An interview with PayPal president David Marcus

Engadget’s Darren Murph scores a visit to PayPal HQ and spends time with David Marcus:

When you have 6,000 people sitting in call centers all around the world trying to help our customers, it comes at a huge cost. But, there are better ways to manage cost than to just look at handle time. If you fix your core product experience, you have less calls, and you can spend more time helping customers. You can’t just flip that switch overnight – it’s a journey – but we’re working really hard and fast to do that.”

You read that right – nearly half of PayPal’s entire payroll works solely to field complaints, fix issues and offer resolutions in some seriously hairy situations. I offer up a suggestion that PayPal’s guarded nature must have been born from being torched one too many times by digital launderers and professional fraudsters, and while PayPal’s loss rate is almost unfathomably low by industry standards (less than 0.3 percent), Marcus confirms that it’s a daily battle with the dark side.

And therein lies the problem everyone has with PayPal. There’s only two kinds of companies that get this big yet this hated: A company that has a monopoly on the sector they operate in or a company where they have no feasible competitor. PayPal falls into the latter category. I’ve been at the sucky end of a PayPal issue more than once, rolling reserves are just one of the (many) problems I’ve had to deal with.

The reason most of us stick with PayPal is simply because there’s no other viable alternative. Sure, there’s Google Checkout. How many sites use that? Four, five? Lack of competition causes a lack of innovation and customer satisfaction. After all, if you have a beef with PayPal, what are you going to do? Use one of their many competitors? Face it, there aren’t any truly worldwide ones. Square is just starting to appear on their radar (causing PayPal to launch their own card reader) but that’s mainly for brick and mortar commerce.

I’d like to see PayPal improve, I really would. I don’t see it happening anytime soon, not until a competitor steps up.