sad to see paypal go under as at the moment they are my cheapest option for accepting card payments but i keep very little money in there as soon as i am paid i transfer it to my bank account

Update on this story...seems things just keep getting worst for paypal.


"Less than a week after its blockbuster debut on the Nasdaq stock exchange, online payment firm PayPal has been hit with a class-action suit charging it with improperly administering users accounts and poor customer service."

http://www.msnbc.com/news/712822.asp?cp1=1



I told you guys to get out the popcorn ;)

I saw something about this on CyberCrime on TechTV.. It's just a case of them growing too fast, they origionally had like 3 tech supports, then immediately expanded to like 500 or something and couldn't keep up with everything.

Let's get a few things clear, here:

-Louisiana isn't exactly a 'high tech' state to begin with. One example: I believe they're the only state in the union that doesn't have 'counties'. It's pathetic.

-State regulators can REGULATE all they want, but it's the people that make up the state that actually decide (in the end) how to use their money.

-If they shutdown Paypal (assuming they can), they'd also have to shutdown just about any merchant gateway, money transfer mechanism (think 'Yahoo money transfer'), billpay mechansim (think 'Yahoo billpay', and others), and other online tools because they also don't have a 'money transmission license' (Sheesh, they'll try to regulate anything).

-Dan

Caged, your way off in left field with those comments..

High Tech state or not, all it takes is one or two places to say "no" and then everybody else get up the balls to do, or begin to do the same.

Secondly, while the regulators can regulate the people elected them to regulate, so to repeal any decisions would take a good long while considering the current governing bodies would have to be replaced etc, however, you obviously did not read the entire story behind this or you would have known that Louisiana told paypal that they needed a license to conduct the type of business that they were conducting in the state of Louisiana thus pay pal suspended operations there and started the paperwork for the appropriate liscenses.

Third, paypal is extremely different from bill payment systems, if paypal was a way to simply take money from one bank account or credit card and place it into another bank account that would be fine, that’s more or less a passthrou or the same thing that ebays bill point does. However, paypal has chosen to allow the users to keep their funds online, with paypal, with basically no federal insurance what so ever, so if paypal ever does file chapter 11 everyone can effectively kiss their $ goodbye, where-as if in a similar event a bank were to do so, the FDIC would step in and take care of it, although I admit I don't have a large working knowledge of the FDIC or higher up banking organizations.

So in short, paypal allowing you to store your $ online, transmit it, send you a check for the $ in your account etc, basically makes them a very unsafe bank without any banking rules and regulations.

I have always said and will continue to say, PAYPAL is not a bank!

But others argue with me and would say that Westernunion is not a bank either. :rolleyes:

-Louisiana isn't exactly a 'high tech' state to begin with. One example: I believe they're the only state in the union that doesn't have 'counties'. It's pathetic.

What the heck does having parishes as opposed to having counties have to do with being high tech???

I miss the food. I want a mufalatta :bawling:

Richard