Pros: Convenience for E-bay-aholics, can send anyone with email a bill
Cons: Can't accept CC payments w/ personal account, have to register a bank account, poor service
UPDATE: As of July 2004, PayPal has tenatively settled a class-action lawsuit dealing with some of their problems, including their "Money-Back Guarantee." So, it's taken a couple years, and the threat of legal remedies, but it seems I might actually get some money back by participating in the settlement class. I will let everyone know if and when I actually see the green.
Paypal does do some things very well:
1) Allows you to use a CC to pay for online auctions (mostly at Ebay). They do fill a need here.
2) Allows you to send a Payment Request (bill) to anyone w/ email. They can ignore it, however.
3) IF you register a bank account, you can use monies that are sent to you to pay your CC online, no fee, or pay for another winning auction.
3) Fairly easy interface on the site allows you to see details of and keep track of transactions.
4) Security of financial info seems to be solid, SO FAR.
1) DON'T BUY THE MONEY-BACK GUARANTEE / AUCTION GUARANTEE. It's only good for 30 days (far too short in many cases of problem auctions), doesn't cover damage in shipping (you have to submit a claim to the shipper), doesn't refund money you spend shipping wrong item(s) back to a seller, and if you can indeed make a claim at all, you have to send a HUGE pile of documentation snail mail and wait 5-6 weeks while it is processed. And they sometimes still side with the seller. THIS DOES NOT TAKE THE STING OUT OF A BAD AUCTION, FINANCIALLY OR OTHERWISE. And good luck trying to get a human to check out your problem.
2) You can't accept CC payments from buyers on a no-fee "Personal" account.
3) I really don't like the idea of them having my checking account information, and I may have to "unverify" my account, which will take away the ability to pay my CC with my PayPal balance--not that I have one too often.
4) Until recently, PayPal, even though they function as a financial institution, did not notify people who carried positive balances (or give them accrued interest). No regular statement notices of any kind were sent, good, bad or indifferent, it was up to the customer to check on his or her account.