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PayPal CEO writes personal response (ndy.gd)
619 points by Peteris on Sept 8, 2012 | hide | past | favorite | 159 comments

The level of discourse on HN lately is absurd. Here is a new CEO that appears to be looking to change things for the positive, yet everyone wants to be cynical and doubting. Yet when startups have major f* ups, the conversation is much different.

Lets all admit change is slow and that paypal is still one of the more trusted payment solutions accepted globally. It would be nice to be able to use them in the future with some continued reliability.

The skepticism about PayPal is well founded. PayPal has rightfully earned a reputation of imposing arbitrary decisions on account holders. Maybe if PayPal was more transparent and actually provided some semblance of customer service their decisions would appear more fair.

While its nice that the CEO has personally responded this actually shows a far greater dysfunction. Why should it take escalating all the way up to the CEO level to get someone at PayPal to listen and advocate for the customers position?

The contrast with startups is misleading. PayPal has been in business for a long time and is a billion dollar company. They have the resources to stop making stupid mistakes, but still persist in their bad behavior. They can get away with this because they've cornered a large part of the online payments marketplace.

Sure, a startup is going to make mistakes. And they're expected to. That's all a startup is really - a machine that generates mistakes in an attempt to find (or build) a profitable market.

Yes did you miss the part that they brought in a new CEO to bring change. Lets just blame everything thats happened in the past on a guy who wasn't even on the job. Blaming mistakes on lack of resources is a little naive.

Well put ... PayPal has some housecleaning to do but here is someone that appears to be listening ... listening in a big way.

I give PayPal credit for this response. Rather than being cynical, I'm happier giving credit to someone who wants to make things better.

Mr. Marcus - some of us appreciate your efforts here.

You are forgetting one thing that was previously stated in the comments: this isn't Paypal responding through their normal support channels.

This is a fire-fighting attempt from the CEO of a company that snubbed the people they should live off of, prompted by a bigger than average shitstorm created by their persistent crappy handling of accounts.

Think of it this way: suppose Mercedes went around, burning the cars it sells to their customers - much to their chagrin - and one of the customers creates a big enough fuss for the CEO to come and personally give him a new car. Is that an acceptable handling of the situation in your eyes?

A CEO is a pretty busy person ... when one responds (no matter how it was escalated) it says something about his/her viewpoint.

Many CEOs would hand this off to their customer experience personnel (if they have some still) or maybe marketing department.

This was not a manager's or director's reply though. The wording indicates someone (relatively new to this president's post) who appears to see that change is necessary. He understand that his offer may not be accepted (he get's it) and still offers a direct link to himself.

I don't read this as a PR ploy or gimmick.

If a CEO offered someone a new car PLUS their ear, I'd be watching for changes. PayPal didn't burn everyone's car. Enough damage was caused to affect the brand though. If I was one of the affected, I'd be watching for more action.

I feel that the response was appropriate. There is something in the wording that gives me hope. Maybe I'm just being naive.

I'll watch to see how things turn out though.

Practically every major company has a corporate/CEO escalations department that tries to put out fires that their typical customer service path fails to fix. This isn't a novel approach.

PayPal has a notoriously bad customer service reputation. It's going to take more than a typical CEO apology letter to really fix the issues that are embedded within how PayPal operates. The fact that a CEO has to issue such a letter indicates there are problems that probably aren't going to be easy to fix.

Executive escalation departments are not the CEO. I served some time in customer experience before going into quality and then PM. UE and CE are very important to me. This letter does not have the ring of a typical escalation path.

Either he discovered the issue on his own or someone else within PayPal escalated it to his attention. Either is a good sign. The former path indicates a CEO who is actively listening to users and is deliberately making time to gather user feedback outside of normal channels - a very good thing for any CEO worth their salt. The latter indicates that someone else within PayPal or closely tied to PayPal had the good sense to escalate it to the CEO's eyes - that person deserves a promotion (he/she probably has some relavent skills that PayPal really needs at the moment).

I just don't see this as a typical CEO apology. It's personal and the wording actually suggests something more than a typical CEO response - I've seen a few.

No one should be getting kudos or promotion over recognizing an internet shitstorm because people A) didn't do their jobs or B) did their jobs as usual which caused said shitstorm.

It's like a bully saying he's sorry only when your bigger brother shows up to defend you.

He (the CEO) didn't have to respond at all. But he did. How 'bout we all give him the benefit of the doubt.

Sure, I'll give him the benefit of the doubt. But I'm not risking getting my funds frozen in he meantime! I won't be using Paypal for business sales.

What about the Yahoo! transformation currently being led by their new CEO, Mrs. Mayer? My view, and most of the things I've read about the Yahoo! situation is that people are generally optimistic about the change in leadership and feel that she is not only talking the talk, but walking the walk.

