OT [nzlug] Vendor of bits & pieces in NZ who does Paypal

[Nick Rout]

On Tue, 2006-07-11 at 11:32 +1200, Phillip Hutchings wrote:
> On 7/11/06, Vik Olliver <vik at econz.co.nz> wrote:
> > On Tue, 2006-07-11 at 09:20 +1200, Hadley Rich wrote:
> > > I don't think that is the problem. IMHO the problem is that PayPal aren't a
> > > bank and aren't local. This means that they don't really answer to anyone
> > > around here so theoretically could do anything they like with your money.
> > > That and the fact that they don't do NZ$ so you are looking at extra fees
> > > means that paypal isn't an attractive option for a merchant.
> >
> > Um, no, they can't do anything they like with my money any more than the
> > Australian-owned ASB can. Mastercard and Visa aren't local either. Last
> > I checked Mastercard was based in New York, and Visa in San Francisco.
> 
> Wrong. ASB is a registered bank in Aus, 


wrong, ASB is a registered bank in NZ. It is a New Zealand registered
company (ie under our Companies Act) and is also registered as a Bank
with the NZ Reserve Bank. It is subsidary of Commonwealth Bank (an Oz
company and registered in Aus as a bank under the Aus equivalent of the
Banking Act.

If you have a Visa card with a NZ Bank then that bank is under control
of the Reserve Bank of NZ and its controls which govern solvency and
fluidity. It is possible but relatively unlikely for a NZ Bank to go
broke, and as long as they are not broke you can retrieve your credit
balance on your Visa account from the NZ registered banking entity that
issues the card.

Paypal is not subject to NZ law and god knows what cross border
insolvency fights would break out if it went broke.

Remember neither your bank nor paypal are trustees of your money. In
depositing in a bank account, a visa account or a paypal account you
loan money to the entity, and they have an obligation to repay you if
you make demand in accordance with the contract (ie present a
cheque/card/withdrawal slip). If the entity goes broke you stand in line
with all their other creditors,  including landlords, staff for wages,
other banks and so on. The difference with a bank is the oversight and
rules of the Reserve Bank, and the somewhat warm fuzzy feeling that the
government traditionally doesn't let institutions that major go through
leaving ma and pa out in the cold .

> and therefore has to obey
> certain laws about transparency, fees, and giving you your money.
> PayPal is not a registered bank in the US, it's a private company.
> They actually have no direct legal obligation to give you the money
> and not charge extortionate fees, though as it's the service they
> offer you could easily win in court if you had the money and patience
> to go through the US court system.
> 
> > They do NZ$ - I have transferred money from my own Paypal account into
> > my own NZ$ Visa account for a very nominal fee.
> 
> Is your account a business account?
> 
> > What I'm picking up is an aura of distrust by many people specifically
> > concerning Paypal, and I want to know where it comes from.
> 
> Last time I checked business accounts attracted substantially higher
> fees than personal accounts. Also as PayPal is a US-based non-banking
> entity the paths for legal resolution should an issue arise are very
> limited and expensive. It's just not a safe bet for many businesses.
>