PayPal security is amazing. It randomly locks people out of their accounts and randomly closes their accounts too, but actual fraudsters and criminals are never deterred.
hibikir · 1h ago
I never worked for PayPal, but I did for a competitor.
Dealing with fraud is a red queen game: The fraudsters can keep trying until they find what gaps are there in your system, and will sometimes communicate with each other: Part of our defense system involved infiltrating some of those spaces and seeing the guides that were being sold to try to commit fraud in our platform. Meanwhile you will still have a false positive rate, and getting it all the way to zero means crazy fraud. Most people just don't get to see how much fraud is stopped before they know it exists. This isn't just for financial institutions: You'd be surprised by how much credential stuffing is attempted at, say, any very large streaming site which charges a subscription.
Without looking in, it's hard for me to say exactly how successful their security team is, but being as big as they are, and having probably thousands of people whose only job is to do fraud on their platform, winning has to be pretty hard.
time0ut · 18m ago
The average person has no idea how industrialized fraud has become. There are essentially entire companies with management, support staff, IT, and office buildings whose business is fraud. It is sad when you think about how many resources have been poured into it.
calmbonsai · 53m ago
My issue with PayPal is they've always been that way. I've come close to deleting my account on 4 separate occasions.
Per discussions on this thread, the singular reason people have tolerated their horrid service over the years they've been an effective monopoly in many locales.
ronsor · 51m ago
> the singular reason people have tolerated their horrid service over the years they've been an effective monopoly in many locales.
This is correct. For some reason, many people (merchants surprisingly!) love PayPal and only accept payments through it, especially those outside the US and UK. Sometimes "guest payments" aren't an option, and that means you either get a PayPal account or don't purchase the product/service.
amluto · 41m ago
Just delete it. I used to have an account, and my experience using “guest payments” (which are usually, but not always, supported) is generally more reliable than logging in and paying.
kevin_thibedeau · 28m ago
This requires a bank that will issue one time use card numbers. PayPal is less friction for the benefit of proxying your credentials.
mihaaly · 23m ago
I did delete many years ago.
They blocked me claiming suspicious activity occurred in my account (just a low traffic personal account). Ignoring me wanting to know what suspicious activity was it and if it needed, or actually already was, reported to the authorities.
Unluckily this deletion does not hold well, occasionally with weird merchants only offering PayPal payment - credit card through PayPal - the paying fails using my old email used in the purchase and was used with PayPal before. They keep forcing me to log in. But can't! It is deleted!
I did not trust their sloppy ways then, the feeling is stronger now.
raincole · 36m ago
Yeah. I had always thought these AML/KYC stuff were just governments/people in power expanding their arms into normal people's lives. I still think they mostly are, but after learning how much fraud is happening, I'm not sure what a better solution would look like.
dcow · 25m ago
Strong digital credentialing—something the web has been surprisingly allergic to.
rcbdev · 18m ago
If you actually stop and consider the culture and ethos surrounding the advent and spreading of the Internet, it's not surprising at all.
jacquesm · 15m ago
And if you stop and consider how corporations have been abusing that sort of thing every chance they got it is even less surprising.
LunaSea · 4m ago
Can't wait for them to abuse a non-anonymized internet.
jacquesm · 2m ago
I think I'll pass on that one. It is bad enough as it is.
tgsovlerkhgsel · 13m ago
Because we've seen that as soon as it exists, it quickly becomes required for ridiculous things that shouldn't require any kind of authentication, either by data-hungry companies that want to better exploit their users, or by control-hungry governments.
Until that is solved, I'd argue that the benefits are not worth the costs.
freejazz · 54m ago
The problem isn't the fraud, the problem is that they do not pay enough staff to deal with it which leads to legitimate accounts getting closed out and people not being able to do anything about it. Money seized, etc.
calmbonsai · 53m ago
Amen.
calmbonsai · 1h ago
Yup. My advice for using PayPal is do not unless you have no other choice. I just got my monthly account statement and, as usual, thankfully zero activity.