I don't have the same confidence in this type of change happening inside PayPal and I'm not sure why. Maybe its because, as a financial institution, I view it as a very "corporate" entity that resists change. Whereas Yahoo! is, in my mind, has a "hacker" feel that recognizes the problems and really wants to make things better. I guess I have more faith in Marisa and the kind of company that I know Yahoo! can become, whereas I've already written off PayPal as a necessary evil that can/will be replaced as soon as possible.

For the moment all this means that a high-profile person got his funds unblocked and has a direct communication channel to the CEO. Meaning he's pretty much back to where he was before PayPal set him back.

For my personal blocked account, it means exactly nothing.

Over the long term that may not be true. FTA: "I'm going to use your story to radically change how we deal with holds, and customer service"

It's going to take some radical change to alter current perceptions of PayPal, but it may be possible.

I think its good that a CEO steps up and reaches out to customers, but many people have had bad experiences with funds being frozen on PayPal along with their terrible phone support, and things like that never get forgotten. I get the impression that addressing fraud on PayPal's global scale is very hard. But they could make things a little more bearable by training their phone support people to be at least a little more polite and customer-oriented.

First off, I agree. However there is a difference between a new player tripping at a hurdle and an old hand making the same mistake. There is an expectation (by me at least) that tricky situations have been encountered by large organisations before, and that a combination of institutional knowledge and good systems prevent problems escalating. New businesses deserve (I think) a little more leeway.

This isn't special... Yet. What happened here can happen even in the most dysfunctional customer service paradigms. A promblem randomly and luckily escalated from the people who can't do anything about the problem to the people who (generally speaking) won't do anything about the problem. As a lucky break, the person/department who generally won't do anything, decided in their mercy to do something this one time. IMHO, what was said in the email is just marketing duck-speak, no matter how sincere it sounds until proven otherwise.

The true fix, the actuall turnaround, is when the ability to actually fix problems like this is systemically extended deep into the space previously occupied by the employees who couldn't fix them before.

"IMHO, what was said in the email is just marketing duck-speak, no matter how sincere it sounds until proven otherwise."

I agree that this looks like a PR stunt, but it also shows some potential changes underfoot at Paypal.

Here's my read of the situation: Paypal has been known for being beauracratic ever since the eBay acquisition, when all the smart people left and the bozos and middle managers remained. You know the type of place and the type of people it attracts: it's the smooth-talking-but-not-that-bright individuals who do well, and any smart employees who perceive the real problems the company is in find themselves a part of an outcast fringe.

Don't tell us we have bad customer service issues; expressing that kind of negative attitude is not going to impress senior management, what with bonus season coming up. Stripe and Square are just dipshit startups that no real business will ever use. La-la-la I can't hear you.

It seems someone at eBay finally realised PayPal was going to be "disrupted" if it didn't get a leader with their shit together. This new guy seems competent, but steering a big lumbering ship like PayPal away from its death course takes serious political/organisation-hacking skills, no matter how big the icebergs loom.

PayPal's reputation is so deep in the dirt that nothing any one at the company says will bring it back above ground. If someone says "we are changing X" and the changes actually happen, then eventually, over the course of time, Paypal's goodwill may return.

You're really overstating how "deep in the dirt" PayPal's reputation is, though. Some developers complain very loudly about PayPal, but just about everyone else continues to use the service.

They remain an interesting choice for anyone starting up a business that takes money online -- I have a business that I've partially migrated to Stripe (and I'll finish that up soon), but for about 9 YEARS before Stripe came along, every year I'd evaluate the available options for accepting payments, and come back to PayPal each time.

They certainly have trust and customer service issues -- and I've never allowed more than a few thousand to accumulate in the account for that reason -- but I have to admit I've only had technical problems with maybe 2-3 payments over those 9 years, never had my account locked, and generally just benefited from the flexibility and good rates.

My impression is that overall, they still have a middling to good reputation. Especially if they can fix the glaring problems remaining, I don't think they'll have any trouble staying strong for a long time.

Uh, you consider them to be something of a necessity, but you try to keep as little money as possible in the account because you fear your account will be frozen. I'd not say that they have "a middling to good reputation" - I'd say if that's what someone who speaks of them well thinks, that's an appalling reputation!

"it's the smooth-talking-but-not-that-bright individuals who do well, and any smart employees who perceive the real problems the company is in find themselves a part of an outcast fringe."

Extremely well said and sadly often true.

Yeah at the wrong companies it does definitely. You can bullshit your way in/out of anything, especially in big companies. Just find another job if that happens; if you are really smart and competent, there will be no problem finding something which does fit. Don't stick with elbowing morons, ever.

^^ Well said, my friend. Well said.

Maybe I've just been suckered in by his smooth-talking ways, but there's an earnestness to this guy that I didn't expect.

> It's the smooth-talking-but-not-that-bright individuals who do well, and any people who perceive the real problems the find themselves a part of an outcast fringe.

