I was talking to an old friend who was in the virtual currency 'industry' for gaming. They used to sell these currencies for Paypal. To prevent Paypal fraud they used systems/software which determined the risk factor of a payment being fraudulent (Similar to MaxMind, but a little more 'advanced'). Over the last 15 months they claimed to have lost less than 1% of their sales to chargebacks/fraudulent paypal payments. They obviously only allowed people to buy a limited amount at first, and as they made more transactions they were allowed to buy more over time.
What's stopping people using these systems to also accept Paypal as a way to fund the purchase of BTC? I'm sure people would be willing to pay a certain % over Mt Gox in order to pay via Paypal opposed to other methods.
Have people already tried this? Did it fail? (I assume it did since there's none of them around afaik)
Link to MaxMind:
http://www.maxmind.com/(Again, person I was talking to didn't use Maxmind, but a more advanced variation of it. I'm sure it could also do the trick though?)