Though extremely innovative (for its time), it's been a slipshod org since inception and slipshod is a property you decidedly do not want in a payments processor.
thevillagechief · 1h ago
My only use case for paypal is booking an internal flight in a country I visit annually because they do not accept my credit card, but will accept paypal. Literally the only reason I reluctantly got an account. The horror stories I've heard, I wouldn't put any serious money in there. And their drama during the heydays of censorship a few years ago, literally fining people $2500 for politically incorrect speech at the time, I couldn't believe sane people at the company thought that was an acceptable idea. I'd really like to know the inside story of that decision. We forget how crazy 2021-2022 was.
ramesh31 · 1h ago
> My advice for using PayPal is do not unless you have no other choice.
This is literally their business model, which is why they are able to get away with so many shady practices. Until very recently they held a practical monopoly on web based international payments.
calmbonsai · 58m ago
I concur. Thankfully, that's changing and changing very rapidly. I really hope to delete my PayPal account sooner rather than later.
yogorenapan · 53m ago
Indeed. And it's not a recent phenomenon either. I lost my first ever paycheck to PayPal randomly freezing my account. Was never able to get it back. Never used it again
nancyminusone · 1h ago
PayPal also appears to suffer data leaks more than anyone else. I use multiple email addresses for every service I sign up for. But of all all the spam email I get, 99% has my PayPal email on it, and I even have other email addresses posted publicly.
j_seigh · 57m ago
It's worse than you think. I've closed PayPal accounts and opened new ones with a different email address and PayPal updates the merchants who've been spamming me with the new email address. There's no legitimate technical reason PayPal can't use a mail relay with transaction specific email addresses to control spam.
dkga · 1h ago
Perhaps those are not leaks, but outright data sales
glenneroo · 41m ago
Happened to me with Moneybookers a few years ago. Started getting spam from various casinos at a unique email address. I contacted support and spent a few weeks explaining that, nobody could have gotten this email address unless they were hacked or willingly sold my address. After sending full dumps of the emails and a minor threat to go public with the information, suddenly the spam stopped.
freedomben · 51m ago
Exactly. They're not leaks, they're sales
buckle8017 · 1h ago
Didn't PayPal transmit the email to the merchant for every transaction?
Merchants are definitely selling email lists.
throw7 · 35m ago
Venmos's security is also A++. I made an account, sent some money, then my account was immediately flagged and closed for fraud. Nice.
tnolet · 25m ago
Off topic: Venmo does not exist (?) in Europe land. What’s its appeal compared to PayPal or regular credit cards or even debit?
overdrive110 · 8m ago
The Nordic countries all have bank-backed apps for instant transfers from a checking account indexed by phone numbers. It basically replaces every peer to peer transaction that would be cash in other countries (paying back a friend, buying something at a flea market, chipping in for a gift at the office...)
jklinger410 · 1h ago
> but actual fraudsters and criminals are never deterred.
When my argument is kinda weak I love throwing in some hyperbole to spice it up.
thinkingtoilet · 1h ago
The article is about $10 billion dollars in fraudulent transactions that PayPal has allowed that the banks had to catch themselves. Given that, it's hard to say the OP is speaking in hyperbole.
nancyminusone · 1h ago
How do you know they aren't one of the actual fraudsters or criminals?
cultofmetatron · 1h ago
> It randomly locks people out of their accounts and randomly closes their accounts too,
yup, my paypal got locked after using it for over 20 years. Customer service refused to help and wouldn't even tell me why it was locked. I still get messages from paypal that they "couldn't get process subscription for X." won't delete my data either.
Scummy behavior from them on multiple levels.
Cthulhu_ · 1h ago
Thank you for the reminder to move money out of Paypal, I get some money every month through Patreon to pay for server costs but keep forgetting about it.
Findecanor · 45m ago
A few years ago when they suddenly switched on flawed mandatory TFA in my country, it took them nine months before they started to man phone support so people could get in. At about the same time they also implemented a policy to charge for having money left in your balance — when you couldn't access it! Add to that that hey had started with cryptocurrency. I cancelled my account (17 years) as soon as I could.
climb_stealth · 1h ago
What, you don't remember random details from all this time ago? I got locked out of mine as well and the questions to restore were ridiculous. How the hell would I know what transactions I did 15 years ago? And other stupid things like that.
Gave up on it after a while and now try to avoid it as much as I can. Good riddance.