Change a few words and it can also apply to a "scene."

>> This isn't special... Yet.

Respectfully disagree. CEOs of multi-billion dollar publicly traded companies do not routinely reach out to disgruntled customers, no matter how public the PR disasters. Twitter has been very effectively leveraged in the past with various underperforming companies, however IIRC all of those cases were delegated to customer service / marketing personnel.

While you are correct that this intervention bore many of the hallmarks of a PR effort, the scope is unusual. While I am happy to be proven wrong, I would certainly be very surprised if anyone could dig up multiple examples of similar behavior on the part of a President/CEO or even any C-suite executive in a company of this size.

TL;DR: Personally looking after an account and handing out a cell phone number is not business as usual. There may be an element of PR, but it is quite proactive by most standards of measure.

This will prove to have been special only if it eventually proves to be normal, i.e. PayPal loses their reputation for opaque holds.

CEOs, like anyone, can lose interest in anything, due to lack of commitment or competing priorities. And no CEO lasts forever; the next CEO might not care as much as PayPal in the large currently doesn't care.

And an incoming CEO is not superman, it takes cooperation from below.

Good luck, hope it works out for them.

I disagree.

I had the honor of actually having a direct email exchange with Steve Jobs in the context of difficulties doing business with Apple. In a last ditch effort to solve the issues I decided to email Steve. I had never done that before. While I was convinced that it was pointless, I did it anyway. It was three in the morning here in California. I was programming and shot off a two line email not saying much more that I needed help resolving a business issue with Apple.

Fifteen minutes later I get this:

  What's the problem?

I must have stared at that email for an hour. Not sure if it was a hoax or the real deal. I wasn't even sure that I had the right email address.

I replied anyway.

The next day I got a phone call from a high-level VP who had been asked by Steve to personally look into the issues. This led to many meetings and even a couple of trips up to Cupertino to meet them all and discuss further. The problem was addressed to everyone's satisfaction.

Having the CEO of a large company take the time to take personal ownership of an issue is special.

No, not a PR stunt. As a new CEO in an organization, it is difficult to get access to the kind of data and examples you need in order to create change throughout the organization. I've seen this first-hand advising new CEOs on their first 100-days as a consultant (before I started my startup). Good new CEOs will often try to find customer stories which capture the specific problems they're trying to fix, and use those stories to champion change. Frankly, this is pretty similar to a tactic used by politicians to illustrate their policy proposals with individual human stories. Marcus needs those stories now to create change in the company.

My hat goes off to Marcus, and I'm a bit surprised at the pessimism from HN. Tilt at windmills much?

Not tilting at windmills so much as a 'fool me once' wariness. But you're right, good leaders seek out customer stories in their own words and try to start conversations with those customers so they can hear the good and bad from the source. Otherwise it's all filtered by people trying to cover their butts.

It is special that the CEO responded AND put his reputation on the line by saying he was going to fix this.

If he doesn't fix the problem, in a few months he's going to be inundated with blog posts saying "David Marcus promised this would be fixed and it isn't".

So he's set himself a very public (and difficult) challenge, and I respect that.

To be fair, the CEO didn't publicize his response -- the customer did. But the cat's out of the bag as a result.

The thing is, this "fix" only came about outside of their entire customer service mechanism (AFAICT). How many more disenfranchised customers are going to get "a direct line" to @davidmarcus? My guess is "none."

This is a pure PR maneuver. The proof is in the pudding.

The idea is that Paypal will use this to event to understand how their systematic mistakes, and to fix them. That way, others won't need a direct line to the CEO.

Of course, they should have developed mechanisms to take customer feedback seriously before.

And they should have fixed this long ago.

But there's nothing wrong with learning from your mistakes so as not to repeat them.

Nobody's saying that "learning from your mistakes" is wrong. How do any of us know what "the idea" of this is, whether we'll hear anything more at all after this one person is taken care of? The funniest thing is that for all of the years that PP "should have fixed this long ago," this one event is what is to be used to understand their problems? What happened to all the other years? What happened to paypalsucks.com? There's are extensive lists, continually updated, of incidents like the one in this story.

The only leeway I give them is openness to the future, but from the past to the present, they are a seriously bad company for entrepreneurs. A business owner literally cannot know whether they'll be caught up in PayPal's various harmful practices, and this message from an executive is the smallest Dixie cup of water given to a one of a hospital full of burn victims.

Even the email says that this is only the first step.

Which leaves us only to assume there will be a second step.

I am always wiery of these maneuvers because they can swing both ways. I must say, good for the CEO to response; smart man who realizes the company is going to get hit, hard, and soon.

The only question left is: to trust or not to trust?

Let's see if PP makes any official announcements on policy to combat this.

> The only question left is: to trust or not to trust?

RTFE. This entire thread is basically regurgitating what was already said in the email. It already says they hope to win back trust, but with action, not words. To trust or not to trust?

