PayPal Redux

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By Rubic
December 18, 2001

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Hi all.

A couple years ago on this board -- my, how the carpe diem's when you're a long-term investor -- I posted some comments on Nokia's seed money investment in PayPal. Since that time -- though 3G wirelessness has yet to achieve full blossom -- PayPal has managed to become quite an entity in the transfer of electronic drachmas.

In fact, for Ebay transactions, PayPal has become the transfer medium of choice, with many sellers preferring (in some cases, insisting) on using PayPal to complete the transaction.

After winning a small Ebay bid last October, I decided to sign up for PayPal. Usually I'm a compulsive early adopter. I started Internet banking back in 1995 (Wells Fargo) and gave up my landline in 1999. So I was late to the PayPal party. I assumed they had most of the bugs worked out. I even listed BizKiffer as my "referral agent" so he'd receive a $5 bonus -- eventually I'll cage a German beer out of him one day.

However, in attempting to add funds from my NetBank account, PayPal refused to accept me as a Verified Member.

Here is where I find the service a bit disconcerting.

The first thing I noticed was the PayPal website utilizes some special cloaking device <0.7 wink> to obfuscate contact information.

The PayPal home page doesn't display a "Contact Us" link/button. There is a Help section, however. The help link is intended to answer the most obvious questions, and there actually is a "Contact Us" button on the help screen. It encourages the clueless to first read the instructions. For the benefit of future generations, the unlisted email contact is

Okay, I understand that if you're a company in the business of processing millions of daily cash transactions you don't want to get bogged down in the human interface details. Even handling email takes time. As an investor and a businessperson I can appreciate the bottom line. But I also recall getting a $50 cash bonus from my latest Internet bank for signing up a new account. When I was looking into NetBank from an investment perspective, I learned that the cost for it (and its competitors) to acquire new accounts was somewhere in the $50-75 range. PayPal's cost isn't nearly so high, but the fact that they're willing to offer a modest $5 referral fee means that it's some number above zero.

Anyhow, my first response from PayPal wetware was a copy-and-paste blurb:

"In most likely cases it is seen that the members add a bank account that can be only be used to withdraw funds. However, it cannot be used to add funds into your PayPal account. The addition of this bank account will not make you a Verified member."

Well I already knew that <0.1 wink>, but, hey, at least I had an email contact!

Now at this point I had already given up on PayPal to handle my Ebay transaction. Instead, I retained the services of our old-fashioned United States Postal Service for $0.95 and sent a money order. I hope they use the proceeds to sponsor Lance Armstrong's fourth Tour de France victory <0.4 wink>. I mention this to indicate that I no longer cared about establishing a PayPal account, but was merely getting my jollies by enjoying the investigatory ride.

A series of emails further established that:

1. PayPal refused to accept funds transferred from NetBank, my only banking service.

2. Though PayPal would not accept funds transferred from NetBank, they could provide no list of institutions that they would accept funds to seed my account. :-/

3. There is no way I could send in any kind of deposit (personal check, money order, etc.) to fund my PayPal account.

All in all, I find this a somewhat quixotic manner in doing business, especially for a company whose raison d'etre is handling money transfers. I consider PayPal's present incarnation flawed in the customer service department, and judging from a number of Ebay members, I'm not the only one.

Here's one comment from a recent seller who listed a bike for auction:

"terms....first off, sorry NO PAYPAL at all! Paypal owes me for auctions dating back to a year ago and will not resolve my case...paypal will gladly take payments but they won't pay me! If you pay paypal, I won't send you the bike"

still-got-my-$0.00-paypal-account-balance-ly y'rs,



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