What's going on at PayPal?
By glazou on Monday 11 July 2011, 10:27 - General - Permalink
Seen from a user's perspective and without looking at its financial results, PayPal is dying. Let me explain... First a few important details:
- I'm based in Europe, in France to be more precise.
- my internet connectivity is 18 megabits/s download, 1 megabits/s upload ; not shared. Pretty fast.
Now, the situation:
- PayPal is slower and slower every day. Often takes 10 to 20 seconds just to reach the web site's home page, 15 to 30 seconds to log in, 30 seconds to get a static page containing four links. It can take several minutes to download a two-months sales report (full text tab-separated). It's so long to download a 3-months or longer report that PayPal now says officially you can't download more than 3 months! And if you try (with the notable exception of the PDF report), your request will often - but not always - fail. PayPal is the only web service I am relying on for my business activity that is so slow. Even my french bank's web site works better...
- PayPal is more painful every day. PayPal used to have a rather good customer service over telephone. The call center is now in Tunisia (I asked) and is almost unable to tell you anything except the corporate blah-blah present in their cheat sheets. Reaching a PayPal employee is almost impossible, even for a serious problem.
- PayPal's web site is totally outdated. It has clearly grown in circles, based on an infrastructure that was probably enough six to ten years ago but is now absolutely underestimated. It's so slow it's sometimes almost unusable, its features' set is weak, it's web design should be entirely revamped, its architecture and site map is such a mess it's difficult to find valuable help or even sometimes information on PayPal's web site. If you sell goods on the Web, PayPal is now the weaker spot of your online architecture because it requires so much time and energy to find something or actually do something on their web site.
So what's going on at PayPal ? Is the once-little-startup-that-succeeded-and-became-big sleepy ? Is eBay investing enough in PayPal to let it evolve ?
Here's the problem for many people around me here in Europe who use PayPal: PayPal is simple to use but PayPal is now too slow to use. It's also now too expensive for the quality and modernity it offers. For a 29.26€ sale (excl. VAT), PayPal takes a 1.44 € fee. So 4.92%. That's ok for a service that works fast and is simple or trivial to configure. But it's not the case any more and it becomes then too expensive.
At the same time, "PayPal drove strong payment and revenue growth while expanding margins". So what's going on at PayPal ?
Comments
I have read recently people complaining about eBay accurate search low capabilities : "Why eBay will keep losing its business - product search is not relevant" http://www.fromdev.com/2009/05/why-...
May be eBay has hired recently a cost killer, and has started suffering from his/her iniiatives.
I was exactly thinking the same last week, when integrating and testing some payment buttons.
The main website is very slow, but playing at the paypal sandbox is a real nightmare..
Why is eBay buying Zong? So that we can all have our purchases itemized on our phone bills? (Telcos are now in the banking business or are they just licensed providers of credit?) Have you ever tried to make sense of a modern phone bill? Give me a break; I’ll keep my purchases itemized on my bankcard or banking account statements, thanks.
“Zong charges merchants more than PayPal for a comparable transaction. PayPal transactions carry a fixed fee of 30 cents in addition to 2 to 3 percent of the purchase. Merchants who use Zong receive between 70 and 92 percent of the purchase amount, said Brooke Hammerling, a Zong spokeswoman.”
What? Zong (and the telco) takes a commission of between 8 and 30 percent? Would you mind passing that past me again please, I think I mis-heard it the first time …
eBay: Magento, AliExpress, Skype, Fish, FigCard, GSI Commerce, RedLaser, Where, Milo, Fetch, Zong, PayPal, Visa, MasterCard, Google, Schmoogle, whatever …
eBay’s chief headless turkey likes buying toys, none of which have done anything to improve the eBay Marketplace’s bottom line, not even in this the fourth year of this turkey’s three-year turnaround plan to change eBay from what made it so successful into, who knows what?
The fact is the rusting old hulk eBay is presently being kept afloat by the clunky PreyPal so it’s good to see these financial services boys recently squabbling and threats to PreyPal now coming thick and fast. It’s interesting times for all we eBay “haters” (oops, I mean “watchers”). I just hope that someone has remembered to bring the popcorn.
Even though PayPal clearly offers banking-type services (ie, holding depositors’ money in banking-style accounts), PayPal is mostly registered in various places not as a “bank” nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal claims that they are not even a “payment network”, and there is a minute degree of truth in that claim because it could, somewhat nonsensically, be claimed that most (but not all) of their activities do no more than facilitate the transmission of money by riding on the back of the banks’ existing payments processing systems.
In fact, the only thing creative about PayPal has been their founding use of users’ email addresses as an identifier for online payment transactions. PayPal is otherwise no more than a blood-sucking parasite on the back of, and in the main cannot function except via, the banks’ existing payments processing systems.
PayPal, outside of whatever will ultimately be left of the Donahoe-devastated eBay Marketplace, will undoubtedly eventually be consigned to the history books by the retail banks/Visa/Mastercard once those players get their “online” act together.
Some people may not like “the banks” but all those participating retail banks at least supply a professional payments processing system and even PayPal concurs with that assessment: except for any intra PayPal “deposit account” transactions, they use the banks’ payments processing systems all the time and simply could not exist without them.
Regardless, all the above comments apply equally to all of the other third-party online “payments processors” that are emerging out of the woodwork and wanting to have access to your banking account. Unless they have formal and direct arrangements with all the participating retail banks, as do the likes of Visa/MasterCard, then the result is invariably going to be as potentially problematic as is PayPal’s clunky operation for its PayPal merchants—a great many of whom can tell you a sorry tale or two.
All anyone needs to know about the clunky PayPal, at:
http://forums.auctionbytes.com/vbul...
What all buyers should know about the criminal activities of eBay, at:
http://forums.auctionbytes.com/vbul...
Is that PayPal’s blood in the water, and are those “sharks”—oops, “banks”—I can see still circling?
Enron / eBay / PayPal / Donahoe: Dead Men Walking.