> European banks have seen widespread unauthorised direct debits from PayPal accounts, the German Savings Banks Association (DSGV) says.
> The German newspaper Sueddeutsche Zeitung (SZ) says payments worth in the region of 10 billion euros (£8.6bn) have had to be blocked, after PayPal's fraud-checking system failed.
[0] I was impeded by cookie popups and adblock/privacy-mode blockers in another language, and neither are direct reports or superior details.
tietjens · 1h ago
Yes, I agree. At the time this was the only English link I found. The BBC is much better, and it's a European issue. I cannot edit the link or title.
altairprime · 42m ago
You can email the mods and ask them to do so. Footer contact link and mention “FP #x” somewhere in the subject.
hk__2 · 8m ago
What’s "FP" for?
tpurves · 18m ago
Arbitraging fraud has always been PayPal's game. For the mass market of small-scale sellers there's a threshold, whre the cost of onboarding, verifying, underwriting and eating fraud exposure is greater than the revenues you could ever expect to make from them at their low volume. So these segments went un-served, same with many other segments of transactions or transactors. PayPal's model has always been to accept a higher risk tolerance, then to have just-enough compensating controls and/or liability-dodging to make that work. At least just well enough to have net-revenues bps exceed their fraud-loss bps.
And when that balance is working, it kinda works, but when it doesn't...
And incidentally, it's not just PayPal with the fraud problems these days. It's everybody in the banking and payments space. AI is so far quite asymmetrically helping the bad guys more. It's bad out there.
dev_l1x_be · 15m ago
Ebay and Paypal are full of scam. Simply it is thei best interest to keep this up because it generates revenue for them.
mtmail · 2h ago
German, well West European, banks are slow in creating a competitor to Paypal, called Wero. https://en.wikipedia.org/wiki/Wero_(payment) I'm not implying they block Paypal because of that. It's good to have more competition and I wished my bank would take part.
fweimer · 1h ago
The existing giro system is the real Paypal competitor. Most Europeans had access to Paypal-style money transfers before they had email. Merchants probably want to rely on another party to maintain their integration, but there is no real need for another centralized service similar to Paypal.
(The U.S. really is an outlier among developed nations in that its giro system is not widely used, and many residents would not even know how to access it. Hence Paypal's network effect can offer value there. Europe is very different.)
pbmonster · 25m ago
> The existing giro system is the real Paypal competitor. Most Europeans had access to Paypal-style money transfers before they had email.
Not at all, not even close! In most cases, that's wrong even today.
Want to sell something online? A book you wrote, a game you made? There's no way for people to pay you via giro and automatically receiving the good on the page where the payment process was initiated.
Giro is not instant, and almost no bank will offer an API that signals that a specific customer has transferred funds successfully. It always takes hours, and the confirmation process is almost always only semi-automatic for the seller.
Visa/MasterCard/PayPal/Twint/Tikkie/Wero have and will provide actual value. Giro was nice 15 years ago, but hasn't kept up.
And even for money transfers between two private individuals, giro is the inferior system - mainly because Euro banks fail at UX/UI. I don't know a single bank that offers an "address book" in their online banking app/website. If you want to send someone money, you better remember their IBAN yourself. And because the system comes with a degree of anonymity, you can't even send people money back! Their IBAN is not part of the metadata of an incoming transfer, the only way to send money back is to contact that person and have them send their IBAN.
rcbdev · 21m ago
Austria has the state-run EPS system. It's very ubiquitous here, I use it for most online payments.
tnolet · 16m ago
ideal will handle that. But it’s only in NL.
red_trumpet · 1h ago
> Most Europeans had access to Paypal-style money transfers before they had email.
Bank transfers were not instant though, they usually took a work day. This is changing with the introduction of instant transfers, which become mandatory to support this year, and are also not allowed to be more expensive since this year also.
alistairSH · 1h ago
The U.S. really is an outlier among developed nations in that its giro system is not widely used
I wasn't even aware such a thing existed? Or do you mean Zelle, which seems to be some sort of hybrid system... It's not quite a giro system as found in most of EU, more like "PayPal, but built by BofA and CapOne"
mrweasel · 1h ago
They never really had much of a reason to create a competitor. There where already plenty of alternatives once online shopping/payments became a thing.
