I've been reading PayPal horror stories since I-don't-remember-when. I only recently started bookmarking them under their very own tag in pinboard so that when they get brought up again I can bring a few examples to bear:
That's only the stuff I've read recently. So, seriously, I'm happy for you that PayPal is working great so far. Awesome! But, people aren't avoiding PayPal because it's "not cool", they're avoiding PayPal because they've paid attention to its numerous institutional problems and they'd like to do business instead with a company that at least tries to be decent.
Sneering at people making such a measured decision is also "not cool".
Speaking from the startup's side, I feel a lot of startup hate for Paypal comes from these horror stories. But in reality any low cost service will have bad customer support (Gmail customer support anyone?).
Also, take into account the fact that Paypal has millions of users, so even a 1:million horror story rate will explode into thousands, whereas for these new startups, I doubt they even have a million customers.
Yes, their customer support is stubborn, paranoid, and OCD. They might even sneer at you, but learning to work with them may be one of the best paying skills to have if you're processing volume.
Also, I give paypal credit for taking almost everyone under their wings. Half the people using paypal couldn't get a merchant account with any real reputable bank. They have paranoid security because their standards are so low.
And of course on the other side, if you're willing to give up a percent or two for being treated kind and by the "right people" then of course these startups will probably suit your need better.
Upgrading to PayPal's "virtual terminal" triggers a "rolling reserve" hold on this person's transactions; thread contains numerous other firsthand PayPal complaints: http://www.reddit.com/r/reddit.com/comments/l4q2y/please_hel...
Indie game devs bootstrapping development for a new game get their PayPal account locked down for 180 days after accepting preorders: http://www.pcgamer.com/2011/11/07/xenonauts-dumps-paypal-for...
HN's own jacquesm learns his PayPal lesson the hard way: http://www.jacquesmattheij.com/PayPal+robbed+my+bank+account
PayPal shuts down Regretsy's charity efforts: http://www.regretsy.com/2011/12/05/cats-1-kids-0/
PayPal destroys an antique violin (and robs the seller of $2500 in the process) out of simple ignorance: http://www.regretsy.com/2012/01/03/from-the-mailbag-27/
PayPal can't seem to figure out what features they do and don't offer: http://christianowens.com/post/15771850658/my-recent-experie...
That's only the stuff I've read recently. So, seriously, I'm happy for you that PayPal is working great so far. Awesome! But, people aren't avoiding PayPal because it's "not cool", they're avoiding PayPal because they've paid attention to its numerous institutional problems and they'd like to do business instead with a company that at least tries to be decent.
Sneering at people making such a measured decision is also "not cool".