PayPal: the legal status of C2C payment systems

摘要

The area of online payment systems has been the subject of increasing attention for those interested in electronic commerce law. The reason for this is the almost exponential increase in electronic commerce transactions. For example, online retail in the United States accounted for $35.87 billion USD in 2001 and $47.98 billion USD in 2002. Online retail in the UK was only 0.4% of total retail in 1999, this figure rose to 4% in 2002.1 Most of the emphasis in the existing literature has been in regards to "conventional" online payment systems, such as credit and debit cards, and some other non-conventional payment methods such as the increasing legal interest in electronic money schemes. Nevertheless, there has been minimal interest in one of the fastest growing online payment methods - the popular Consumer-to-Consumer (C2C) model of electronic commerce. With the marked increase in C2C transactions exemplified by auction sites such as eBay, a viable payment method for such operations must receive legal review. The present paper will analyse the C2C payment system exemplified by PayPal, and it will explore some of the most pressing legal questions which need answering, such as the regulatory status of PayPal.