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PayPal Unveils Mobile Payment System
angry tapir writes "PayPal is targeting small businesses, service providers, and casual sellers on the move with its new PayPal Here service, which allows vendors to process a variety of payments including checks and cards using their mobile phones. The new service includes a free app and encrypted thumb-sized card reader, which allows merchants with an iPhone, and later Android smartphones, to process payments."
Given PayPal's well-documented history of abusing customers, arbitrarily freezing/keeping hundreds of thousands of dollars in customer money and being difficult to deal with, why hasn't anyone come up with a better way of doing things? Alternatively, why hasn't the US legal system, which seems to enjoy regulating everything to death, come down hard on PayPal and forced them to be more accountable? If they're going to act like a bank, they need to be held accountable like a bank.
Wonder what sort of damage losing your phone could do to your business with this?
Be seeing you...
Just use bitcoins instead. Paypal sucks
First question:
Would you stick your card into that device and/or type you PIN into a random Android mobile?
I think that should tell you everything you need to know about how much that will get used.
This is great news! Now what we'd like is, exactly like that, but not related to Paypal in any way
To compete with Square? They are already established and don't have a reputation for taking everything that someone has in their account on a whim.
The internet is full of "paypal stole all my money" stories.
Do not look at laser with remaining good eye.
As if there isn't enough identity theft already, and now they seriously want me to enter in cc information into my phone?
Fortunately, these phones are totally secure and cannot be hacked. Not only that, the app is 100% secure.
Since you probably don't work in this space, I'll drop you a hint: https://squareup.com/
It is nice to see what the thumb-size card reader looks like, and I assure you that if I ever see one I'll refuse to let that seller scan my card. Paypal is one of the most absurd abuses to ever come out of the Electronic Bay of thieves. and I'll never do business with them. This even concerns me that some retailer might trying processing your info through Paypal without your knowledge or consent.
I'm an American. I love this country and the freedoms that we used to have.
Paypal is to to the arena, I have seen these little smart phone CC readers in a lot of places. The most common place is at Gun shows.
Then, how will Paypal handle that? They dont allow you to use there service to sell guns, ammo, explosives, etc. but with these readers there is no way to check what you are selling.
Will they start locking accounts randomly until the seller submits what they are selling?
Will they contact the customer for a "Survey" to see what was bought?
I wonder if the local dealers will start taking CC's for a dime bag?
Ahh well, Paypal sucks and I would never use them because of there draconian methodologies and rules.
If you have any respect for your money, do not use paypal. They more predatory than credit card companies.
Sorry PayPal, I hate your business. Square built this model and has done a great job at delivering.
Between Square for face to face transactions and Stripe for Web Commerce, there have been quite a few "revolutions" with payments from these smaller companies and they are quite welcome.
Wait a second. That's a fact you posted. This is Slashdot. The GP post is insightful, dammit! Insightful!
Paypal is the refuge of last resort for processing things because they capture your money. Google and Square both sweep money into your account directly. And 1% back on debit card purchases from your Paypal account? Why not just use a real CC and get 1%-5% cash back, plus have your money in a real bank, and not have your account balance exposed to fraud.
Is it just my observation, or are there way too many stupid people in the world?
Does this remind anyone of the episode of "The Office" where Dunder Miflin introduces a triangle shaped phone?
I hope that someday we will be able to put away our fears and prejudices and just laugh at people. - Jack Handey
Because it's the only thing that works in most countries. Hell, it's one of the few that even exists outside the US.
But unlike a bank, they don't gaurantee your deposits as they are not FDIC insured...
It seems like paypal is very much like a bank these days...
It's a bank, for crying out loud. It just wants to avoid all the liabilities that being called a "bank" means. It's a freaking bank.
The price is always right if someone else is paying.
Because they don't abuse customers in general. They abuse sellers. The regular users who are paying are left alone, and thus the service is popular. Sellers don't really have a choice, and just have to put up with whatever bullshit PayPal comes up.
What's that "Le Ryan.mov" file on the desktop? What moron posts a screenshot of his/her whole desktop?
Full Disclosure: I work in the credit/debit card industry. Specifically, I work in the part of that industry that involves testing the shizzle out of them.
Your old magstripe only card isn't safe, the magstrip can be easily copied in a variety of ways. Readers are cheap and skimmers that are so small, they can fit inside ATM card slots, are easy to buy online (and don't cost much). Lesson? Don't use the magstrip for anything, ever.
