An astute observation, but John Donahoe and Scott Thompson are simply delusional if they think that PayPal can continue to underpin the faltering eBay Marketplace “house of cards” by becoming even a minor threat to the existing banks/Visa/MasterCard payments systems at traditional Point-of-Sale—the idea is pure science fiction. (“Beam me up Scotty!”)

The real question is, when are the world’s various banking regulators going to finally do something about over-sighting this unethical, unprofessional, unregulated and clunky financial operator that offers unlicensed banking-type services and is, in effect, simply a money gouging arm of the Ho’s “eBafia”?

Even though PayPal clearly offers banking-type services (ie, holding users’ funds in non-prudentially regulated and non-FDIC insured banking-type accounts, etc), PayPal is mostly registered in some places not as a bank nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal itself has even claimed that they “are not a payment network”, and there is a grain of truth in that claim because most (but not all) of their activities facilitate the transmission of funds simply by riding on the back of the banks’ existing payments processing systems.

In fact, the only thing creative about PreyPal has been their founding use of users’ unique email addresses as identifiers for online payment transactions. PreyPal is otherwise no more than a blood-sucking parasite riding on the back of, and in the main cannot function except via, Visa/MasterCard and the banks’ existing payments processing systems.

Regardless, outside of PreyPal’s mandated use on whatever will ultimately be left of the Donahoe-stagnated* eBay Marketplace, PreyPal (and most other third-party payments processors) will eventually be consigned to the history books by the retail banks/Visa/MasterCard once those players get their “online” act together. There is nothing surer than the sun will rise in the morning.

Both eBay and its ugly daughter PreyPal are most devious, unethical, unprofessional organisations: they both have become the most despised commercial entities on the planet—apparently, more hated by many than even “the banks”. eBay, amongst many other things, has forever knowingly and criminally, facilitated shill bidding fraud on their trusting auction buyers. And what else can be said about PreyPal that a great many PreyPal merchants don’t already know, to their cost …

Having said that, it’s possible that PreyPal can survive by becoming the merchant account provider “of last resort” for those very small or unscrupulous merchants unable to get a real merchant account from their own bank—Oh, hang on, hasn’t PreyPal always been just that, and charged all their users accordingly?

* See http://eventhorizon1984.wordpress.com/2011/10/20/ebay-inc-2011-third-quarter-earnings-call-numbers-of-interest-to-small-business-sellers/

PayPal Claims that PayPal Is Not a Payments Processor!
http://forums.auctionbytes.com/vbulletin/showthread.php?t=24148

eBay, a Knowing Criminal Facilitator of Auction Shill Bidding Fraud: Case Study #4:
http://forums.auctionbytes.com/vbulletin/showthread.php?t=23540

And, from along the way, a compilation of (mostly inane) quotes from eBay executives:
http://forums.auctionbytes.com/vbulletin/showthread.php?t=24159

Enron / eBay / PayPal / Donahoe: Dead Men Walking.