[freudling]

I have been looking to accept payments through my website, and, after years of turning my back on Paypal, I signed up for an account with them. This is only a temporary solution.

My question, with all the problems customers face using paypal, how are they not considered a bank? Here is a definition of a bank:

bank - an institution for receiving, lending, exchanging, and safeguarding money and, in some cases, issuing notes and transacting other financial business.

Paypal conforms to the above definition (they have credit cards so they lend money).

[Rumor]

The credit cards just have their logo on it. The bank providing it is GE. It's like a department store card with the Mastercard symbol.

[mac128k-1984]

While I'm not disagreeing with you, I bet you could make the same argument for stock brokers and other financial institutions. While by strict webster definition it is a bank, clearly they are not defined as such by the government and that's what counts, as banks have to adhere to a ton of regulations.

[Graviton]

I tried to hold up Paypal once. Got as far as sticking pantyhose on my head and bumping into the screen several times shouting "Nobody move or I'll execute every last muter f***ing one of ya".

Didn't work, didn't work...

[Laminar]

Originally Posted by Graviton 

I tried to hold up Paypal once. Got as far as sticking pantyhose on my head and bumping into the screen several times shouting "Nobody move or I'll execute every last muter f***ing one of ya".

Didn't work, didn't work...

Nice.

[residentEvil]

i would say they aren't safeguarding money; they aren't FDIC insured for one. so it doesn't have the backing of the federal reserve. i think that is a something i would look for in a bank.

[freudling]

Why I think they should be deemd a bank:

-They DO safeguard your money. You have an account with them where money is held by them until you request them to move it somewhere else. That money is located in one of their many subsidiary bank accounts
-As an institution, Paypal receives money. Their account holding at any one time exceeds $50 million USD. This is not their money, of course, but the account holders' money. Same as any other bank...
-They charge fees, just like a bank to move money around
-They exchange money in numerous currencies

Paypal is much, much more than Western Union or other money transfer outfits. They are a bank because they provide user accounts and even debit cards so you can use those accounts as you would your bank account.

With Western Union and the like, you can transfer money to someone immediately virtually anywhere in the world. Paypal takes days, because they have to move it from your Paypal account through their holding account to your 'real' bank account. It is no different than doing a bank to bank funds transfer.

I am looking into corp.moneris.com

[mduell]

From the Wikipedia:

In the United States, PayPal is licensed as a money transmitter on a state-by-state basis. Although PayPal is not a bank, the company is still subject to and adheres to many of the rules and regulations governing the financial industry including Regulation E consumer protections and the USA PATRIOT Act. However, on the 15th May 2007, PayPal announced that it would move its European operations from the UK to Luxembourg commencing 2nd July 2007, as PayPal (Europe) S.à r.l. & Cie, S.C.A. This would be as a Luxembourg entity regulated as a bank by the Commission de Surveillance du Secteur Financier (CSSF), the Luxembourg equivalent of the FSA. PayPal Luxembourg will then provide the PayPal service throughout the EU.

[Peter]

paypal shaft their users more than even banks do.
/bitter

[Big Mac]

Reasons why PayPal is not a bank:

-PayPal is not FDIC insured;
-PayPal has been known to impound an account's funds indefinitely without just cause;
-PayPal does not perform many of the traditional functions performed by banks (checking & lending).

PayPal isn't an evil force. You'll probably not have a problem with it. But it's not a bank.

[residentEvil]

is that an echo?

[Railroader]

Is that an echo?

[analogika]

PayPal IS a bank, legally, in Europe, starting 2nd July 2007.

(while we're echoing for those not reading the thread.)

[freudling]

I am just waiting for the banks (business accounts) to integrate and offer ecommerce solutions for their account holders. It makes too much sense. Screw the middle guys like Paypal and just give us the option of using our bank accounts online features to the full potential.

Right now as a pesonal account holder I can send payments to anyone with an email address. As long as they are with one of the 6 listed major banks in Canada, they can receive the payment instantly. Very slick. $1.50 flat fee. $1000 limit per transaction.

I can also set up a payee list and pay people and bills that way.

Just need a few more features like being able to receive credit card payments, and payments from other countries and bingo, buy buy middle man.