So what are you meant to do? Well, like a lot of the rest of the world, the US is switching over to EMV. In the UK, it's known as chip and PIN, but the basics are as follows:
Instead of a magstrip, your card has a "chip" inside it. That chip is where the communications happen. Readers contact the chip and exchange a bunch of cryptographic data, but the key thing is that the chip isn't simply "read", but it performs calculations itself, using its own private keyset that cannot be read by the chip reader. I can't stress that point enough. There's no way to read the contents of the chips, all you can do is communicate with it.
Each transaction is "Unique" and the card itself will sometimes request to speak directly to a Host (i.e. somewhere at your Bank's HQ), in what's called an "online" transaction. If the card chip isn't sure of a terminal, it will demand to go online before processing a transaction. Hell, sometimes it'll demand to go online just because it hasn't recently. The two then communicate in such a way that the terminal (the middle man) can't intercept in any meaningful fashion. Each message is cryptographically generated so that the host knows the card sent it and not some MITM.
The bottom line? Come 2013, when the US is mandated to support EMV, card skimming will be a thing of the past. Stick your card wherever you like, nobody can do anything with your bank account*.
*there is, of course, a small caveat to this. As I said, each transaction is unique, so theoretically someone could skim a single offline transaction from you, but if they try to replay that transaction, there's every chance the transaction will then go online (the terminal AND the chip can demand to go online at any point), in which case the host will void it immediately. There's also plenty of upper and lower transaction limits, so for example if a transaction amount is above say $50 or $100, it HAS to go online or will fail outright.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
Paypal finally comes in
Square up http://www.squareup.com/
Intuit Go Payment http://intuit-gopayment.com/
Any others anyone knows about? There are those that don't have a Cc swiper on it but looking for a list of ones that give free swipers.
Paul: Father... father, the sleeper has awakened! - Dune
home depot has a button on their checkout. I am not sure if useable or not.
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
I just looked into this. I did not know about the liability shift in EMV preventable fraud come 2015. I almost cried tears of joy. You have given me a glimmer of hope for the world. (Though it might be a bit cruel to the merchants, I have little sympathy. The U.S. has been way behind the curve on this simply because the merchants would pitch a hissy fit about buying new terminals every time.)
Square is both a: a million times better and b: not paypal.
Those two reasons alone should be sufficient for anyone who has ethics and doesn't want to support paypal's censorship.
Just to clarify your point, 2015 is for New Zealand and Australia, for the US/Asia it's 2013:
(Not sure where you're based)
http://www.atmmarketplace.com/blog/6355/EMV-deadline-for-U-S-ATMs-the-race-is-on
However, considering the short time frame of this, I can't see how it's going to go smoothly. As you say, the merchants are all going to be very upset at this but tough to them - Europe has had EMV for years now, it's about time everyone upgrades.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
You deserve whatever you get. I predict wide adoption.
Please do not read this sig. Thank you.
There's only one downside: It uses PayPal.
I8-D
Come 2013, when the US is mandated to support EMV, card skimming will be a thing of the past. Stick your card wherever you like, nobody can do anything with your bank account
These folks at Cambridge say the system needs an 'entire rewrite' to be secure. Is there data to refute them?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
This is exactly what I think. Most users are buyers that have no ideas with the bullshit done by paypal to sellers.
The thing with paypal is that while you will most likely have bad experience with paypal during your life, not every one will have a VERY bad experience. When things go bad with paypal, they go real bad real fast. They'll start by blocking your account. Then proceed to pump money from your bank account or your credit card to "cover refund fees" or other bullshit.
Unless you are a popular blogger, you can suck it up and accept you've just lost thousands of dollars. All that because the US accepts that paypal is a money laundering service and not a "bank".
Not that bank are more ethical, but at least you have recourse against them when shit hits the fan.
What that flaw does is allow you to not require the PIN when performing a transaction. You can't clone the card, so you still need the card itself, plus you need to intercept communications between the card reader and the card (most shops aren't going to let you slide something between the card and terminal). You only use the PIN in terminal transactions, you don't use them for distance (Internet/Phone, etc.) transactions (different security is in place). A flaw for sure, but not exactly a deal breaker.
The PIN is sent in the clear anyway, you can "skim" the PIN relatively easily, but you still need the card itself
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
...that an ad for Squareup (served by ad.doubleclick.net) appears at the top of of my browser window when viewing this article...
I am not a number - I am a free man!
