The backlash here is comparable to EA's banning of users from their single-player games, I would say. Shitty customer service is crappy, but the backlash is greater in proportion to the criticality of the asset in question. In Paypal's case, the asset is cash, which naturally flips the "fuck you guys" toggle in people in general a bit faster than, say, not being able to log into the Minecraft forums.

> not being able to log into the Minecraft forums

Ha, some of the anger I've seen from our users would make you think we're stealing millions of $ from them when they have an issue.

Certainly. But any business will have issues with cash and institutions. With banks, with customers, with the government, everyone. If you want there to be no friction ever for monetary transactions then be prepared to live in that world and make sure to express that opinion at the polls, there's not a ton banks and/or paypal can do on their own to make that world a reality without simply going rogue and abandoning all pretense of legality.

Also, re: minecraft it hasn't gotten much press but some people have had problems actually getting the game after they've paid, and in most examples the customer service they've gotten has been atrocious to non-existent. This doesn't just prevent people from logging into forums, it prevents anyone from playing on any public server and makes it a lot harder to even install the game or get updates (basically forcing people to pirate the game). Not that I'm saying Mojang should be raked over the coals for that, but it's not such a dissimilar situation.

The big backlash is that PayPal has a history of doing this kind of thing. They're just getting called to task for it now.

Google is starting to make me very uncomfortable. Not only are they the world's largest adware company, but they are growing into other things as well. I am in the process of looking at how to reduce my own exposure to corporate antics on their part. However, I haven't had too much trouble with them yet.

Paypal is different. I have had an account frozen (fortunately with very little money in it and no urgent need to accept more) for reasons which were plain stupid (something about someone another account holder at the same IP address I logged in under at least once did business with). I have a Paypal account I use to make payments only, and only when there is no other choice and I keep a $0 balance there.

So what makes Paypal different is the fact that I have had a bad experience with them so that I will not trust them with anything important (f. ex. money).

No, the major issue was not customer service, but the way they locked them out of the funds.

PayPal seems to make a habit of screwing over their customers and generally being assholes whenever possible. Mojang and google have a lot more good will to burn through before people start getting angry.

"Once is an accident. Twice is coincidence. Three times is an enemy action."

Paypal has had a number of these gaffes reach a high level of public interest in the last year. Whether the customer was "in the wrong" is not a material issue -- the consumer perception is more significant. If the customers feel cheated, they are going to draw attention to the issue.

Companies make a deliberate choice about how much they want to invest in customer relationships. Paypal has assigned a very low value, here, in the name of keeping customer service costs low. The results are specific instances of customer outrage which have an interesting network effect -- the irritation propagates quicker, and further, because of the increasing connectivity of the social graph.

The end-result is either Paypal reconsidering their customer investment, or a widening opportunity for another service capturing market share.

The problem with this analysis is that we're only seeing a tiny fragment of the whole. All of the work that paypal does to combat fraud and illegal activity is largely kept secret, sometimes for legal reasons. A fraudster, moneylaunderer, or a fence isn't going to blog or tweet about paypal shutting them down, and paypal isn't going to make a fuss about it either. The tragedy is that such things happen routinely, almost certainly more often than paypal screwing over an otherwise legitimate business transaction. The latter tends to happen when there are unusual aspects in play (people operating without a business or non-profit license or using paypal incorrectly but not intentionally fraudulently).

That said, clearly paypal needs to improve the way it handles customer service and probably introduce a better way of disputing holds on funds.

Not to mention that in this case the cash was destined for under-privileged people to make their holidays better.