Email makes that very clear: wait and see what they do.

"Truly I tell you, whatever you did not do for one of the least of these, you did not do for me."

Not necessarily. Between writing that email & it being publish that CEO is now very much committed to this since its his reputation on the line now. He said he'll get it done.

Unfortunately there aren't a whole lot of details in the mail that one can call the CEO out for if it doesn't happen but its a good start and in my opinion more than a PR stunt.

That isn't necessarily true. He recently responded to another currently popular Paypal thread here on HN: http://news.ycombinator.com/item?id=4485627

Here is what I would do... I would take him up on his offer (personal attention from the CEO? Sure!), but I would ask him whether he'd be willing to pick 3 or 4 other customers who had _NOT_ written an article which had gone viral and offer THEM the same deal.

I want this to be true. I want PayPal to believe that this behavior is harmful to their business and to push (at ALL levels of the company) to change how they treat their customers. But I won't give them the benefit of the doubt based on one message from the CEO. They burned their second chances long ago, and it's much harder to regain my trust after losing it. I hope that they do.

Ooh! Ooh! Pick me! Pick me! I had 20K removed from my account without an explanation and even hired a lawyer, all of which went absolutely nowhere.

This is all a bunch of baloney. If PayPal was really serious about fixing all the pain and misery they caused, they would create a direct line of communication where those on the other end were empowered to resolve all problems ... instead of giving a curt "send us a letter".

Until PayPal starts working with their customers and stops treating them like criminals, I'll take my business elsewhere.

How do you think a mechanism like that gets created?

Do it in one go and you're talking a department of tens or hundreds of people, most of them newly hired. Turn them loose without careful thought and at the very least you create massive chaos in your organization. But you also probably create substantial losses as fraudsters use the chaos to take a lot of money.

I think the only way you can get to the customer service experience you want is by starting with one customer's problems, solving them, and then changing the organization a bit so it's less dumb. Then you rinse and repeat for years.

It's an organization of thousands of people across the globe, with a zillion lines of code and, a ton of procedures and habits, and a lot of institutional inertia. The way to solve it is by starting now in a manageable way, and that's what he claims he's doing.

Yep. It's called "drill-down teams" or "tiger teams", and it works.. use your back channels to discover what's wrong with your front channels.

I've seen it work. Hell, I've helped it work. This is a good sign.

"You now have my mobile number"

How much more direct communication do you want?

I don't have his mobile number. What does that do for me and for thousands of others who have been screwed over?

Hello Mr. David,

We all want your mobile number. I have a 1000 angry friends who want to personally talk to you.


Totally agree. And make another blog post to state that PayPal has 6 months to shape up or you're done for good

From the skepticism here, it's clear Mr. Marcus has his work cut out for him. Even with far fewer people ever reporting to me (directly and indirectly) than him, I sympathize with his inability to get the unvarnished truth from his own people. "We're routinely screwing people out of hard cash" is probably a scary message to relay up.

His email sounded sincere, and he's new to the job. I'd be inclined to give him the benefit of the doubt. He must know that the technorati hating his company is bad for business.

They have their work cut out for them indeed, but it's of there own making. They should have been looking at systemic issues when the Minecraft founder couldn't get access to his account for months, when their customer service advised someone to destroy a perfectly good violin due to "fraud", apparently mass payment doesn't exist even when it does [1], numerous reviews in magazines such as PC World [2] and Kernel Magazine [3], and an entire website devoted to how bad they are was established from pissed off customers [4].

PayPal are in big trouble. It's going to take more than platitudes to get them out of it!

1. http://christianowens.com/post/15771850658/my-recent-experie...

2. http://www.pcworld.com/article/101525/consumer_alert_paypals...

3. http://www.kernelmag.com/comment/column/2978/paypal-still-su...

4. http://www.paypalsucks.com/

In all fairness, they have a new CEO. Maybe that is their way of looking into systematic issues...

> Maybe that is their way of looking into systematic issues...

If true, they are doomed! New leadership is the Hail Mary toss, not the way you solve problems.

It worked for Apple

Yes, that was a Hail Mary toss that worked. The question is, is the new guy of Steve Jobs caliber, or is it a shyster who can only sell himself as such? (I hope he is.)

The new guy is the desperation move, not the way an organization should solve problems on a regular basis.

It's not hard to make an email sound sincere, especially when vetted by a PR agency.

I suspect no PR involved here - that email is repetitive, not polished, and feels like a new CEO trying to do the right thing and light a fire.

I work at Paypal and can confirm this is definitely David Marcus. He really shoots from the hip with communications, internally as well as externally. (He has sent the internal version of this message to the public: "guys, we are getting our asses kicked, we need to rally and change the way we do things".)

I pretty much agree with him. There is a lot of fresh blood trickling in from the top over the past year or so. Time will tell if the new leadership can empower the marginalized, scattered, and demoralized minority of good engineers at Paypal.

