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Could PayPal Be an In-Store Option?
daria42 writes "PayPal has long been one of the most-used payment options on the Internet; its history serving eBay's millions of users has now expanded into a wider remit across many e-commerce sites. But will the company ever become a valid option for point of sale payments at actual physical retail stores? Yes, according to PayPal's global president Scott Thompson — and PayPal's working on that right now, with one option based on mobile phones on the way and two others in development. It'll be interesting to see how far the company gets with its plans; personally I'm not sure how comfortable I'd be using such a system."
Why would I need this? I can pay for things using my debit card with great ease. I don't see how any other system could beat that, unless it requires no physical token.
They're not a bank!
If this went through, I'd be hard pressed to see how they could keep up that facade.
Paypal demands access to your checking account after $10k of purchases. It is reckless to permit any third party access to a checking account.
What happens when Paypal gets hacked and people's checking accounts start getting drained?
Usually you have some legal protections when using a debit card. Paypal has a habit of ignoring disputed transactions until it's legally too late to get your money back. I had a problem with them a few years back where they kept telling me to talk to the merchant to resolve the issue, but if the merchant never shipped my stuff and won't give my money back what else can I do? If I used a debit or credit card it would have been much easier to dispute the charges and get my money back.
Tea and kung-fu. Life is good. Rising Phoenix
Debit cards are issued by banks, subject to strict regulation. Paypal is not a bank.
Good-bye
Are you comfortable with the current practice of letting a waiter you've never met whisk away a card with your account number prominently stamped on the front
Where I live (Vancouver, Canada) this practice has largely gone away. The server brings a wireless payment device to the table and processes the transaction there. This has largely been driven by the "new" (new to North America) credit cards that are PIN-enabled chip cards.
Those liability limitations are hardly a trivial benefit, though, not to mention that my contact with AMEX customer service has always been pleasant. The one time I ended up getting screwed on a Paypal transaction it was an absurd effort even to get a non-canned response from them, the bank refused to step in to assist (apparently you don't purchase the product via Paypal, you purchase 'e-funds' which are non refundable, and then use them to purchase the item), and I ended up getting maybe half my money back. The amount was not especially significant, but the way it was handled was beyond infuriating.
They also have a terrible record in terms of freezing funds, even if you do your best to withdraw everything immediately, and worse rates than Google or Amazon (last I checked, at least) - the only reason I used them as a seller was that eBay forces you to, and on balance the extra exposure my sales got with eBay listings was worth the unpleasantness of dealing with Paypal. I wouldn't touch them with a ten foot pole if there's another alternative, however.
Because they're a bunch of scummy thieves.
http://www.paypalsucks.com/
That pretty much sums up everything I was going to say. My wife has an account that's tied up in the Paypal dispute system with just under $1000 in it. We're going on around 6 months now with no resolution in sight. If we were dealing with a bank we'd have been done long before now.
Paypal transaction fees are insane. Even a merchant account is charged 1.9% per payment.
No, it's a bank. Bank deposits are normally included in the definition of 'money'. They do it like this (if the reserve ratio is 10%):
If the central bank creates $100 of cash then $1000 pops in to existence (with some adjustment for cash people keep in their pocket). It's called the money multiplier.
"Are you comfortable with the current practice of letting a waiter you've never met whisk away a card with your account number prominently stamped on the front (and "security code" stamped on the back)?"
Absolutely! At the _very_ worst, I am liable for $50 of fraud that occurs if I report it. Practically, it's almost certainly going to be waived.
I have been the victim of credit card fraud four times in my life, and am out-of-pocket exactly $0.00. The credit card companies work with the customers against fraud for the sake of keeping their business afloat and profitable. Paypal, on the other hand, has no regulatory or business reasons to do this at present - they have a captive audience.
Put them into a competitive market, and they'll die.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
On the other side of that coin: I've got a con artist who is trying to scam me out of about $400 in a legitimate transaction, first time in over 8 years that I've run into this. What does PayPal do? Immediately debit my account for $400, then tells me I'm supposed to reason with this fuckhead. So now I've got a $400 debit (meaning any transactions after this I will never see until I'm over the $400 threshold), and a scammer who knows I'm down $400.
This road runs both ways, friend.
You have no idea what you are talking about. The GP is correct.
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My local computer parts warehouse allows you to order from web kiosks in-house, and pay with PayPal.
You have to trust that they aren't capturing yuor keystrokes and stealing your account logon. Really no different than trusting the vendor isn't cloning your credit card. Of course PayPal has a horrible reputation for handling disputes as compared to Credit Cards where consumers have laws to shield them.
For who?
For the entire world.
Banks and credit card companies are orders of magnitude more dangerous than PayPal. Paypal are small potatoes on the Evil scale.
The 1929 Great Depression? Banks.
The 2008 Great Recession? Caused by banks. The fucking great boom we're in just now? (which is going to end at some point with a terrifying bust) => Banks.
No matter how bad PayPal's customer service, it doesn't compare to foreclosure fraud or the utter (20% unemployment) kind of mayhem which banks and credit card companies can wreak on an economy.
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Until PayPal is regulated under the same accountability as a bank
It already is. In Europe, PayPal Europe SARL has operated for nearly four years as a bank.
This is not second hand knowledge. I now use USBSwiper and have used it at a trade show on my laptop with a Verizon wireless connection. It worked perfectly. From an administrative perspective, I've never had a merchant credit card account that was so easy to use. From an economic perspective, PayPal charges a flat rate for all transactions - 2.9% of the sale plus .30 per transaction. There is a $30 monthly fee which can be turned off anytime if the merchant is closed for the season, on vacation, or any reason.
That's an entire 1% higher than my card processing, and my card processing doesn't have a monthly fee (it does have a minimum commission - which means if I don't run up $30 - $40 locally, but probably about $30 USD - worth of transaction fees, they charge the minimum anyway). PayPal definitely loses on the economy point there. I'm also protected from stolen cards because the processor uses 3DS authentication, meaning that the card issuer eats it if a transaction is charged back due to someone claiming it's a stolen card, not me. PayPal would just rip that transaction right back, leaving me out of pocket.
Most consumers understand that the merchant pays for the acceptance of credit cards; what they don't understand is that their affinity card or rewards card costs the merchant more per transaction than a standard credit card, or what is called a "qualified" card. All non-qualified cards are charged more. Want to take a guess how many cards are now deemed "qualified"? Out of every 100 cards swiped, maybe 10 to 15 are qualified, which means they are charged at the lowest discount rate. All others are non-qualified and cost the merchant more. Add on fees such as statement fee, "abuse of system" fees (it's real) and anything else the card processors can cook up and the real cost of card acceptance can be as high as 6% - 8% or more.
In this country, we also don't have any such thing as "Qualified Cards" - it's all the same discount rate (you can opt for unblended rate, which means you pay different amounts for Visa than for MasterCard, but the banks generally discourage that for smaller vendors). We also don't get any fees other than the declared fees (the monthly minimum charge, and the gateway transaction charges). So to me, a transaction is 2ish percent, and that's it.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".