Thread: Brainstorming: Potential issues of building a PayPal like system?

PayPal though "good" and"easy" is still far from what we can call ideal ,owing to its astronomical fees, insane customer services, the infamous account limiting etc.

What do you think can be potential issues if someone set in to build a PayPal like business.

Some issues come to my mind:

• Needs Huge Capital
• Security
• Compliance Issues with countries
• Getting Users register for your service
• Answering questions like Why you and why not PayPal? (May be answered readily if you are planning to open it in a country where PP is not already present)

... Fill in with your thoughts please?

more than compliance issues with other countries, you will have to worry about compliance issues in your own country.

after all, you will be accepting all the payments into your bank accounts.

I would say Trust. When it comes to money, people need some assurance which you can't give unless your site is really BIG.
Alertpay, i would say had a very very beautiful opportunity when it started to grow, i.e. within a short span of time, due to PP disallowing PTC sites, all of them moved to Alertpay alongwith millions of PTC customers.

Yeah trust always needs time to build especially if you are / your company is starting out.

Legal & security issues would be the things I would think about.

Some things you could be asking like "What happens if both the seller and buyer disagree on a payment?" There's many instances like that and personally I wouldn't want to be making those decisions - leave it up to PayPal!

For this you would need a set of dedicated servers with Firewalls and SSL certs all over. It will take a lot of time and work to do this.

You would you need about a dozen or more programmers, very high skilled ones and those cost about 100,000 USD a year. So you will have a payroll of a over a million dollars a year just for your programming department. Then more people doing customer service.. more people probably managing the firewalls, servers,load balancing etc. You would have buy a decent server. Probably a few of those $100,000 units, and probably a million other things.

Your biggest hurdle, you probably will need about $10 million in venture capital. That will be gone probably in the first year.

Your pretty much starting a bank, so you how do you start a bank?
A huge facking credit line and unlimited backing from diplomats.

Thats my take, find a new idea.

As others have highlighted, trust/reputation will be a big part of this. It is relatively easy to build something new and generate some hype but not so easy to re-invent the wheel and get people excited.
Legal compliance is a must. Protect yourself for EVERY scenario, no matter how unlikely or insignificant it may seem.

If you were to go ahead with this then a suggestion would be to align yourself with a reputable online business, the way that PayPal did with eBay.

Good luck.