When relevant market sectors are controlled by a monopoly that holds a large share of it, then you will rarely find a fair market economy there.
'Monopoly controls have been the excepction in free societies; they have been the rule in closed societies.' Lawrence Lessig
PayPal Holdings, Inc. is an American company operating a worldwide online payments system that supports online money transfers. It is a digital alternative to traditional payment solutions. PayPal is such a monopoly in the worldwide sector of financial services.
Yesterday, when I logged-in to one of my PayPal business accounts and opened the 'Reports' section there was a highlighted little notification symbol at the top right. What I read after clicking on the symbol really shocked me:
PayPal has just informed me that they are going to cap my monthly funds (the money that I earn by payments received from my clients). They will retain these funds partly when exceeding a specific amount for the time of 21 days. Just for the records: these funds are MY money.
How PayPal casually informed me about their new rules of the game [original screenshots]
NOTIFICATION ALERT:
DETAILS:
For a better read, I hereby copy the original text from my PayPal account:
* * * Start of PayPal notification * * *
You can access the first 25.000,00 USD you make each month. Money from additional sales will be available 21 days after the payments are processed.
We moderate available funds to reduce the likelihood of negative buyer experiences and ultimately increase their confidence in your business (Note surfermarly: What do they mean by negative buyer experiences? I haven´t had one in 10 years!).
The amount available to you is determined by information we collected when you created your account, public information, and your business’s performance. As you use PayPal and we get to know your business, we may automatically adjust your available funds (Note surfermarly: It´s not thet they get to know my business, they are willing to control it!).
By releasing some money after 21 days, we help reduce any potentially negative impact on our buyers. This gives them more confidence to shop and the more we understand you, your business practices, and your response to customer complaints, the more likely you are to get a higher limit (Note surfermarly: What about my own confidence? What about the trustworthiness of our common business?)
Over time, your available funds may increase if you:
- Ship promptly and add tracking information
- Work closely with buyers to avoid chargebacks and claims
- Avoid long refund times
Need access to more money?
You can request an increase once every 30 days. Provide a few details and we'll respond within 3 business days. (Note surfermarly: 3 more business days you are holding my money and do whatever you want with it, probably using it for your own investment and speculation.)
* * * End of PayPal notification * * *
Just for the records: there was no official update of PayPal´s general terms and conditions, no approval neither signature from my side required. They were just informing me that I won´t be able to access part of my money due to their new rules of the game starting from now. I prefer not to know what they are going to do with the not released money during these 21 days... 21 days, that´s almost one month of trading for them!
PayPal luckily isn´t subject to institutional bank regulation
Some months ago 
The PayPal co-founder Peter Thiel said once that PayPal isn´t a bank because it does not engage in fractional-reserve banking. Rather PayPal´s funds have not been disbursed are kept in commercial interest-bearing checking accounts. (Source: wikipedia)
In the US, PayPal is licensed as a so called money transmitter, on a state-by-state basis.
Honestly, I have no idea what Thiel is talking about, I am not a banker. But what counts for me is that NOT being a bank per definition, they are not entirely subject to regulation. The state laws in the United States vary, as do their definitions of banks, narrow banks, money services businesses and money transmitters. Although PayPal is not classified as a bank, the company is subject to some of the rules and regulations governing the financial industry.
Regardless of the rules defined by the financial industry, being a monopoly provides you with untouchable power as there is no competition. No matter how expensive the transaction fees might be, no matter how bad their customer services might be, no matter how many of the B2B clients´ money they retain and how long, clients - both B2C and B2B - will be forced to use their services since there is no alternative product. That´s the core of the problem!
By 2016, https://www.consumeraffairs.com/ had received already over 1,200 consumer complaints relating to PayPal policies. There are also numerous anti-PayPal Facebook sites and Twitter accounts which air customers´ complaints.
Release time - the unbeatable asset of cryptocurrencies and their markets
PayPal had a net income of 1.4 billion US dollars in 2016 (source). They are charging fees out of scale. My business is currently paying a fixed fee of 0,36$ + 2.9% of the transferred amount per received payment - incredible! However, since my product is exclusively sold online, my clients are from all over the world and being PayPal positioned as a monopoly in the market sector of online payment systems, it seems that I have no choice! The only thing I can do is to accept the rules they provide. End of story.
Have you made similar experiences with classic financial services? Is there any possibility to defend oneself and impede that financial institutions control our own money? Are any jurists or lawyers here? Or do we just have to be patient and wait for the big crypto revolution to come?
Looking forward to reading your comments!
Marly -
Picture sources:
Title paypal: http://pctechmag.com/wp-content/
Business man: http://investorplace.com/
Deep breath quote: http://img.memecdn.com/
Western Union ad: https://www.saveonsend.com/blog/wp-content/uploads/
Quote Mahatma Gandhi: http://quotes.lifehack.org/media/quotes/