[s-cars] Fw: Paypal

[Kirby Smith]

Interesting.  I was under the impression that Paypal transfered money
from one credit card account to another.  Other than the float
surrounding transactions in progress, why would Paypal need to hold
cash?

kirby

Brett Dikeman wrote:
>
> At 7:10 AM -0400 5/2/02, QSHIPQ at aol.com wrote:
>
> >The advent
> >of the paypal debit card (US only) just adds icing to the cake, in under 1
> >hour, anyone can have US dollars in hand from a UK/EC paypal payee.
>
> Yes, but there's this minor little problem.  Paypal isn't a
> bank...which means they're not under a single item of federal bank
> regulations, and further, your deposits are NOT FDIC INSURED FOR
> -YOU-.  If the bank where Paypal stores your money goes under,
> great...Paypal is covered.  If Paypal itself goes under or is cooking
> the books(or has an accounting failure/problem), FDIC insurance won't
> do you a damn bit of good, because it's a pooled account, and the
> FDIC insures it for Paypal, not you.  Paypal states this, along with
> the fact that they "believe" your money is safe from creditors.  Any
> time you see fuzzy language in a legal document or PR statement,
> warning bells should be going off left and right.
>
> IF(and I repeat, IF) Paypal went belly-up tomorrow, you'd be in a
> very uncomfortable position.
>
>    Pretty unlikely(I really doubt paypal is going anywhere any time
> soon, they seem to be doing quite well), but nothing's for sure in
> this world.  The CFO where I used to work came from being CFO at a
> company that tried to do the same thing as Paypal but
> failed...probably because they didn't have a prayer with PayPal so
> well established in the market.
>
>    I don't recall the company name off the top of my head, but
> basically, a whole bunch of people lost everything in their accounts
> because the company suddenly stopped accepting transactions and
> stopped answering the phones/email; people simply couldn't get to
> their money.  Some got their money back(I think people who noticed
> things going sour and called right away did, and then they completely
> stopped answering the phones, gee, I wonder why)...but a number of
> people didn't, and the whole thing was very slimy.
>
>    At least when a bank shuts down, your deposits are insured AND it's
> YOUR account, not a pooled account that belongs to someone else(who
> no longer exists or is being pursued by creditors, etc)...with a
> private company, all bets are off; sure, they might break laws and
> get caught, but you'd never see your money again.
>
> Brett
> --
> ----
> "They that give up essential liberty to obtain temporary
> safety deserve neither liberty nor safety." - Ben Franklin
> http://www.users.cloud9.net/~brett/
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