Each transaction is "Unique" and the card itself will sometimes request to speak directly to a Host (i.e. somewhere at your Bank's HQ), in what's called an "online" transaction. If the card chip isn't sure of a terminal, it will demand to go online before processing a transaction. Hell, sometimes it'll demand to go online just because it hasn't recently. The two then communicate in such a way that the terminal (the middle man) can't intercept in any meaningful fashion. Each message is cryptographically generated so that the host knows the card sent it and not some MITM.
I think it's likely that all transactions will be on-line for the US implementation. MasterCard PayPass, Visa PayWave and Discover Zip all go on-line all the time, I believe. These are all EMV-derived protocols, but I don't think any of them are perfectly-compliant with any of the EMV usage modes. Also, I think they're all SDA plus a per-transaction dynamic CVV.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
You're right, none of them are completely EMV, they all use a different variant of the standard. In fact, nobody actually does proper EMV, often for political reasons. still, I'd be surprised if ALL transactions were online only, there's plenty of legitimate reasons for needing offline transactions (ticket inspectors on trains are common here). Then again, it's not entirely unthinkable.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
I thought there was a recent article on slashdot about Apple already patented this.
But then, Apple seems to think they "invented" everything.
Full disclosure: I work in their IT department.
http://mobile.beanstream.com
Free app, 150 currencies, all major credit cards, PCI compliant.
Chip & Pin isn't perfect. http://www.youtube.com/watch?v=PWnH_yblgTc
...is that they are effectively a form of electronic currency for the internet. In itself that wouldn't represent a problem, but when Paypal's currency ceases to be neutral, such as it was in the whole Smashwords debacle it loses its value to most people because unlike the physical form it is not legal tender in all circumstances. Money needs to be neutral for it to work properly. Paypal has shown time and time again their willingness to muck about with what is considered legal tender with their currency so it is not a good option for people.
Worse yet, considering it is highly apparent that Paypal was lying about the Credit Card companies pressuring it (given how they were so easily able to flipflop on the issue) this means their currency is not an honest one and cannot be relied on to retain value. While personally I have used Paypal in the past I and never had any trouble, I have also been careful to limit my interactions with them and actively sought alternatives where ever possible. As time goes on and the kinds of incidents like the Smashwords one continue to add up it only increases my resistance to using Paypal where ever I can avoid it.
I imagine others feel the same...
Have a Virgin Mobile USA smartphone? Give VMRoms.com a try!
Great! Now all we need is for the vast majority of the Internet to support it like Paypal does.
The only thing Paypal has going for it right now is the convenience. If you shop anywhere, you can probably use Paypal. Squareup - if it's really as good as you say - needs to get its foot in the door in a couple of big places and word will spread from there.
Random Thoughts From A Diseased Mind (Not For Dummies)
It makes me sad that this needs to be explained on a site like /.
Don't fight for your country, if your country does not fight for you.
Because the vast majority don't give the slightest care to ethical issues like those surrounding Paypal AND once they learn to do things one way with one company's product they have zero interest in learning to use another's product, even if the interface is better or basically the same. Strangely this does not apply to learning a new version of the original product. They will go right along with those changes.
Meanwhile the rest of us pretty much are locked in because there is no use changing money with yourself. That's the problem with online auctions anyway. In person, so long as you can swipe a card it's all good. IE go with Square. Of course... the things those companies have done that provide the card you are swiping... I can't help you there.
Basically, people suck.
Watch the video.
http://www.youtube.com/watch?v=PWnH_yblgTc
You do need the card (for this particular attack), but it is trivial to hide the fact that you are doing anything funny, all you have to do is have the wire from the fake card hidden literally up your sleeve.
NZ Electronics Enthusiasts: Check out my Trade Me Listings
Even without the PIN, a stolen card can be used for all sorts of nefarious things. They have your credit card number, dates of expiration, even the CVN (3digit security number on the back), enough to order from many online stores. Many places will still accept cards without the PIN by using a signature as well, so really the issue is with the card being stolen. However, the GP was about people "skimming" cards via a hacked terminal and, to my knowledge this has yet to happen*.
*It's possible to make a magstripe card from data intercepted via an EMV transaction, however.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
Once again, I never said it was perfect, I said it prevents skimming (Which it does). All this does is let you get away without the PIN.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
Nonsense. Don't you remember the fiasco about them claiming to insure against fraud? Then it turned out that they were "self insuring", and never paid once.
