[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.