Tweet

The New PayPal Anti-Fraud Model

Written by: Herb Gilliland

Article Overview: Reprinted with permission from the book "A Universe of Interactions", by H. Elwood Gilliland III, edited by Ziva Borlja

The New PayPal Anti-Fraud Model

Reprinted with permission from the book "A Universe of Interactions", by H. Elwood Gilliland III, edited by Ziva Borlja Peter Thiel was a corporate lawyer before he experimented in online transaction services. In 2003, his company had become bogged down with unnecessary conflict resolution features that sought to usurp individual rights by enacting a privatized system mirroring the legal system. This independent action was eroding consumer and merchant rights as his company was being sold to eBay. It was atrociously ineffective, and filled his company with issues and facilitated fraud inadvertently. To cite a cliché, Peter was "paving the road to Hell with good intentions."

There is a distinct psychological line between businesses: mission statements and goals must always be kept in the way of company growth. Unlike human beings, systems do not go through pubescence or mature to adulthood in the same way that organisms do. They are not organic, they are not really people. This is a distinction in law which is a topic for another section or perhaps another book entirely, but in a nutshell legal entities are not people and thus do not function in any way like a person does.

My goals in consulting pro-bono for PayPal included helping Peter or his management realize that the role of PayPal was too broad and could not facilitate the types of transactions that were necessary to the development of a quality service. In later years, after its sale to eBay, PayPal's direct involvement in conflict resolution was reduced because it became more like a bank and less like something new. What the industry has learned from its latest paradigm is that we are creating new ways of interaction, but not new ways of governance. The fundamental issues with the human experience are no different that those issues which existed before. Humanity is still at the whims of its constituents, and still has fundamental connections to its culture and social history, defined by an identity that has never really evolved from the first moments mankind began to dominate the planet. PayPal can now be held as an example of a superior service; individualism has gained one level of anti-fraud protection not present in debit and credit transactions. For this reason, PayPal is given its single advantage which makes it different than the previous paradigm of Mastercard/Visa transactions present in banking systems.

This differentiation was enough to secure PayPal's place in the new economy. It was Thiel's reliance on the ideals of his youth which kept him from creating a stable platform. Only after PayPal moved to eBay did the company clean up the issues associated with their own rhetoric of process. PayPal's initial folly was an issue of communication. Its designers had not placed communication in the proper places, with the proper chain of custody and handling instructions. It sought to do more than a transaction service could. It tried to circumvent the legal process in the hopes of creating a newer, better system all inclusive to PayPal. Luckily, parts of the service were eroded through suggestion and the conflict resolution portion was reduced from a self-righteous, imbalanced and unjust, instable environment to a stable, optimal instantiation.

This job isn't done yet. It needs more help. It needs careful scrutiny, reconsideration, redesign, refinement. The walls that the bank builds for security leaks into the way the bank makes money. If you defeat a customer, lock them in a box, hold them without hope and force them to comply, you haven't done your job in banking. If you give them opportunity to make money, provide them with solid, undiluted truths about business, train them to be business-people, show them the where, why and how of money, then you've made yourself an equal share without a doubt.

Related Articles
  Online Business Ideas To Generate Instant Internet Income Using PayPal
  Home Staging and Merchant Accounts
  Turning Your Simple Work At Home Opportunity Into Money
  Paypal to let you shop, pay bills on TV
  Why PayPal Works Well for Online Business

Article Tags: antifraud, elwood, fraud, gilliland, paypal, universe, ziva



Related Forum Posts
Online selling tips for newbies - If you want to sell something online and get paid through PayPal, what are you supposed to do? Do you ask the seller to pay your account by giving him/her your email address (that's registered with PayPal) or do you send him/her a bill via PayPal? And once the seller has paid you, can he/she get a refund or cancel that transaction? Thanks
Re: Online Store for Website - We've used it for our business since early 2011 and there have been no issues. All you do is create a PayPal account with your business email address, or make one up for you business, apply the business credit card info to it and get a shopping cart app and that's it. We don't keep a lot of money in our PayPal account though. Stay around $500 or less. I've heard stories where people had a ton of money in their PayPal account and could not get it out for some reason. So be careful. Use it only as a transfer process and you'll be fine.
Re: e-Commerce and e-Payment providers - I use PayPal. They're recognized worldwide. 99% of my payments are processed electronically, and my customers need to feel secure about making their payment. PayPal has a sound reputation, so I am hesitant to use anyone else even if there are incentives to switch. Aneshia
Re: e-Commerce and e-Payment providers - Hi GT, I was always very reluctant to trust the Internet at all in the early days until I became a marketer and had to show a bit of faith. Now it is second nature to many people and I use PayPal for virtually all my transactions. Like Michelle I use Global Exchange for one of my affiliate programs but other than that it is PayPal for me. regards, Mal.
Re: e-Commerce and e-Payment providers - I like PayPal because of how they handle refunds. If you buy something from someone thru PayPal and there is something defective about the product, you can request a refund. If the supplier is difficult, then PayPal will "force" the supplier to issue a refund. That's the test of a good product..how do they handle things when something goes bad. It's easy to handle things when things are going well. I think the same goes for your car insurance. How good they are depends on how they behae when you have an accident. Aneshia


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Bootstrapping Your Start Up Business.

Unspoken Yet Important Rules for Book Proposals

Online Business Ideas: A Look At Various Options

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.