Here you could do "cash on delivery", credit/debit card, account transfers (yes even across banks, it not as big an issue as US banks makes it) or you could send stamps (not a popular options).
There was never a need for PayPal or PayPal style services. These days it's safe to assume that people have a debit card (or MobilePay in the case of Denmark).
rvnx · 59m ago
The + of PayPal was in 2005 when you could use it to hide your card number from the merchant.
But now, you can generate one-time use cards, which are safer than assigning a card on your PayPal account.
The other thing, is that you can do chargebacks more easily, when you buy on eBay, but this comes at the cost of higher fees (which is basically insurance)
Other than that, it's a platform that cannot be trusted
mrweasel · 50m ago
I can't speak to how other European countries did only payments, but you never gave your credit card number to the merchant in Denmark. It was always done via a 3rd. party payment provider, initially mostly DIBS, then came WorldPay and later many more.
Charge backs was also always fairly easily done via your bank. Though you did have to call them, so yes PayPal was/is easier. I don't know, the trust in PayPal was always really really low.
nicce · 38m ago
> There where already plenty of alternatives once online shopping/payments became a thing.
Let’s say direct bank transfers are not counted. What alternatives are not based on Visa/Mastercard on global scale?
tgsovlerkhgsel · 20m ago
The "global" is the problem here.
Each country had a local solution. Direct transfers, or better direct debit, was the common way in Germany. You literally just entered your bank account number and that was payment, the seller would debit it from your account. Zero authentication, and it worked - never had a fraud issue (in the background, I assume sellers checked the delivery address against some database before accepting this, as the seller would ultimately be on the hook for any fraud).
Aside from manual bank transfers (seller ships when the money arrives 1-3 business days later) there were also two systems based on direct bank transfers. One (Sofortüberweisung/Sofort) was essentially institutionalized phishing - you give a third party your banking credentials, they log into your account, snoop around a bit, wire the money to the merchant using your credentials and confirm to the merchant that your account has enough money and the wire is happening. The other was a similar service but by the banks, so you'd log in directly at your bank to authorize the transfer.
Most other European countries had other local systems that covered this need, but there was nothing global. Globally, your best bet for small amounts is unfortunately likely still PayPal unless your counterparty accepts crypto. For bigger amounts, there is Wise and similar services (note that I've had a horrible experience with Wise - KYC asking for things that didn't exist, luckily before they had my money to hold hostage). Wiring directly to accounts with Revolut also works reasonably well.
For transfers within the Euro zone, a regular SEPA bank transfer is easiest, with the only "downside" that you need to ask for the destination IBAN rather than just a phone number or similar that some of the other systems support.
bgnn · 28m ago
Global scale is different indeed.
EU scale there are tons of solutions: iDeal (expanding to EU from NL), Klarna, sofort..
No comments yet
tchalla · 1h ago
German banks (and in general businesses) are amazing. They won't do anything until legally required to do so and even then will drag their feet. There has been instant bank transfers (transfers in 10 seconds) available for a while - launched in November 2017. German banks kept charging 1.5€ for this instant transfer or some didn't have them available at all. They didn't build any of these systems and yet this was their stand.
On January 9 2025, EU made it compulsory to have receipt of transfers instant and in October 2025 - sending too should be available at the same cost as the normal transfer. There's nothing stopping from implementing bot send/receive instant transfers in January 2025. Yet, some of these banks only enabled instant receipts in January and will make the sending available exactly on 8th October 2025, 1 day before the deadline. What a business mindset to have!
the_duke · 22m ago
The resistance against instant payments mostly has to do with technicalities around bank balance sheets and inter-bank settlement systems.
