How to start a site like paypal?
 

How does paypal do what it does?

How are they able to keep processing costs low? Is it because their is no fraud scrubbing involved?

They make shitloads of cash off their millions of clients. How does a guy start a site like that? What does he require?

Paypal has tens if not hundreds of millions of dollars sitting in their bank accounts earning interest daily.

many millions of dollars, to start.

Right now? A time machine. Three years ago? Millions of dollars and a great idea.

support of the intl banking community

:thumbsup

It takes millions to start?

Then why are so many paypal alternatives popping out of the woodwork now? Netteller, firepay, and the list goes on...?

Paypal chewed through something like $100million (cant remember the exact figures off the top of my head).

In my past life I was involved in the development of a similar system - the programming costs alone were $5million.

The millions of $$$ that Paypal has in its float actually doesnt make alot of money - stuff all in fact. But the fees they now charge do.

They have had significant fraud problems in the past (they lost $7million in one case to a few Russians) hence the reason they now lock accounts readily.

They are still borderline, Mastercard hates them, Visa has had issues with them and then there is all the various attempts to make them a bank or prohibit them operating in certain localities.

The competitors like Firepay are no where near what PayPal is or was. There are a lot of limits on the use of credit cards to fund accounts which is essentially the risky part both due to the costs involved and the chargeback issues.

PayPal has it locked up though - you wont see anyone else come close to the user numbers they have anytime soon.

Gotys and friends?

Even so, how does a site like Firepay even get a chance at operating something similar to Paypal when even Paypal (as large as it is) is frowned upon by the credit card companies. Why wouldn't Visa and Mastercard just say, nope, we're not going to allow any more Paypal type sites to operate.

It's not like I plan to open up a new Paypal operation. I'm just curious as fuck to know how it's done. The shit intrigues the fuck out of me.

Because it isnt Visa or Mastercard that issue the facilities, its individual banks. So its not that hard to get a facility, but can be expensive (lots of capital required as security)

But eventually Visa and Mastercard find out, and then they get the shits, but once you have a merchant facility, if you are doing any sort of volume, and they take it away from you, then potentially the damages could be large. The problem with PayPal for them was that even though the volume wasnt huge (I think when they had 7 million members they were still only processing $7million a day), they were very much in the public eye. And Visa and Mastercard would have looked pretty uncompetitive had they yanked everything from under them (think potential anti-trust issues) - this is of course different to your typical adult site, which doesnt have a great public profile, does even less processing, and no one in the community gives two shits about, so Visa and Mastercard can do what they like.

Users can't charge back Paypal payments can they?

Not sure, but it was a cool scam - it only took about 3 days to get the money, so PayPal were totally unaware until a while later.

Really, when PayPal started, they had no real fraud prevention measures to speak of, and it was probably the one thing that was going to bring them down had they not been able to do something about it.

However, if they had of been as careful and as strict as they are now, they probably never would have gained critical mass. The limits on how much you could send before you were verified etc were much higher previously so you could pretty much create an account and start using it - no waiting to verify your credit card etc.

Without that ease - people wouldnt have bothered. As there customer base grew (which it did exponetially) they were able to start bringing in harsher rules as there were enough other people already using it to make it worth the hassle.

Thats the problem all these new guys face today - PayPal isnt expensive so price competition is going to be very hard and from what I have found in looking at and trying to use them all, they are all much harder to make into a functional system, and they avoid credit card use like the plague - which consumers if they are smart will hate as it prevents the ability of a chargeback incase of a bad transaction.

If you have used your credit card, absolutley.

Which is wrong if the customer says I never did the transaction and it comes back as a Card Not Present dispute, as PayPal do a transaction to your card and have you verify it and the card companies should accept that, but if you dont receive the goods, credit card companies will still let you charge back - even if it wasnt an internet transaction to begin with - so you can easily charge back any PayPal charge on your credit card.

Firepay is Canadian, but based in a fiscal paradise. It was created and is backed by the online gambling business. The government up here tried to shut them down, but their strenght with " special ' banks ( read powder banks...) has kept them going....
On the other hand, no adult because they do not want to jeopardize their position.

answer: gambling
PayPal has banned gambling Transactions starting Nov 25

because there are million people with millions

Yes they can...it's not called a chargeback per se, but a user can complain to paypal that they didn't recieve services they paid for. If the seller does not provide proof that the service was delivered then the money is refunded.

Interesting though I doubt that's true, if you mean that there are millions of individuals whose bank accounts exceed 1 million dollars.

Remember, 80% of the population in the US, the richest nation on earth, don't have jack shit in the bank (maybe $50 if they're lucky). 18% are middleclass but not wealthy. The people with the most money are the 2%. The stats I'm quoting are old but I would bet that they haven't changed much over the past 50 years. If they've changed, the disparity between poor and rich has probably grown, not diminished.

The figures are also a reality check. Many people suck cock throughout life and will have to eat dog food after they retire because they're dead broke.