guntab-dan

Exactly – we can't expect banks to pay when their customers get themselves scammed.

I think the solution is escrow. I am biased, because I work for an escrow company, but I've never seen a more effective approach. Hold the money until the buyer has what they paid for, and only then release the money to the seller. (To be fair, escrow does tend to be more expensive than simple money transfer, so it's not all upside.)

I work for a company that helps a lot of PayPal refugees. We hear these stories all the time. In many cases people know exactly why they were banned, but it's amazing how often they have no clue (like OP). Apparently these mystery bans tend to originate from automated systems, and there are too many automated bans for it human agents to be able to investigate them all.

While it feels like rule of the machines, it's actually rule of the fraudsters. If these payment processing platforms weren't so broadly vulnerable to fraud, they wouldn't need to rely on machines to make these critical decisions. An we can blame the credit card and ACH systems for both heavily prioritizing convenience over security via "pull" payments. Yes, crypto offers "push" payments, but those actually increase the risk of fraud for buyers. I think the killer combo is crypto with escrow, to protect buyers. But of course escrow has higher costs than just blindly transferring funds like the payment processors do. That's why this is one of those perennial problems of commerce.

Yep this is true. I work in online escrow. It's basically the original "smart contract", and until we are able to reliably digitize purchase events it's hard to beat. I have friends who talk about smart contracts, not understanding that it's currently very difficult for a computer to recognize events like "buyer has taken possession of merchandise", whereas it's pretty easy for a human.

The problem with Zelle is that it's not safe to use for anything except payments to friends and family. The Zelle user agreement [1] puts this warning in all-caps: "YOU SHOULD NOT USE THE ZELLE® SERVICE TO SEND MONEY TO PERSONS WITH WHOM YOU ARE NOT FAMILIAR OR YOU DO NOT TRUST. ZELLE® DOES NOT OFFER A PROTECTION PROGRAM FOR AUTHORIZED PAYMENTS MADE WITH THE SERVICE"

[1] https://www.zellepay.com/legal/user-service-agreement

I work in "online payments for guns" and it's amazing how many innocent people get banned by PayPal over guns. I talk to at least one per week. In almost every case, these people simply weren't aware that PayPal prohibits firearm transactions. Although PayPal doesn't provide much warning, it is actually following an industry-wide practice. All the payment platforms prohibit guns [1].

[1] https://www.guntab.com/payment-platform-firearm-policies