It's a bit complex for a comment, but the TLDR is:
* funds in transit (called "positive float") are held in the banks account, and can be used by the bank to earn interest
* liquidity management - there are a bunch of considerations here, but the longer settlement periods enable banks to do "deferred net settlements" (just paying each other the difference between all transactions in a batched way) and also helps balance sheets in other ways, making it easier to meet reserve requirements, smoothing out intra-day liquidity, etc
The delay also means systems have more time to catch fraudulent transactions, and to block them before they happen.
scns · 51m ago
Have used them for a long time, never paid for them. GLS is a great bank, happy customer. The crappy ones like to keep your money in their books as long as possible.
tietjens · 1h ago
Care to name those banks?
leipert · 1h ago
One prominent example is DKB (easily in the top 10 consumer banks by size)
Portugal got mbway, Austria used to have paybox, there is iDEAL, sofort.com and generally besides the local country systems with de-facto European banks you get "SEPA Instant Credit Transfer" nowadays - however IBAN is "harder" to share than lets say the phone number your friends already got.
The predecessor of Wero (iDeal) has been in use in The Netherlands for almost two decades. Nobody has credit cards here and everyone does online shopping with iDeal
Cthulhu_ · 1h ago
To add, on top of iDeal (I think they're on top anyway, they're digital payment whatsits anyway) there's an age verification system using a similar protocol - where a website gets a "yes this person is >18" signal, nothing else, from the user's bank. And there's "tikkie" (payment request), allowing people to request money through a link and people's own bank account - no need for everyone to use the same apps or services like paypal or cashapp.
weinzierl · 39m ago
Wero looks very much like a bureaucratic paper tiger to me.
I do not know a single person that uses it despite the massive advertising campaign they are running.
What really replaces Paypal in my everyday life is Revolut.
tnolet · 22m ago
Wait till you learn about iDeal. Basically flawless online payments for 10+ years in the Netherlands. Dominates the entire online and offline markets. No cards, no signups, just your normal bank account.
P.S. lives in Germany 5+ years and can attest its banks and online banking are generations behind its neighboring countries. A travesty.
tietjens · 2h ago
The product features sound nice. I'm all for anything that replaces Giropay.
euroderf · 1h ago
Finland has MobilePay, it links bank accounts to phone numbers, very easy to use.
gambiting · 31m ago
Poland has Blik, it's amazing and I wish it existed everywhere - you can pay someone using a phone number or you can generate a Blik number that you can give anyone else to request or send a payment - and it's instant. Most stores accept Blik payments, and I've paid using it in places where bank cards are not accepted or where there is no infrastructure to accept them - just use Blik.
42lux · 1h ago
It's like their 5th attempt and the naming gets worse every time.
cubefox · 1h ago
Wero seems to be a more European solution, while previous attempts like GiroPay were national.
Recently I found out that one of my friends had his identity stolen, thousands and thousands drained from his bank accounts. After thorough investigation it was traced to a PayPal breach, and he had to fight hard to get them to admit it was their fault. He got everything back, eventually, but the whole process was a nightmare.
heisenbit · 45m ago
It is worth remembering that PayPal not only handles payments but also provides a degree of assurance to receive the goods. A pure payment system does not. From a customer perspective this can provide real value as filing a claim with PayPal gets merchants definitely to listen more closely.
hirako2000 · 1h ago
What's so specific to German banks ?
n1b0m · 1h ago
PayPal is the most important online payment service in the German market, with nearly 30% of online purchases made using the platform.
The sheer volume of PayPal and direct debit transactions in Germany magnified the impact of the outage compared to other markets.
With millions of potentially fraudulent debit requests appearing simultaneously, German banks chose to freeze all incoming PayPal direct debit payments. This was a necessary step to protect their customers from what appeared to be a massive, systemic fraud event.
tgsovlerkhgsel · 16m ago
Also protect themselves (or rather, PayPal's bank). These were almost certainly SEPA debits. Consumers could reverse unauthorized transactions (think "chargeback" but on steroids - customer says to revert, it gets reverted, no discussion) and their bank would then have to try to get the money from PayPal's bank, which would then have to get it back from PayPal.
galleywest200 · 1h ago
The article is from a German publication, which is probably why the focus is on German banks.
m3kw9 · 46m ago
paypal is trash, if you have issues, they can hold your payments or does whatever they want to you and you have very little recourse. They make up all the rules as "regulations". A lot of times there is no choice but to use them.
