If they wanted companies to be licensed they could just require a license. Instead they require a license and a bond worth millions of dollars in some cases, nominally to protect consumers. Yet if you have a million consumers in a state and a $1,000,000 bond, that means that if the company defaults, each consumer gets back a dollar.
This doesn't sound like consumer protection to me. It sounds like an artificial barrier to entry.
Also, PayPal has had licenses in all states that require them since its IPO, and clearly there's no connection between this issue and customer service.
Depends on context; in some cases it absolutely is.
Courts often "trust" people to go free temporarily if they can post bail pending trial. Lenders will "trust" you with their money in the form of a loan if you can post collateral.
Anyone that has a balance in PayPal is owed money by PayPal. So, any account that does more than just send out funds to other accounts (that is, purchaser-only accounts) is owed money.
Same for a bank. Any customer with an account that's greater than zero is owed money by the bank.
It's not a stretch at all to have a million customers owed money.
My apologies. The excess over your reserve per customer is unlikely to equal the account value per customer. Wait, are paypal under the auspices of the financial regulator? Who approves their reserving methodology?
My spaghetti monster, do they even have to hold a reserve, or can they just spend all your money on the derivatives market?
This doesn't sound like consumer protection to me. It sounds like an artificial barrier to entry.
Also, PayPal has had licenses in all states that require them since its IPO, and clearly there's no connection between this issue and customer service.