
Short-term Profit Taking vs. Long-term Value Creation: The Future of PayPal - nikunjk
https://www.linkedin.com/today/post/article/20140305203327-1213-short-term-profit-taking-vs-long-term-value-creation-the-future-of-paypal?trk=nus-cha-roll-art-title
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IBM
I find it amusing how VCs and other Silicon Valley types are rushing to the
aid of one of their own now that a perceived interloper is around.
Characterizing activist investors as "short-term" and "vultures" is _the_ go-
to card by management trying to fight off an activist. Carl Ichan is even
easier to demonize. However, these claims don't stand up to scrutiny.

[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2291577](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2291577)

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product50
I agree with you. Especially considering that Carl Icahn has such an excellent
track record of building great companies in which he has invested for long
term.

Just read about Carl Icahn first before commenting.

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IBM
Sure, the business he's built is an incredibly successful fund. From IEP's
quarterly results:

>An investment in IEP stock made at the beginning of 2000 has increased by
approximately 1,500%, or an average annual return of 22%, through October 31,
2013. But perhaps more compelling is that since April 1, 2009, when the
economic recovery started: 1) an investment in IEP stock resulted in a total
return of 347%, or an average annual return of 39%, through October 31, 2013,
and 2) IEP’s indicative net asset value has increased during this period by
282%, or an average annual return of 35%, through September 30, 2013.

Or is that not a real business in your eyes?

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jotm
Oh, God, a Visa-owned Paypal... They'd ruin it in less than a year.

Paypal is the best option for small and medium size online transactions at the
moment.

Amazon, Google, Apple, and Square all want to own the payments space, and
Paypal is still the only one that actually works _worldwide_.

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sdrothrock
> Paypal is still the only one that actually works worldwide.

Speaking someone in Japan, it's pretty hard to effectively use Paypal here
because it requires (requires!) a credit card. Also, nobody uses it here, so
there's no point in jumping through the banking rigamarole to get a working
Japanese Paypal account.

I think Paypal never took off here because it's amazingly easy to just send
someone (anyone) money very quickly from an ATM as long as you have an account
number.

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calbear81
Does PayPal require a credit card to use in Japan? It works fine with bank
accounts and credit card is an option (with a fee).

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sdrothrock
I could have sworn the last time I tried (I admit that this was half a decade
ago) that I decided it was unusable because it required a credit card to do
anything and I couldn't get one as a low-salaried foreigner on a short-term
visa.

I've been using my US PayPal account all this time -- which actually works
better since everything I use it for is in the US.

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com2kid
It is amusing to read an article proclaiming PayPal's advances into the mobile
space. Stripe seems to dominate in this area. Card readers hooked up to
iPhones and iPads are everywhere. Around the world a multitude of other mobile
payment solutions have taken hold.

PayPal? Well they have managed to ruin their reputation. Heck their entire
customer experience is spammy and creepy, with constant requests to have
direct access to my bank account.

IMHO PayPal also lost the opportunity to become the micropayment processor on
the web. It is funny that it is possible to do with technologies like dogecoin
what PayPal disallows purely through its high fees.

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secabeen
It's not Paypal that's generating the high fees. That's the credit card
processors. Paypal is happy to perform totally free payments for transactions
that are funded by low-cost sources (bank accounts/ETFs and Paypal balances)
and which need no fraud protection.

The problem is that the credit card processors take 2+% of _every_
transaction, and no company can succeed if they eat that cost. This is
particularly so because saavy cardholders will engage in airline mileage and
points arbitrage if you don't pass on that cost.

Are any of the Paypal competitors offering services that don't include credit
card fees, either on the merchants or the customers? Paypal is making those
fees visible, but they're not imposing them.

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toomuchtodo
> Paypal is happy to perform totally free payments for transactions that are
> funded by low-cost sources (bank accounts/ETFs and Paypal balances) and
> which need no fraud protection.

Doesn't Paypal still take a fee if you pay for a commercial good or service
and use your bank account? And its still the same as the CC processor fee?

> Are any of the Paypal competitors offering services that don't include
> credit card fees, either on the merchants or the customers? Paypal is making
> those fees visible, but they're not imposing them.

Dwolla, but they're in a grey area of sorts.

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secabeen
Late response here, but you are correct that paypal always takes a fee for
commercial transactions disclosed to paypal. Their argument would probably be
that they require commercial transactions to have fraud protection. That said,
there are areas where very small businesses use fee-free Paypal for commercial
payments by disguising them as personal payments. (Used camera gear is where
I've personally seen it)

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ForHackernews
PayPal is so terrible. The sooner Stripe (or anyone) kills them, the better.

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Cless
> So, what conditions will best help PayPal continue to grow its user base,
> increase revenues, and bolster its profit margins on a consistent and
> ongoing basis?

Well, on the last two: freeze all user accounts, confiscate the funds
contained within, make charges of $5000 to each credit card holder, and
justify it by linking to your terms of use.

You know, PayPal.