In this case, I'd suspect that lighting the fire should be the first step to burning most of the customer relations department. I'll trust Paypal when I feel the smell of burning corpses from their offices.

I would rather they fire anyone who thinks the profit they have made off interest from frozen accounts is a good thing. It is just as despicable as car companies making money off their service center.

I would really like them to make a policy change that any money collected in interest off frozen accounts is given to the account holder after the freeze.

Earning interst has ZERO to do with account freezes. It's all about protecting funds from theft.

Yes, I realize that is the reason it is done, but I will bet someone in PayPal has a nice spreadsheet of how much money they have earned on money that is sitting in an account without being accessible.

Step one for PayPal would be to always provide a reason when they take action, for all users. Every bad experience I have had with PayPal began with them doing something negative, and never explaining why they did it. I have had methods of payment locked out, I have had funds not released, I have been told I could not make an instant payment, and not once was I given a reason why.

I agree that they should always try to give you a reason. But that's not as easy as it sounds.

Put yourself in the position of somebody who is trying to commit massive fraud. E.g., by purporting to sell a bunch of stuff on-line. Every bit of information you have about how PayPal combats fraud is helpful. Every time PayPal gives somebody a reason, it helps fraudsters avoid that particular wall or trap, letting them probe the defenses elsewhere.

It's a hard problem. PayPal solved it the wrong way, but they'll never get to full transparency.

>it helps fraudsters avoid that particular wall or trap, letting them probe the defenses elsewhere.

Couldn't you say make the same argument of proprietary vs open source software?

Yes. Does that make it untrue?

Not at all, but wouldn't the benefits outweigh the risks? Security by obscurity really isn't security at all.

Security by obscurity is very, very effective in the short to medium term, especially you're paying attention to people hacking around it and are continuously evolving your defenses.

Also, they've intentionally chosen a domain where full security isn't possible, mostly due to circumstances outside their control. Remember, they captured a huge new market mainly through the sophistication of their anti-fraud systems. So security through obscurity has to remain a major tool for them.

Try asking your regular bank how their fraud detection works, or your insurance company, or the secret service.

Basically if you work in fraud detection (or broadly any kind of crime detection) you keep your techniques secret because otherwise you're helping the criminals avoid you.

Look at the source code for Reddit or Hacker News, notice how in the publicly released codebases they've both chosen specifically not to publish the code to do with vote-rigging detection.

There's a strong argument for secrecy.

The security by obscurity approach usually give you only an ILLUSION of security

Security has nothing to do with fraud. And in combating fraud, obscurity works. SSL is security, but it's meaningless if the site you just sent your CC data to is fraudulent.

Then, you need to understand how open PayPal is to fraud. I can easily commit major crimes using PayPal, and security has nothing to do with it.

This is the challenge they face. If you think it's an easy problem to solve, ask yourself: why is there no one else out there doing this same thing? Why are all the other supposed opponents limited in such drastic ways that PayPal is not?

I'm not suggesting they are perfect, but your trite remark is meaningless and ignorant of the realities of the system.

Yes...once they figure it out, you still need to change your spam filtering/fraud detection methods. But if they have the algorithms, then they can figure out how to bypass it offline, on their own hardware, and you'll never now that it is happening until it is too late.


Also don't want to help competing services.

Another data point - spammers used to check their work against spam assassin, fine tuning them.

Another data point - leaked password databases are a source of heuristics for generating word lists.

PayPal is second only to the TSA in reflecting the futility of asking for such things.

Why now? Why with this story?

I've been reading similar complaints to that for years. Some of which were far worse in my view (i.e. taking money out of banks to repay people who weren't even seeking a refund because PayPal changed its mind about someone's product or service).

Why does PayPal suddenly care? Is it because there is viable competition now?

Classic case of someone who just can't win whatever he does. People have been crying out for PayPal to change - he notices this, he emails the guy with a first class email but still gets criticised. Criticise him if he doesn't act, don't criticise the guy for being big enough to say 'hey, we have a problem, I want to fix it' - that should be applauded, even if it's come later than people would have liked - at least it has come.

Honestly, that's the job he took.

Apparently he was ok with that, and I'm sure he's being well compensated for it.

PayPal has built up a lot of ill will, and no, it doesn't just go away with a promise to change. It is in fact going to take time.

Let's keep in mind that this offense just happened. It's not the distant past.

Oh come on. He can't "win" by solving one person's problems. Will he give his personal email to everyone who has got his account frozen or large chunks of money taken away by PayPal? I doubt it.

This is a non-solution, which is almost worse than doing nothing at all, because it's active disingenuity.

Did you read the same note I did? He says explicitly that he's new in the CEO spot and would like to use this story as a tool for redoing how they handle holds, and how they deal with customers.

You can't win by solving just one person's problems. But you also can't win unless you start by solving one person's problems. And then fix the system, so that the kind of problem is less likely to recur.