Dealing with fraud is a red queen game: The fraudsters can keep trying until they find what gaps are there in your system, and will sometimes communicate with each other: Part of our defense system involved infiltrating some of those spaces and seeing the guides that were being sold to try to commit fraud in our platform. Meanwhile you will still have a false positive rate, and getting it all the way to zero means crazy fraud. Most people just don't get to see how much fraud is stopped before they know it exists. This isn't just for financial institutions: You'd be surprised by how much credential stuffing is attempted at, say, any very large streaming site which charges a subscription.
Without looking in, it's hard for me to say exactly how successful their security team is, but being as big as they are, and having probably thousands of people whose only job is to do fraud on their platform, winning has to be pretty hard.
I've had one since shortly after their merger from the old X.com https://en.wikipedia.org/wiki/X.com_(bank) .
Per discussions on this thread, the singular reason people have tolerated their horrid service over the years they've been an effective monopoly in many locales.
This is correct. For some reason, many people (merchants surprisingly!) love PayPal and only accept payments through it, especially those outside the US and UK. Sometimes "guest payments" aren't an option, and that means you either get a PayPal account or don't purchase the product/service.
They blocked me claiming suspicious activity occurred in my account (just a low traffic personal account). Ignoring me wanting to know what suspicious activity was it and if it needed, or actually already was, reported to the authorities.
Unluckily this deletion does not hold well, occasionally with weird merchants only offering PayPal payment - credit card through PayPal - the paying fails using my old email used in the purchase and was used with PayPal before. They keep forcing me to log in. But can't! It is deleted!
I did not trust their sloppy ways then, the feeling is stronger now.
Until that is solved, I'd argue that the benefits are not worth the costs.
Though extremely innovative (for its time), it's been a slipshod org since inception and slipshod is a property you decidedly do not want in a payments processor.
This is literally their business model, which is why they are able to get away with so many shady practices. Until very recently they held a practical monopoly on web based international payments.
Merchants are definitely selling email lists.
When my argument is kinda weak I love throwing in some hyperbole to spice it up.
yup, my paypal got locked after using it for over 20 years. Customer service refused to help and wouldn't even tell me why it was locked. I still get messages from paypal that they "couldn't get process subscription for X." won't delete my data either.
Scummy behavior from them on multiple levels.
Gave up on it after a while and now try to avoid it as much as I can. Good riddance.
> European banks have seen widespread unauthorised direct debits from PayPal accounts, the German Savings Banks Association (DSGV) says.
> The German newspaper Sueddeutsche Zeitung (SZ) says payments worth in the region of 10 billion euros (£8.6bn) have had to be blocked, after PayPal's fraud-checking system failed.
[0] I was impeded by cookie popups and adblock/privacy-mode blockers in another language, and neither are direct reports or superior details.
And when that balance is working, it kinda works, but when it doesn't...
And incidentally, it's not just PayPal with the fraud problems these days. It's everybody in the banking and payments space. AI is so far quite asymmetrically helping the bad guys more. It's bad out there.
(The U.S. really is an outlier among developed nations in that its giro system is not widely used, and many residents would not even know how to access it. Hence Paypal's network effect can offer value there. Europe is very different.)
Not at all, not even close! In most cases, that's wrong even today.
Want to sell something online? A book you wrote, a game you made? There's no way for people to pay you via giro and automatically receiving the good on the page where the payment process was initiated.
Giro is not instant, and almost no bank will offer an API that signals that a specific customer has transferred funds successfully. It always takes hours, and the confirmation process is almost always only semi-automatic for the seller.
Visa/MasterCard/PayPal/Twint/Tikkie/Wero have and will provide actual value. Giro was nice 15 years ago, but hasn't kept up.
And even for money transfers between two private individuals, giro is the inferior system - mainly because Euro banks fail at UX/UI. I don't know a single bank that offers an "address book" in their online banking app/website. If you want to send someone money, you better remember their IBAN yourself. And because the system comes with a degree of anonymity, you can't even send people money back! Their IBAN is not part of the metadata of an incoming transfer, the only way to send money back is to contact that person and have them send their IBAN.
Bank transfers were not instant though, they usually took a work day. This is changing with the introduction of instant transfers, which become mandatory to support this year, and are also not allowed to be more expensive since this year also.
