PayPal Demos Auto-Debit Gumball Machine

ForgedArtificer writes "At their recent developers conference in San Diego, CA, PayPal unveiled a proof-of-concept gumball machine that would instantly pay for a gumball through a PayPal account using a smart phone and a QR code, sending a confirmation of the purchase through Twitter. Ok, maybe we all don't really care if we can get a gumball without a quarter, but the possibilities for this technology are endless."

Comments

endless possibilities

[Anonymous Coward]

"but the possibilities for this technology are endless."

Seems Slashdot editors can't even seem to spell 'beginningless'

Re:endless possibilities

[Sulphur]

I thought you paid for police chases afterwards.

Re:endless possibilities

[zonky]

Yes, everyone will be able to quickly and easily swap cheap payments via paypal, then there will be a fraud allegation, and someone's paypal account will be frozen permanently.

People stupid enough to trust paypal with their record of appalling behaviour deserve what they get.

Twitter

[jrumney]

sending a confirmation of the purchase through Twitter.

My wife is looking forward to when the local strip club starts using this technology. Privacy be damned.

Banking regulations.

[Anonymous Coward]

How is PayPal *not* a bank again? O.o

Re:Banking regulations.

[igreaterthanu]

PayPal is a registered bank.

Re:Banking regulations.

[YrWrstNtmr]

PayPal is [paypal.com] a registered bank.

Depending on where you are. From your link:

https://www.paypal.com/uk/
"PayPal was granted a bank license with the Luxembourg bank authority."
"PayPal Luxembourg will be regulated to the same standard as all major European banks. Banking laws and standards in the European Union ensure that customers are just as protected by a Luxembourg bank as by a UK, French, or German bank."

Not a lot of good outside the EU.

Re:Banking regulations.

[Tolkien]

Yep. Everywhere else they are entirely unregulated, and they will definitely want it to stay that way for as long as they can get away with it.

Re:Banking regulations.

[cob666]

PayPal wants everybody to believe that its a simple escrow service but I agree that its acting more and more like a bank, if they are considered a banking entity in the UK and other countries in Europe then they should be operating as a bank in the US. PayPal simply has far too much control over YOUR money and regardless of what their TOS state it should be far more difficult for them to arbitrarily hold people's money and/or freeze their account.

Re:Banking regulations.

[hedwards]

An escrow service doesn't generally get to keep the money that it's moving. Usually they get some sort of a cut of the transfer whether or not it's successful. But the remainder has to be given to either of the two parties involved in all cases. Either the intended recipient or if that's not possible back to the originating party.

Paypal however takes the position that in the middle they own the money and can do with it what they like. They can pass in on as intended or they can refund it back or secret option C they can just keep it and drag their feet giving it back.

Re:Banking regulations.

[t33jster]

Yep. Everywhere else they are entirely unregulated, and they will definitely want it to stay that way for as long as they can get away with it.

Well, not exactly unregulated, but unless you're specific about what sort of regulations you feel are missing, the rest of this is purely pedantic. It's much more of a clusterfuck than that. For instance, I count 42 states (well, 41 + a District) here. As a former employee of PayPal's AML Compliance department, I can tell you that paypal is regulated (AML/CTF - not consumer protection regulations which is probably what you're bitching about) in the US (FinCEN), Canada (FinTRAC), Australia (AusTRAC), China (HK Police) the EU (CSSF) and anywhere outside of that in Singapore (MAS). A year ago when I left, there was talk of adding legal entities in 4 or 5 other countries, primarily in Asia and Latin America.

To the GP's point about why PayPal is not a bank (in the US anyhow), is that US banks issue credit and US money service businesses merely move money. I would certainly concede that the Bill Me Later unit of PayPal is operates purely on the technicality of the laws and/or regulations that separate banks from MSBs (BML makes a decision on whether to extend credit, then a bank issues the credit with the understanding that BML will buy the debt a few days later). There was often talk of becoming a bank, or at least chartering a subsidiary bank in order to allow the credit issuing to move completely in house. Ebay divesting Skype was supposedly a part of that plan, although I never understood why, nor can I say whether PayPal is any closer to becoming (or more likely starting) a bank. More of what PayPal does falls under the EU's legal definition of a bank, so PayPal is a bank there.

My credit card doesn't run out of batteries

[igreaterthanu]

My smart phone does. This will never be able to replace other forms of money until they get that one sorted.

Re:My credit card doesn't run out of batteries

[ziggyzaggy]

your credit card can't make 25 cent payments. I believe we'll go to a cashless society, all electronic money. That way the banking cartel can get a cut of every transaction no matter how small, and the government can tax, monitor and control all transactions no matter how small. If they consider you a pestilent person, they will cut off your ability to buy and sell.

Re:My credit card doesn't run out of batteries

[igreaterthanu]

how is this any different from swiping an EFTPOS card?

PayPal gets it's 1% or whatever the current rate is.

Re:My credit card doesn't run out of batteries

[noidentity]

Here in the US we have a device which also charges no fees to either the buyer or the seller. They have a nice feature in that if you lose one, nobody can access the rest of your money.

