There are some things that cause PayPal to just freeze an account, and it's next to impossible to speak to a human or to otherwise get the situation resolved.
Pretty much the only threat to Stripe's eventual world domination would be PayPal getting its act together.
Paypal is risk averse, which means you shouldn't use them for cases where you're taking a large amount of money up front and not delivering in the near future (i.e events, crowd-funding), or alternatively get pre-approval from Paypal.
I've no idea what the current fraud level against Stripe is, but as they become more mainstream they're going to need to employ more anti-fraud and anti-risk measures as their exposure increases.
I'm one of Stripe's cofounders. For what it's worth -- we already process billions of dollars a year. (More than PayPal when it was acquired.) There'll always be more we can do on the fraud/risk side, but we're already operating at a scale that requires a decent amount of sophistication.
The problem is that fraud/risk (like tech security) is it often involves black swan events. Everything seems fine right until the point where it's not and you're on the hook for millions of dollars (Stripe is probably in the position where you can afford to take a few black swan type events and survive; a lot of Paypal competitors weren't).
Given that Stripe don't do the "wallet" approach of Paypal and is primarily focused on API customers I'm guessing your risks in general are lower, but I'd recommend you be careful about becoming over-complacent.
Absolutely. Indeed, I'd characterize us as actively paranoid. My point was merely that we're already operating at a scale that needs pretty good fraud systems.
(I think we're mostly in strong agreement.)
Everyone keeps saying that fraud will be a serious problem for Stripe, but they move a huge amount of money now which is probably comparable to the period when PayPal nearly got destroyed by fraud - which was around the year 2000 when the web was a lot smaller.
Payments are final and instant and, best of all, don't require a middle man.
Only for extremely specific and useless definitions of "no fraud."
If I send my bitcoins to someone to buy something, I have no protection if they decide not to deliver.
At which point the Bitcoin enthusiasts will say "but you can use a third party escrow service," which is true, and puts us right back into the same situation we are with PayPal.
Online it's the same thing. I'd pick credit card or Paypal over bitcoin just like I pick credit cards IRL over cash. It has nothing to do with obscurity.
With Credit Card companies and their proxies, Stripe, PayPal, etc. there is no option of choosing a buyer protection service provider which meets your needs (unless you consider strict to extremely strict a choice).
Buyer protection isn't always a good thing. Often it is a hindrance to progress. Merchants should be able to chose the level of buyer protection they want to offer.
Bitcoin escrow doesn't work that way. Escrow cannot decide by itself to freeze your money. There are three parties in the transaction and you'd need the consensus of at least two of them to move the money. It's either the buyer and seller (in ideal transaction), or the escrow and seller or the escrow and buyer in a situation where transaction is disputed. The bitcoin escrow cannot behave like paypal do in this case.
To be more precise, you have no protection from the money transmission service. This is no different from cash.
For better or worse, Paypal has survived and looks like it's going to go on surviving, that's why people if they only support one method, choose it.
PS. They accept Bitcoin donations (not in the indiegogo campaign, just independently) and already raised 52.44 BTC which roughly translates to 5244 EUR. Not bad if you ask me for a payment channel that's not actively advertised by them.
Unless I receive the goods before paying, I would never buy anything with Bitcoin online. There’s no buyer or fraud protection whatsoever. I don’t understand how any legitimate merchant would be alright with that. If a merchant would only accept Bitcoin, that would come across just as sketchy as a merchant who wants me to mail him a cashier’s check – never gonna happen.
I'm a supporter of bitcoins and want it to succeed, I just don't trust a lot of the vendors that use it.
Out of the dozens of times I've purchased with Bitcoins I have never been ripped off.
Buy from reputable companies or use an escrow service.
A homeless guy asked me for my car keys the other day. He said he'd clean the inside of my car and bring me the keys. I didn't give him my keys. Something tells me you would have.
Something like PayPal for Bitcoins? Sounds like we're back to square one. What's the point of bitcoin again?
For the delivery of real world goods you can write small scripts in the tx that monitor tracking numbers, have time locks, and the like as to maintain more control over the flow of money. Bitcoin is trustless, but only to an extent. Just like anything there will be point of failures, but Bitcoin minimizes them to a large extent and brings with it the opportunity to distribute power among many third parties, not just one.
