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eBay finishes PayPal Acquisition
Aidenn writes "As some may remember,
eBay was in the process of merging with PayPal. It is finally finished. eBay has information here. news.com has a more complete story."
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I got the email from EBay yesterday, but they failed to address all of the issues with PayPal. They do mention that they'll phase out their BillPoint service, though.
One would hope that they'd completey revamp PayPal's customer service. EBay is a highly visible company. Hopefully this will encourage them to start treating PayPal customers better.
"Anyway, long story short... is a phrase whose origins are complicated and rambling...." - Abraham Simpson
As the dotcom boom hits bottom you look around and notice that fewer and fewer services have competitors anymore. That's the way it has become in on-line payments. There are a couple of alternatives that may still unseat PayPal as the major player in the space, but now that eBay has them I doubt it.
Low barrier of entry means this and the auction space are ripe, but getting traction in it is hard.
What concerns me the most is the service aspect of the deal. PayPal has a bad reputation, but there is hope it will it will improve.
---
Go Daddy President Interview
Now that there is a reasonably reliable company running PayPal. I am just going to wait for a few more to jump on the bandwagon.
Maybe now, electronic cash will become far more acceptable, and smaller vendors will be able to open shop online without having to bow down to Visa and Mastercard's absurd policies. (or having to demand cash payment, which makes online business meaningless really.)
EBay has shown auctions can be done effectively online, now maybe they'll show that E-Cash can be done as well.
~ kjrose
All in all, I think eBay is a really good system. I hope it stays that way, and doesn't turn to poop because some corporate jerk wants to be greedy.
if I gave you a 4000$ equiv block of palladium, would you turn it away because no central authority would accept it as tender?
If you were giving it away, probably not. If you were trying to trade me something for it, probably, unless you were losing very badly on the deal. After shipping and finding a buyer and getting screwed by that buyer, I could maybe get a couple hundred bucks for that block of palladium, and that's after spending several days trying to hunt down a buyer and making the exchange.
Money has value not only because it's wanted by the US government; the fact is, it would be infeasible for every Wal-Mart cashier to make barter for anything the customer came up with. If the government stopped making or supporting any type of money, then Wal-Mart would have to find some way to take your barter at a standardized rate, and then would then give you Wal-Mart bucks to give to the cashier. Many companies would probably pay you in Wal-Mart bucks - you can have 30 thousand dollars worth of computers, which will depreciate quickly and you'll have to lug around in your car to trade and make sure they don't get broken, or you can have 20 thousand Wal-Mart bucks, which you can hand into the cashier for food without question.
I don't see any reason to assume we couldn't have a digital equivalent.
You said it yourself: why gold has value is because it was a limited resource, and the reason money has value is because it is backed up by the coercive force of government
There's no such thing as a digital limited resource; with complex enough cryptographical tricks, you can get unique digitial strings, but they aren't a limited resource - the only way to make them valuable is the backing of a central authority.
One thing that I always thought was smart was how Ebay stayed out of the financial end of things. They were providing a listing service; actual payment and whatnot, unlike with a real life auction house, were up to the buyer and seller.
now ebay is involving themselves in the financial end as well... this will make things more complicated.
close, but not quite true. Gold, for example, has no monolithic backing authority, but it's recognized as valuable.
a big backing authority is by far the most likely way for "e-cash" to catch on though, yes.
I'd also like to point out that PayPal is not anything like cash. It's more like "e-debit-card".
The name of the game for online transactions is building a critical mass of transactors. That's why eBay has no real competition in the online auction game, despite well engineered attempts by players with deep pockets, like Yahoo and Microsoft.
The same goes for PayPal. They realized they had to build a critical mass of customers quickly, so they made it easy to sign up and offerred cash incentives. By the time anybody else discovered this market, it was just too late.
I agree the absence of competition is a Bad Thing. But side-by-side transaction systems isn't going to create competition -- nobody has any incentive to sign up with the minor players. If you want a transaction monopoly to give up being a monopoly, you have to force it to open up its system.