Re:My credit card doesn't run out of batteries

[igreaterthanu]

Holding US currency is essentially the same as giving the Federal Reserve an interest free loan and it takes much longer to count and hand out change than most electronic transactions. In addition it is nice and easy for any thief to steal. Yes cash is good for fall-back but it has it's issues as well.

Re:My credit card doesn't run out of batteries

[jrumney]

It depends on which country you're talking about. There is no standard for debit cards, as there is for credit cards. In the UK, debit cards incur a flat fee, which is why you see a lot of signs in shops specifying a minimum purchase for debit card use. In New Zealand, which has the highest debit card use in the world (and where debit cards are colloqually known as EFTPOS cards), there is no charge to the merchant.

Re:My credit card doesn't run out of batteries

[arth1]

And how is this different from what people in Japan and parts of Europe has been doing things for a decade now, paying for small purchases from machines with their mobile phones, whether it be soda dispensers, parking fees, or fags.

This is news, how? Except that you jump through hoops to pay through Paypal instead of simply getting it charged to your next phone bill?

A: Because it disrupts the flow of a message

[DNS-and-BIND]

Q: Why is starting a comment in the Subject: line incredibly irritating?

Re:A: Because it disrupts the flow of a message

[Yvan256]

The title is not the beginning of the first paragraph.

of course

[Ryanrule]

paypal gets a penny on every gumball

Here come the overdrafts

[BigSlowTarget]

Wonderful. Since Paypal is linked to checking accounts now you can expect that should a hold be placed on a check you deposit or if there's a bank error you'll be in for a $33.05 gumball.

...endless stupidity

[holophrastic]

So let's see. The gumball is a simple sphere that cost a penny to produce, and was produced in a batch of thousands. The gumball machine -- read dispensor -- cost ten dollars to produce, adn was produced in a batch of hundreds. The consumer is standing not twelve inches away from a needless and insignificant candy treat.

The perfect solution is not:

a more expensive dispensor, more competant consumer, a mobile phone, a fancy barcode -- read smart phone -- a web-site -- read web browser -- a privacy policy -- actually four -- Internet infrastructure, cellular infrastructure, a phone plan, a data plan, customer service, tech support, a collections agency, anti-fraud measures, and a PIN.

The perfect solution is a hammer. The quarter was already a nuissance. This is just stupid.

Oh yeah, and a bank account. How silly of me.

Re:...endless stupidity

[holophrastic]

It's not proof of concept. It's a fun sunday tinkering in the basement.

Try to count the number of things you could do with that sort of concept -- actually. Then think about how many of those things would be better off as a result. Odds are, it's very close to none.

People like to do such things -- link together a dozen systems to show how cool things can be when you link together a bunch of systems. And it is really cool -- it's like art. Entertaining and totally useless.

It's almost never better to link together multiple systems as opposed to building a dedicated single-structure solution. Sure it's often cheaper, and faster, and worse, and worser, and worsest.

A chain is only as strong as its weakest link -- because it has absolutely zero redundancy on any one of its many links. But it's easier and cheaper to manufacture, and it's more flexible than a cable.

So what solution would have you rely on, in this case, your bank, twitter, your phone, your ISP, your phone plan, and the dispensor's isp, its plan, its twitter account, and its paypal account?

Talk about surface area for bugs, adn for attack, and for privacy, fraud, and general distrust.

The same would hold true no matter what you're buying over such a system.

Technology is already used in Japan

[Sepiraph]

I think Japan is the among one of the first to widely adopt to this: http://en.wikipedia.org/wiki/Mobile_payment

Re:Technology is already used in Japan

[LucidBeast]

In Finland you can't find a soda machine that you can't pay with a mobile. You can also buy Pizza.

Why not challenge-response?

[snookums]

A more interesting type of system would use a QR code challenge-response. A small screen on the gumball machine, or at the supermarket checkout flashes a QR code. You point your phone camera at it and details of the transaction come up on the screen. If you hit "confirm", your private key is used to sign the transaction and produce a response QR code which appears on your screen and is read back by the merchant.

This way, your phone doesn't need to connect back to the payment gateway provider at all. This is an advantage if there is bad reception inside the store, or your provider is having a bad day, or your pre-paid plan ran out, or you only have an iPod and not a smart phone. Banks could probably even produce dedicated devices that performed only this function and provide them to customers.

Why is Twitter involved?

[Animats]

Why run this through Twitter? If the server wants to send an SMS message, it should just send an SMS message using an SMS gateway. Why package it as a "tweet?"

(I suspect why. So they can spam you. It's illegal to send unsolicited commercial SMS messages in the US. If PayPal makes you "follow" them on Twitter to get transaction confirmations, they can then send you ads, too.)

We already have that technology!

[Kagetsuki]

While it's not linked to a paypal account we've had IC payment here in Japan for a very long time. I've been buying things from vending machines with my phone for maybe 6 years now and as far as I know I was a late adopter.

For your protection,

[Compaqt]

Paypal has withheld your gummy bear for 180 days. Because you accessed the gummy bear from a location other than your usual location, we will also hold your $.25 while our anti-fraud department investigates.

To increase trust in the Paypal community, verify your account. To verify, fax a recent utility bill, send your debit card PIN and a half-chewn gummy bear as a DNA sample.