This, IMHO, is exactly the right way to do it. As contrasted with the wrong way, which is for employees to sit in their comfy offices and avoid all direct contact with customers, making up bureaucratic solutions to imagined problems.

Ok, so how do you fix many people's problems without first starting with one?

We must see the first step. He is trying to stop the bleeding. My guess is that the signs are there that the bleeding has started, it just hasn't hit mainstream yet.

Looks more like he is trying to buy direct outside expertise and opinion, without it being filtered through the company, in return for personally looking after this account. The problem from there on in is whether that person can actually continue to be useful as they will no longer be having the experience of a normal customer and might start being less critical in their approach. Picking someone who is absolutely furious probably helps in this as they are likely to be very upfront about their experiences.

I agree, that people should give him the chance to fix Paypal if he wants to try. There is always a starting point for change and if this it, he should be applauded and not ridiculed.

"Real bad boys move in silence" --KRS One

It says right there: "I'm driving a lot of changes at PayPal (I took over 5 months ago)"

But 5 months is a long time. Why only now? Surely there have been high-profile cases whose media frenzies can be capitalized on before now.

I think you're both underestimating how long it takes to really get settled in and take charge of a huge corporation, as well as overestimating just how long 5 months really is.

Seems like about the right amount of time for him to start really kicking things into high gear imo.

Not for the CEO of a big company like that. 5 months is barely enough to get the lay of the land. The press may have you believe otherwise (e.g. Marissa Mayer is changing Yahoo overnight). It's a more interesting story than "she's slowly getting to know how things work while trying to fix the most obvious and visible disasters."

If I had to guess, I'd say because it took the ceo a few months to see how things are currently done and identify problems. The rest of the time I guess would be waiting for the right case to come along.

Five months may seem like a long time, but trying to fix something that's pretty broken probably requires a bit of time to understand just what the hell you're trying to fix.

"I can run a 3 man startup and change things in a week! Why can't a public traded company worth billions with thousands of employees change things in a week?"

Check your ignorance and entitlement at the door, please.

Not to mention that any changes they make have to be proven not to expose them to the banking laws that they've been assiduously avoiding, and that would provide the kinds of protections that the general population expects.

They can't escape these laws on Australia as they are a financial depository institution regulated by APRA. Should they try to deny an Australuan their money like this, they will be in a world of pain.

Hey, I'm an Aussie using PayPal and this is the first time I've heard of this. Where can I go to read more?

Authority is here:


They are classed as an ADI, which means banking rules applies to them.

disclaimer: I work for eBay Inc.

David Marcus was CEO of Zong, a small mobile payment startup who got bought by PayPal last year. When buying the company, the CEO of eBay Inc. asked him to change quiet a few things in the company culture. This email is one of the first step to improve customer service. Will he succeed I don't know, but you gotta give him the credit of trying.

eBay is even worse than PayPal! If he can fix PayPal, he might want to try his hand at the owning company...

He said he just took over 5 months ago. He's probably just finished filling out his w-2 and selecting health insurance :)

If even a modicum of this attitude can seep down into all of the customer facing departments at PayPal, it'd be an awesome thing. I hope they pull it off.

Actually it would be 'life saving'. One of the reasons the payments space is flourishing is because PayPal has been a poor service provider (creating pain). And it has to come from the top, and you have to look into success metrics carefully to insure the folks in your organization aren't doing more harm than good to get 'good' ones.

Agreed. I hope the policy and attitude can change. I do a lot of business with PayPal because my customers prefer it. Certainly not because they have provided much value other than being the most commonly used service.

So bloggers with enough pull to get the CEO's attention will no longer have their funds stolen by PayPal. Now how about the rest of us?

I realize you are being cynical, but the e-mail says the CEO wants to make radical changes to fix issues for all customers. I'm a bit skeptical myself, but if we take him for his word this isn't just for a subset of users.

I think notatoad is being realistic. People with large audiences get things fixed, they get the resources, and the rest of use get ignored. No one will write an article about notatoad or protomyth getting hosed.

I hope Paypal can get it together, but I live in fear of getting hosed by them without any recourse.

I'll admit that it's better than PayPal's previous customer service policy of "fuck all y'all", but I'm not changing my opinion of the company based on one email from a CEO in full damage control mode.

Great email.. one of the most convincing and sincere high level apologies I've read. Perhaps, for once, the future is looking bright for Paypal. I could have done without the "forwarded from my iPad" at the bottom though.

For what it's worth there are no occurrences of "sorry" or "apologize" in that letter.

Perhaps one of the reasons PayPal is being more service conscious is they finally have competition encroaching on their territory like Stripe + Square.

I guess its never too late to stop sucking though.

> they finally have competition encroaching on their territory like Stripe + Square

And bitcoin. No matter how PayPal tries to put the kibosh on selling PayPal for bitcoin, people will still find a way around it.

