[londons_explore]

It amazes me that despite not really modifying the core PayPal service for 10+ years, they are still a market leader.

Parts of their business don't have much network effect, and competitors could totally rebuild the tech and eat away at the market share... Yet somehow that hasn't happened.

[saurik]

As someone who was using PayPal during all of the 2010s, they actually changed a lot. It is also worth noting that--until today, meaning they have lost he high ground and it arguably doesn't matter anymore as sane companies will chase the lowest price for a service that is a direct cut of revenue--they were always cheaper than Stripe (with bulk rates that kicked in sooner and micropayments pricing options), had a fully functional product (it was amazing how Stripe was getting people without offering auth/capture), and a safer mechanism for notification buffering. PayPal supported being a fully backend credit card processor in addition to their "express checkout" flow, and frankly did everything Stripe did better... except have complex documentation and no real help to do your integration. If anything I would claim that it was this documentation that bit them. (Hell: one chance they made was to build out an entire REST-API version of their service with OAuth and a bunch of other stuff in a direct attempt to compete with Stripe, but that wasn't actually the issue: they just look not cool and have documentation that felt daunting.)

[brnt]

All this, and all that other Silicon Valley financial infra, because direct bank tranfers are (presumably?) not known or difficult or impossible.

From my northwestern European perspective, it's weird this straightforward solution that we've had since, well, the fifties? is overlooked.

[ajkdhcb2]

Fraud. Hacked bank accounts. Chargebacks. The brutality of banking customer service. These are all good reasons. PayPal does have a dispute system for 'buyer/seller protection'.

[brnt]

You can only transfer to a number, you can't (easily) charge back already effectuated transfer, nor can you (with a consumer account) debit a number. All of these things are covered.

Buyer protection has rarely been something one needs. Some (many nowadays?) banks offer insurance for this.

[ajkdhcb2]

>Buyer protection has rarely been something one needs.

I disagree, I think it is the biggest factor. I used it several times and I know other people who have too.

>you can't (easily) charge back already effectuated transfer

I promise if you try to do something involving bank transfers without doing some form of 'Know Your Customer' you'll get people try to use bank accounts that are compromised in some way. You'll be getting calls from your bank and potentially lose money, and may get your bank account closed if you persist with that behavior

[brnt]

> I disagree, I think it is the biggest factor.

You probably think that because of the insecure nature of the alternatives you're familiar with. It simply doesn't occur that much, fraud, and when it does, the recourse options you have seem to work. Take a closer look!

> KYC

Yes, and this has increased over the past few years. An account number can't be private, in fact, many banks double check the name of the owner before they let you transfer (they'll show you the mismatching name).

[ikr678]

The countries with more advanced banking generally have stronger consumer protection laws across the board. Less need for buyer protection as a service of your credit card or non-bank payment platform, when the regulatory environment discouraging bad actors with fines/enforcement action.

[TheSpiceIsLife]

What does direct bank transfers offer in the way of dispute resolution?

Here in Australia we’re constantly warned not to transfer money direct to sellers bank account as there’s pretty much no way you’ll get your money back if the goods don’t arrive, and there’s not much the police will do for small value transactions.

[brnt]

> What does direct bank transfers offer in the way of dispute resolution?

It's just not something that comes up. The number of such stories I read on here/through Anglo-Saxon sources far outnumbers the number of local problems. Fewer shady sellers, perhaps?

To your question: although not as easy as a charge back, banks let you appeal. Some (perhaps many now) also offer cheap or free 30/90/365 day purchase insurance.

Also, for small value transactions there's a special legal channel.

[londons_explore]

Address books in phones don't store people's Bank details, making it a pain to pay someone. Many people don't have their own bank details memorized either.

Being able to send money to someone just knowing their phone number is the real value-add.

[Symbiote]

Within several European countries they do, since the banking systems support sending a payment using a phone number. You get confirmation of the recipient's name before pressing "send".

It's MobilePay in Denmark and Finland, Vipps in Norway, Swish in Sweden, PayM in Britain, etc.

For example, we split a restaurant bill at the weekend. In roughly the time it took one person to pay the whole bill on a card, the rest of us had sent ¼ each to her using her phone number. There are no fees for this.

In the next year or two, this should start to work internationally.

https://en.wikipedia.org/wiki/European_Mobile_Payment_System...

[evandijk70]

I can send anyone a 'payment' request from banking app on my phone over whatsapp, which they can very easily pay through their banking app.

[hocuspocus]

> Many people don't have their own bank details memorized either.

In the era of ubiquitous smartphone usage, nobody needs to memorize bank account numbers.

But even 15 years ago I would copy/paste my IBAN into an email.

[brnt]

You can ask someones account number.

