[michaelt]

  Specifically, what's stopping a competitor
  from eating Paypal's lunch right now?

Perhaps being a payment processor is actually difficult, and Paypal is doing a tolerably good job?

I only hear people bitching about their paypal account being locked once or twice a year, whereas I assume paypal deal with hundreds of attempts at credit card fraud, chargebacks, complaints about ebay goods and suchlike every day.

[justtopost]

Oh, they deal with it. But always on terms favorible to them. I sold off inventory to my old CoLo and they froze all my funds for 6 months until lawyers got called, and somehow their fraud investigation magically vanished. They are no better than mafia.