I no longer use PayPal after their first and only abuse of my account. They had one chance and I found better solutions. That the CEO is sending out emails to high PR value customers is a very telling move.

While the CEO has only been onboard for 5 months now, these kind of issues plaguing Paypal have been there for years now. I remember a good friend of mine had his Paypal account frozen a few years back because they thought it was suspicious he had received money so quickly (he was selling a popular marketing eBook). After making him jump through hoops to get his money (identification, financial records and scans of his passport, etc) he finally received the cash 7 months later, by that stage he was ruined emotionally and financially due to the fact it was his living (he couldn't pay bills or anything).

While I applaud the new CEO wants to make amends, for some like my friend who relied on Paypal to make a living by processing his business payments it's a little too late. Although Paypal is still the industry leader (because they have a stranglehold on online payments) the new CEO knows that offerings like Stripe and whatnot are making Paypal less and less relevant each and every day.

I would love to see Paypal change, the first thing they need to do is fire all of their customer service staff and train new staff with a new set of guidelines, implement a clean-cut way of contacting Paypal if something goes wrong and clean their act up.

In the previous post David replied to the comment (on HN) i made about wanting to change paypal's generic template to increase sales through a/b testing.I had a rant about paypal's api suckness and i also ranted about how draconian the fund freezes of diaspora and wikileaks were.

He said that he understands and told me to send him an email and we will take care of it. No email was sent yet as i'm afraid i'll be targeted in the future. I can't put my legitimate digital business at that risk - there are tonnage upon tonnage of forum threads over the web of people's business going under because of pp freezes only because they contacted paypal it's heart breaking and too much of a red flag to me.

The only thing i can say about David is that he looks and sounds like a genuine guy who replied and started a discussion with the community and that as we all know goes a long way. So maybe his intentions are good but will paypal have zappos's culture regarding merchants all of a sudden? i doubt it and you all doubt it too because what matters is implementation ie real life.

Credit where it's due: out of all the hundreds of Paypal horror stories, this is the first time I have ever seen a reasonable, let alone personable, response come from that nebulous digital beast.

Fair play to the new CEO, he has won back one notch of respect and hopefully averted the slow motion train wreck that had probably already started at Paypal.

It's fantastic to see PayPal finally paying attention to these kinds of nightmare stories, but it's hard to believe it has anything to do with altruism.

They are seeing Stripe, Square, etc getting way more mindshare, and they are scared.

With all due respect PayPal, good riddance. You've sucked too hard for too long, and now we finally have alternatives.

Why now? Why this situation is it finally hitting home?

What confuses me is that David acts as if these are new stories of accounts frozen, staggered access to money, and blocked recourse to customer chargebacks. This has been happening for years with hundreds of publicly written stories of bad will by PayPal.

The email mentions that this CEO took over only five months ago.

Media storm brews, someone high up responds and resolves issue. Nothing new. It'd have been news if a random support person did the right thing.

Posting screenshots of text instead of text make me sad.

It excludes visually-challenged people from this discussion, makes old people get out their glasses and squint, and makes cutting and pasting impossible.

Not to mention random emails about stuff with no attached context.

Why does it take a story to make it to front page Hacker News to get attention, to get a "direct channel" to the executives when things go wrong? It ignores the all the horrible complaints and stories from everybody else. It's inequity in itself when the only way you will get attention from big companies is from making posts on Hacker News.

Why are they not paying attention to their other day-to-day customers? What kind of business do you intend on building?

Requiring personal supervision from an executive to withdraw funds is a negative against PayPal, because the president isn't going to personally supervise every account).

It's good that this executive (President, not the CEO as indicated in the title) is taking initiative to fix things at PayPal. But until things are fixed, PayPal is still a business risk.

Requiring personal supervision from an executive to withdraw funds is a negative against PayPal, because the president isn't going to personally supervise every account).

True, but as you note in the second paragraph, this is still a major improvement. I stopped using Paypal a long time ago because of an utterly typical story: https://jseliger.wordpress.com/2011/12/09/december-2011-link... and have been encouraging other people not to use Paypal ever since.

It's almost impossible for Paypal to be worse than it is, and it might even get better.

Seriously, fuck them. They're starting to act like they care because there are new competitors who've shown how it's supposed to be done. Sorry but not for me, Stripe is my new paypal.

Dear Andy , After the many years of Paypal receiving stories just like yours I'm forced to take action. The traditional Paypal long term strategy of "Hahaha, where else are you going to go for online payments?" is not a viable option anymore.

It's unfortunate that your story has spread so far and so quickly. I now have to figure out how to resolve this AND try to figure out how anyone let it get this bad. Changing such entreched culture here is going to be hard.

I'm going to do my best of not letting Paypal become more of a cliche of how big businesses get their foundations kicked out from under them by smaller, scarappy startups.