I wasn't even aware such a thing existed? Or do you mean Zelle, which seems to be some sort of hybrid system... It's not quite a giro system as found in most of EU, more like "PayPal, but built by BofA and CapOne"
Here you could do "cash on delivery", credit/debit card, account transfers (yes even across banks, it not as big an issue as US banks makes it) or you could send stamps (not a popular options).
There was never a need for PayPal or PayPal style services. These days it's safe to assume that people have a debit card (or MobilePay in the case of Denmark).
But now, you can generate one-time use cards, which are safer than assigning a card on your PayPal account.
The other thing, is that you can do chargebacks more easily, when you buy on eBay, but this comes at the cost of higher fees (which is basically insurance)
Other than that, it's a platform that cannot be trusted
Charge backs was also always fairly easily done via your bank. Though you did have to call them, so yes PayPal was/is easier. I don't know, the trust in PayPal was always really really low.
Let’s say direct bank transfers are not counted. What alternatives are not based on Visa/Mastercard on global scale?
Each country had a local solution. Direct transfers, or better direct debit, was the common way in Germany. You literally just entered your bank account number and that was payment, the seller would debit it from your account. Zero authentication, and it worked - never had a fraud issue (in the background, I assume sellers checked the delivery address against some database before accepting this, as the seller would ultimately be on the hook for any fraud).
Aside from manual bank transfers (seller ships when the money arrives 1-3 business days later) there were also two systems based on direct bank transfers. One (Sofortüberweisung/Sofort) was essentially institutionalized phishing - you give a third party your banking credentials, they log into your account, snoop around a bit, wire the money to the merchant using your credentials and confirm to the merchant that your account has enough money and the wire is happening. The other was a similar service but by the banks, so you'd log in directly at your bank to authorize the transfer.
Most other European countries had other local systems that covered this need, but there was nothing global. Globally, your best bet for small amounts is unfortunately likely still PayPal unless your counterparty accepts crypto. For bigger amounts, there is Wise and similar services (note that I've had a horrible experience with Wise - KYC asking for things that didn't exist, luckily before they had my money to hold hostage). Wiring directly to accounts with Revolut also works reasonably well.
For transfers within the Euro zone, a regular SEPA bank transfer is easiest, with the only "downside" that you need to ask for the destination IBAN rather than just a phone number or similar that some of the other systems support.
EU scale there are tons of solutions: iDeal (expanding to EU from NL), Klarna, sofort..
No comments yet
On January 9 2025, EU made it compulsory to have receipt of transfers instant and in October 2025 - sending too should be available at the same cost as the normal transfer. There's nothing stopping from implementing bot send/receive instant transfers in January 2025. Yet, some of these banks only enabled instant receipts in January and will make the sending available exactly on 8th October 2025, 1 day before the deadline. What a business mindset to have!
It's a bit complex for a comment, but the TLDR is:
* funds in transit (called "positive float") are held in the banks account, and can be used by the bank to earn interest
* liquidity management - there are a bunch of considerations here, but the longer settlement periods enable banks to do "deferred net settlements" (just paying each other the difference between all transactions in a batched way) and also helps balance sheets in other ways, making it easier to meet reserve requirements, smoothing out intra-day liquidity, etc
The delay also means systems have more time to catch fraudulent transactions, and to block them before they happen.
Portugal got mbway, Austria used to have paybox, there is iDEAL, sofort.com and generally besides the local country systems with de-facto European banks you get "SEPA Instant Credit Transfer" nowadays - however IBAN is "harder" to share than lets say the phone number your friends already got.
Also: https://wero-wallet.eu/fr/utilisateurs
The predecessor of Wero (iDeal) has been in use in The Netherlands for almost two decades. Nobody has credit cards here and everyone does online shopping with iDeal
What really replaces Paypal in my everyday life is Revolut.
P.S. lives in Germany 5+ years and can attest its banks and online banking are generations behind its neighboring countries. A travesty.
The sheer volume of PayPal and direct debit transactions in Germany magnified the impact of the outage compared to other markets.
With millions of potentially fraudulent debit requests appearing simultaneously, German banks chose to freeze all incoming PayPal direct debit payments. This was a necessary step to protect their customers from what appeared to be a massive, systemic fraud event.