[2ion]

- direct bank transfer = debit. When you send money using SEPA you have no right at all to charge the money back, as it's always a voluntary authorized transaction. The marchant got you by the balls.

- In DE at there are fast "instant" payments called paydirekt or giropay, which make "checkout" using your giro account fast and simply. However, it's debit again. Balls grabbed.

- Your checking account usually receives your salary, and you have to monitor it for fraudulent charges, which can just "happen" if somebody knows your IBAN. Therefore, entering my IBAN on any site that is not 100% trustworthy and liable is a no-go.

Debit is really bad for buyer's protection, and even when using "reverse debit" which means authorizing a party to draw money from your giro account, you in theory can reverse such charges, but the reversals are handled by your home bank and in many cases the reversal is getting rejected based on intransparent reasons or takes _very_ long. Customer service is simply bad at banks.

So what about credit card processors like Stripe?

- German credit cards are issued largely by banks in the visa/mastercard system. That means the banks themselves are responsible for accepting or rejecting chargebacks. Bad customer service by banks again, very high burden of proof => high chance of chargeback not going through, paper tiger wars.

- Most merchants have really shitty payment gateways in place or even store credit card information on site. The smaller the business, the shittier the storage and you can basically guarantee that data protection is effectively handled at most SMB like trash. => I do not enter my main credit card info on random sites.

So what does Paypal offer?

- almost no questions asked chargeback of any amount if you return the goods (proof = shipping label) - masks credit card number IBAN and other information from merchant

That's it. I'm ok paying small amounts using direct debit but expensive purchases, like electronics, gardening equipment and so on, go through either (a) Amazon w/ its no-fullshit refund policy (b) a merchant offering PayPal. PayPal is expensive, but customer friendly. Germany has _no_ true competitor to PayPal's service except notarized escrow, and I don't want to lawyer up just to buy a lawn mower.

[doikor]

About the charge backs if one is mainly shopping from local companies there is really strong consumer protection laws instead.

Basically you can demand a refund and if they don't give it to you it is a really simple process of just sending a bill to that company for your money and initiate bankruptcy process if they fail to pay.

[2ion]

Yes, but in this context, everything depends on the interaction with the merchant. While most merchants are not pricks, they are businesspeople and won't unconditionally accommodate any claim even if it is reasonable. Based on my experience, the worst are not necessarily the small merchants unless they are just fraudsters but the semi-large online stores like Otto/Saturn/MediaMarkt which will do everything to make a return and refund as impossible as possible.

[doikor]

In Finland consumers have the right to return the product for 7, 14 or 21 days (depending on product category and if online/offline store). The merchant has very little control over this with the main exceptions being stuff like underwear etc that can not be returned due to hygiene reasons.

The product when returned still has to be in a state that it can be sold.

This also means that lot of people pointing out Amazons very liberal return policy being a good reason to shop there makes no sense here. We got roughly the same return policy for all online shopping. And as others pointed out EU regulations give 14day return policy for all online shopping.

[evandijk70]

In the EU, the law is that merchants have to allow a return and refund for any online purchase unconditionally, provided that it was initiated within two weeks of purchase. I have never had any problems with this.

[s17n]

There's no way to do peer to peer direct bank transfers in the US.

Also, in the US, credit card providers accept all liability for fraud, as a consumer there's no way you will ever lose money to credit card fraud.

[maccolgan]

ACH does work, but it's just not accessible via an API and such.

[s17n]

How do you send money via ACH? I've never figured out a way to do it. Unless you're talking about the common "link an account" functionality where you do trial deposits, etc...

[fmajid]

There’s Zelle, but it lacks universal coverage.

[makeitdouble]

I don't know if we'd call that a "network effect", but there is a (vicious?) cycle cementing PayPal's position.

More often than not sites will get different prices based on the transaction volume, so having a number of small minor payment options is of little benefit, except for very specific cases like Alipay.

Then if volume is transaction an important consideration, going with the market leader is the most reasonable choice.

I'd assume that's the logic Nintendo applied for its online store for instance, making PayPal the only alternative option to standard payment systems.

[pjerem]

PayPal do have a network effect amongst customers who choses PayPal because they marketed for decades that purchases through PayPal are protected in case of issues.

[another-dave]

That probably just makes them a nicely cemented incumbent rather than a network effect.

Contrasting with social — if I want to message all my friends about a housewarming party, Mastedon might be my preferred platform & I might hate FB/WhatsApp, but if none of my friends actually _use_ Mastedon I'm out of luck. I have to talk with my friends somewhere that they can receive the message.

Whereas if a merchant offers me payment options of MasterCard, Amex or PayPal online, there's no additional pull towards PayPal because all my friends use it.

[fighterpilot]

That isn't a network effect