I don't doubt the PayPal story you related, but let's be fair. These kind of billing screw ups can and do happen with any company that bills credit cards and it is almost always difficult to get straightened out.
The money in my PayPal account earns interest and I get a "cash back" rebate when I use my PayPal debit card. Yes, I am charged a fee when I get a payment, but nowhere can you take any type of credit card or electronic payment and not be charged. Will the fees go up? Probably so. Over time most things do go up in cost.
The type of fraud you mentioned is not exclusive to PayPal, either. These crooks will run their scams where ever they can.
Find me a company that never has any problems and never raises prices and I will switch.
I hope you continue to have good luck with the online pay services, but I just keep reading more horror stories on the ebay forums about BIG problems with these services, like
THIS ONE
A number of sellers with the basic Paypal account used to limit the use of Paypal by bidders on their auctions, to items over 50 or 100 dollars, so as not to get hit with their fees on a less than 10 dollar sale. From what I have been told by a couple od sellers, within the last 2 weeks Paypal changed that policy of allowing sellers to set a threshold, and now they will have to accept Paypal for ALL transactions, UNLESS they want to pay more for a business or premiere account. Of course, paypal did not inform the sellers of this change in policy, they had to find out after a closed auction where the bidder chose paypal to pay for a small dollar item.
I realize I have probably lost sales due to my not using on line pay services, but selling mainly collectibles and antiques, I don't think I have lost many. If the collector wants what I have they will pay by snail mail. If I was selling new merchandise, think I would have to use online pay services.
With over 2500 completed auctions, I have not got beaten on a bad check yet (well I did get 2 bad checks but the bidders later sent money order payments, as there was some kind of bank mixup).