I won't even bother answering you last question though, because I'm sure you realize how ridiculous that sounds in the context of this thread. Namely, if MailPile only accepted Bitcoin this would have never happened.
Good, then you should be fine donating to Mailpile using Bitcoin. Because it's not a purchase transaction, it's a donation. There is no promise of a product.
By clicking 'Continue', you acknowledge that you understand that you are contributing to a work-in-progress and not making a direct purchase. Perks are managed by the campaigners and cannot be guaranteed by Indiegogo. Your click also acknowledges that you agree to the Indiegogo Terms of Use.
I think crowdfunding would be a lot less popular if people actually understand it wasn't just a pre-sale. Because most people are not just donating.
Exactly. In a world where caveat emptor doesn't apply for consumer purchases, this is a mild case of fraud. Naturally, PayPal is extremely wary.
Fraud is still fraud, so if you get defrauded by someone, all you need is that a judge decides that Bitcoin is money, like it has already happened with that guy in the US who ran a ponzi scheme based on Bitcoin and got caught. So don't worry about that.
And then what, do I need to sue every time someone stiffs me? That would be a colossal waste of time and money, which means in practice that the fraud gets away with it – knowing they might not even have the funds to pay me.
The way it works now is, if I’m not satisfied and the merchant isn’t being reasonable, I can call my credit card company and request a chargeback. No lawyers and courts needed.
About chargebacks, again, it's a US and Australia-only thing, so yeah, maybe in those places Bitcoin won't look so good, won't be adopted, and they will be left behind.
Fraud is very different from chargebacks - if you lose money in fraud, good luck getting it back from the fraudster; proper chargebacks mean you get the money back in any case, even in extreme cases if your bank goes bankrupt during that time.
There are more than enough options for buyer protection with Bitcoin. The good thing is that they're all optional. Buyer protection is a trade off. Sometimes it is unnecessary. But with card companies and businesses like PayPal, merchants don't get a choice. They're liable for charge-backs for 90days and for having their accounts frozen indefinitely.
MailPile has already received over $6000 in Bitcoins, by the way. It is their only donation received which is currently liquid.
See https://blockchain.info/address/13z55AGS14pSPiPpMqAAFHb576tS...
http://blockchain.info/charts/market-price?timespan=all&show...
N.B. maybe I'm wrong but according to this graph: http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g... http://blockchain.info/charts/market-price Now bitcoin has half the value than in April (and, I known, 10x Jan value). Too volatile to use if your business IMHO.
Bitcoin can only go to zero or +inf. Past performance is a way to show what haters are losing every year for denying Bitcoin.
... said real estate agents in the early 2000s.
Folks who bought in April at $260 are out more than a hundred bucks per Bitcoin. It's just as easy to lose your shirt as it is to get rich.
How can it be a viable alternative, when its value can change by 40% in a month? Gaining or losing value is not important (if it's increasing value, I have to delay exchanging to dollars as much as possible thus withholding funds), but as long as a vast majority of the population is not using it to pay or get paid, it poses a serious problem to its adoption.
The only solutions I can think of are: either it becomes stable, and so everyday people can exchange other currencies in Bitcoin, or people get paid in Bitcoin by employers, so they can spend it whenever they want, but neither of them look like they're going to happen soon.
Am I wrong in my analysis? I'm not an expert in finance so maybe I might have missed something.
Also, does the merchant set your prices in BTC, and change prices a few times per week as the exchange rate fluctuates? Or are the prices in USD?
Why bother with the bitcoin sandwich? Why not transfer between the agents using Western Union or Hawala or whatever?
If it isn't, you can't use it to pay Mailpile- so it's irreverent.
This is simply not true. If i make my first purchuase using address A and my second purchuase using address B, how can they be linked together?
irreversibility is good for the merchant, and bad for the customer.
Bitcoin has a long way to go before it's as easy to use as Paypal.
Coinbase (out of Y combinator) is getting there.
Always avoid PayPal if you need access to the money. Even if you feel that your business falls squarely within PayPal's AUP, always have a backup implementation with an alternative payment provider coded and ready to go (I recommend using Stripe and skipping PayPal altogether). You don't want to lose new sales on top of the money PayPal decides to hold indefinitely.