The New PayPal Anti-Fraud Model
The New PayPal Anti-Fraud Model
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.
The New PayPal AntiFraud Model - To learn more about this author, visit Herb Gilliland's Website.
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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.
The New PayPal AntiFraud Model - To learn more about this author, visit Herb Gilliland's Website.
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