Paypal is a classic example of a fossilized bureaucracy:
1) The departments within Paypal are unable to share information, alert each other of status, or become aware of what they are each doing. The first clue that this is happening inside an organization is the requirement to submit (or resubmit) the same information multiple times.
2) Complete inflexibility. If you don't fit a pigeonhole profile of previously defined customer models exactly you can't use the service.
3) No humans. There were people once. There aren't anymore. The people you talk to on the phone seem human, but they are actually part of the machine's broken user interface. They can no more influence what goes on inside the machine than you can. They can't tell you why your account was frozen because literally nobody anywhere actually knows.
4) Insistence that you are wrong (or a criminal in this case). The customer is always wrong. Enough said.
Add to all this a moral hazard so large it almost completely guarantees it will never be fixed: when the system breaks, they just keep the money, and you're got a perfect recipe for perpetual fail.
The most valuable part of Paypal is the systems and strategies they've invented for risk mitigation and fraud prevention.
Before they developed those systems, online payment aggregators were a nonviable business.
Many people in the late 90's and early 00's felt that it was a failed experiment and that the risks were just too high. This after a long list of failed startups and failed infinitives at existing banks.
Yes, it can seem very obtuse. But they are in a risky business. Without their anti-abuse measures (which every other merchant aggregator has cloned to some extent), this niche would not exist. You would have to get your own merchant account if you wanted to sell online.
Why doesn't some start-up address this head-on? Providing a payment provider solution to selected customers, ones that have been carefully screened but are treated well after the initial investigation so long as they behave, would surely help out a lot of start-ups.
Maybe it's more trouble than it's worth, though, but I just want to believe!
1) The departments within Paypal are unable to share information, alert each other of status, or become aware of what they are each doing. The first clue that this is happening inside an organization is the requirement to submit (or resubmit) the same information multiple times.
2) Complete inflexibility. If you don't fit a pigeonhole profile of previously defined customer models exactly you can't use the service.
3) No humans. There were people once. There aren't anymore. The people you talk to on the phone seem human, but they are actually part of the machine's broken user interface. They can no more influence what goes on inside the machine than you can. They can't tell you why your account was frozen because literally nobody anywhere actually knows.
4) Insistence that you are wrong (or a criminal in this case). The customer is always wrong. Enough said.
Add to all this a moral hazard so large it almost completely guarantees it will never be fixed: when the system breaks, they just keep the money, and you're got a perfect recipe for perpetual fail.