As a buyer (and not a merchant), I love Paypal because I can have it debit directly from by bank account instead of handing over my credit card information. I hate credit cards, and this combined with Paypal's two-factor authentication gives me some good peace of mind. I haven't seen any other services that provide direct-debit to Australians, and even if they did, they would be useless to me unless they were as ubiquitous as Paypal is. I can use Paypal just about everywhere except for Amazon and O'Reilly. At this point I wouldn't even consider using Amazon or Google Wallet for purchases.

On the other hand, these horror stories have made me very wary of the merchant side of Paypal, and I'd definitely think twice about using them to process payments.