[kevinconroy]

Excellent points. As developers, we're used to just plugging in an API and have it "just work".

Money transfer systems are different. They draw a lot of dark, evil forces that try not just to hack their systems, but to game and abuse it through normal operations.

It's unfortunate that legitimate businesses get caught in the crossfire sometimes, but we rarely hear about how many credit card thieves PayPal's system rightful stops. (Answer: It's a lot.)

[elpadi]

"but we rarely hear about how many credit card thieves PayPal's system rightful stops. (Answer: It's a lot.)".

How do you know it is a lot if we rarely hear about it?

[potatolicious]

I don't know about PayPal, but I used to work for a well-known online retailer and have seen the fraud data on that side.

The specific numbers are privileged, but suffice it to say, I'm very confident that PayPal deals with as much, if not more fraud, than the mind-boggling amounts I saw at that job.

[malyk]

Fraud definitely exists, but paypal should give more leeway to customers they know aren't fraud. Yes, this customer could, all of a sudden, turn into a fraudster, but there has to be a way to combat that without being so openly hostile at the beginning to a customer in good standing.

[calciphus]

Paypal's goal is to protect the person giving the money, not the person receiving it.

Yes, that's not ideal for you as the merchant. Welcome to being a merchant. Shrinkage exists.

[rustynails]

Not in my case. I bought an iPod over eBay a few years back. It was delivered faulty. I chatted with seller who said send it back. I told him I would when I "got back", which I did. Sent it registered. The guy stopped answering mail when he got the device. His reputation started to plummet very quickly, mine was 100%. PayPal refused to investigate because I notified them too late (about 6 weeks after purchase) despite emails, faulty item delivered and acknowledged. PayPal is a scam and I will never trust their buyer protection again. Http://www.paypalsycks.com/

[streptomycin]

How long do you think they should accept chargebacks? 6 weeks? 6 months? 6 years?

[Karunamon]

One can extrapolate based on two things. Firstly the would-be competitors who have been utterly murdered by various kinds of fraud. Secondly the assumption that the amount of fraud in the world isn't going down.

There are people (individuals, and entire enterprises) dedicated to financial shenanigans of the black hat variety. If Paypal didn't have a robust risk prevention system, they'd have been annihilated a long time ago.

[brazzy]

Can you name some of those competitors destroyed by fraud? I'd be interested to learn more about those cases.

[Osiris]

I've been using PayPal plus another payment provider to provide other payment options and I can say that I get almost no chargebacks with PayPal. I think I've had one in the past year. The other company, I get several chargebacks a month. Their fraud protections just aren't nearly as good as PayPal.

In fact, I often spot fraudulent charges very quickly and have to email my third part processor to refund or cancel the payments.

I was pointed to http://maxmind.com by another HN poster, which is an API that'll give you a probability of a charge being fraudulent so you can verify it before passing it to the payment provider. I'm going to test that out in combination with Stripe.

[pc86]

Is Stripe that other provider? I've been contemplating switching but I agree with your sentiment that PayPal's fraud detection is the best available right now.

I'd definitely be interested in seeing a write-up about integrating Stripe with third-party fraud detection systems.

[Osiris]

No, I haven't currently implemented Stripe. It's another payment processor, the kind that provides their own payment page.

[cdk]

If I recall correctly there is a mention of this on Paypal's story in Founders at Work.

[Firehed]

I work with ex-PayPal engineers on similar systems. While I can't give numbers as they're confidential, our automated systems catch a lot of attempted fraud, and I know Paypal does far more payment volume and has much more sophisticated fraud detection systems than us (compare three years of data to over a decade at scale). Doing the math... yes, it's a lot.

Also, fraudsters tend to not brag about how much fraud they weren't able to process.

[daliusd]

Recommended read "Founders at work". There is chapter about PayPal.

I wonder if other Elon Musk's creations (SpaceX and Tesla) will become something like this after he will sell them.

[alexsb92]

Somehow I seriously doubt he will sell SpaceX especially if it's just to turn a profit. Sure in case something happens and all of sudden SpaceX as a business starts flopping, he might end up selling it to other defense and aerospace manufacturers, to at least recoup some costs for whatever shareholders.

Overall I think SpaceX is his baby. Based on interviews and what i've generally read about the man, I think he's gonna stick with it for the long run. I mean hell, he wants to go to Mars as soon as possible in one of his own rockets. That's a dedicated man.