P.S. Please,please, please don't google Stripe.

That kind of behaviour from a CEO is not seen enough. Good on him!

The day Paypal blinked?

I just was sent my first Paypal survey that I can ever remember about what else I'm using or wanting to use

I think this represents a stay of execution for PayPal. I bashed them in the past, but maybe there is some hope.

I hope this is a view of the transparency we'll be seeing in the future from all levels of the org.

I've always wanted to have a spreadsheet or something to keep track of the "HN effect" in which companies respond to public outrages because of their publication here. Though of course they might also get attention from Reddit and other online outlets as well.

Nice gesture, but how many people are going to have the same reach in their complaints? It would be nitpicking to say the email fails the corporate sociopath-speak test with 'leverage the issues', but what irks me is asking for the help of someone your company has just offended. The frame of mind of a non-sociopath would be to say 'how can I help earn back your trust?'.

I've given up on PayPal for my meagre needs, but anyone with real money on the line should beat a path from them until their actions truly speak louder than their words. Speaking of words, I noticed a TOS update from them but haven't read it yet, so if they have taken positive steps then add grains of salt to this comment, to taste.

The most effective way to show displeasure with a business is to stop being a customer. Period. You can't blame the CEO here - he's simply trying to stop the bleeding before Hacker News reopens it with a machete.

I've briefly worked for a payment processor - and I'm not overstating here - but this industry doesn't give 1/2 a st about your feelings of them, their customer service, or what you think of their CEOs. They only care about getting as much money as possible. Period.

Peteris, keep posting of your experience and let's see if the CEO follows through. If he doesn't he'll lose twice as much respect and twice as many customers. If he does, then know you got some very expensive customer service, my friend.

PayPal is starting to feel the pressure of all these new payment startups (eg. Square, Stripe) springing up around them. They know that if they're not careful with their brand image they're going to quickly lose their lunch in the next few years.

To all the naysayers out there: in your opinion, what could the CEO have written to convince you? He doesn't have the option to go back in time to change what happened, only to respond.

If I'd receive such an email, I'd give 'em a second chance.

I wonder if they cleared thir backlog of 100,000 complaints from 2002? [1] Seriously, PayPal has had the same atrocious customer service now for well over a decade now, one email from a new CEO means exactly nothing in the grand scheme of things.

1. http://pub.bna.com/eclr/021227.htm

What the CEO is doing is effective. He's signaling that he really wants to fix things and won't make excuses.

I doubt the CEO will learn much he didn't already know by a "direct line" case study, but humbling himself in this way might give him the lever he needs to really move company culture.

PayPal can keep most of its anti-fraud effectiveness while improving customer service for those innocents who want to recover from misclassification. Either being more trusting, or spending more effort discerning who can be trusted, will cost them money short term. But if they don't do it, they'll lose some of their customers to competitors who will.

I think we should make judgement on the outcome rather than the email (since it's basically speculation anyways). Judge: Do these types of problems happen in the same amount and severity in 6 months? (or whatever time horizon you think is agreeable to see significant progress).

And there shouldn't be mockery for him fixing one account. Sure there are many to go, but before this account was in the same boat...so it's an improvement no matter how small. Whatever Andy said in his post really resonated to D. Marcus; now I hope it really is the catalyst for PayPal to improve.

edited shortened it up.

Back in 2006 someone hacked my paypal account and used my credit card that was attached to paypal to purchase a few ipods. The criminal had them sent to their home address. They also changed my paypal password so I was not able to login. I contacted paypal support and they were absolutely not willing to help even. It was terrible customer service. I have never used paypal since.

To everyone, on both sides, that feel this is just a stunt or a sign of real change, just give it time.

Either things get better at Paypal, or they don't. Yes, big lumbering companies can change for the better. Microsoft, IBM, and Apple come to mind. Yahoo may be on that road now too. But it takes time to see. The wheels of change move slowly.

Reminds me of the proverb "do good nd cast into the river". If you want the world to know about it I would simply consider it a PR stunt. Maybe the Paypal CEO had a positive intent and the Marketing team / PR team wanted to brag about it to the entire world. That's how the corporate world is though!

Talk is cheap, PayPal.

Now he needs to write the other 100k innocent people PayPal has completely screwed with.

A single email does not change a process nor a corporate culture of indifference.


PayPal has earned their reputation for freezing accounts - WePay even used it as a marketing tactic:


One wronged customer down; thousands more, including myself, to go.

Wow, just wow. If it's real. If he really means it. But still.

Screenshots are more confident than copy&paste of text.

I hate hate hate PayPal. They ruined my ebay business!

Link is down. Mirror / backup anyone?

That's classy.

"Sent from my iPad." Nice.


Okay which one of you hacked the Paypal CEO's account?

his name is david marcus. isn't this the same guy who cheated and used protomatter in Project Genesis?

And his mum is Carol Marcus? Kirk's son!

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