[Firehed]

Banks are not doing merchant processing for most people. Having some sort of reserve to guard against chargebacks is incredibly common in the industry; PayPal, however, is known for going completely over the top as the article and numerous commenters indicate.

[tripzilch]

> Banks are not doing merchant processing for most people.

Well, US banks aren't. Dutch banks are doing it just fine:

http://en.wikipedia.org/wiki/IDEAL

Works very well and I trust this method a lot more than a payment processor that's not my bank.

I'm not entirely sure what the rules are from the merchant's side, however.