I was one of those who lost something like $350 on it [the normal used price for that particular Quark Xpress]. I proved fraud 5 different ways: two of them were that the seller claimed to be selling a licensed copy of Quark Xpress, and actually delivered a Windows 95 user manual; and the seller claimed to be from the Antilles [not a Russian mafia hotbed] and shipped from Tbilisi Georgia, which would have caused me not to buy, right there.
Anyhow, Paypal said that since he shipped *something*, they considered that a 'quality dispute', which they didn't cover.
I never got my money back, and Paypal has never paid on the claim, and as far as I am concerned, *Paypal's fraud* worked hand in hand with the sellers' fraud.
No, it is NOT TRUE that Paypal doesn't abuse customers in general. There is a class actual lawsuit that demonstrated that. I just never signed on to it, because plaintiffs in class action lawsuits typically never collect. But if Paypal ever wants me to consider doing business with them in any way, shape, or form, they'll first pay me back the money I lost, plus interest.
And yes, I am aware that Paypal is in the middle of a media blitz right now, which means that they probably are paying for "online reputation protection" as advertised on National Public Radio, and therefore I am probably going to be modded with a combination of "Troll" and "overrated" to make my post vanish. I've noticed that that has been the pattern these days.
So be it. I'm still going to post the truth.
Saying "they don't abuse customers" is false. I'll assume you said it in ignorance.
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
The bottom line? Come 2013, when the US is mandated to support EMV, card skimming will be a thing of the past. Stick your card wherever you like, nobody can do anything with your bank account*.
*there is, of course, a small caveat to this. As I said, each transaction is unique, so theoretically someone could skim a single offline transaction from you, but if they try to replay that transaction, there's every chance the transaction will then go online (the terminal AND the chip can demand to go online at any point), in which case the host will void it immediately. There's also plenty of upper and lower transaction limits, so for example if a transaction amount is above say $50 or $100, it HAS to go online or will fail outright.
Speaking as someone who was involved in the early NA EMV specs, there is one HUGE caveat to this:
All the devices that support EMV have a fallback sequence in case something goes wrong. This comes out of the department of redundancy department, as Visa moved a lot of its processes from back in the dialup authentication days forward into EMV.
End result? it's possible to block the chip slot such that when you insert a card, it reports an error and prompts you to use the magnetic stripe instead... which can be skimmed.
Until they mandate NOT using fallback to track1/track2 data, this avenue will still be possible.
There are also more advanced methods of extracting the customer keys from EMV cards (a German group pulled this off years ago) -- this doesn't give the transport or merchant key, which limits the amount of damage that can be done, but it still means the "private" data can be pulled off an EMV card and then encoded onto T2 on a card with a "damaged" chip.
The system needs to be adjusted if merchants want to ensure they're processing a PIN-verified transaction, as opposed to an unauthenticated transaction. It doesn't make the card inherently insecure -- you can't generate PIN-verified transaction using this method -- but it does open up the merchant for chargebacks because they didn't require a PIN. And if your card allows non-PIN transactions it could be stolen and used without the PIN.
There are a variety of solutions. The technical one is to have the payment processor send back terminal-verifiable data about the type of transaction, so the card can't lie to the terminal. But an easy workaround for a merchants and cardholders would be to have their payment processor refuse any non-PIN transactions; if only PIN-authneticated transactions are allowed this flaw becomes meaningless.
Paypal used to have an app that would run on PalmOS devices that would allow you to pay other people with paypal accounts. It seems the mobile payment stuff got dropped once they jumped in with ebay.
Damn it, "loosing" != "losing". I'm so tired of seeing this.
In the US effectively all transactions are already on-line, so the off-line use cases don't really exist. Other approaches have been found. Given the capability, it's possible that off-line might be used... but at the same time the proliferation of Internet access is making it often just as easy to do it on-line. Even on a train.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
Square is both a: a million times better and b: not paypal.
c: not available outside USA.
While millions of ppl outside USA may spiritually unite with your paypal-bashing, they have way fewer options for accepting payments.
PayPal says they plan to go Global with this but for now it's just the US. If you're in a European country (specially the UK) you can watch out for the release of mPowa. They will be first available in the UK and in some parts of Europe but they will be open to the North American market and other parts of the world after that. It may interest you that with mPowa you have an option to use a chip and PIN device. And also, process a payment manually. Of course, you can still use the card reader of you want. Their card reader device is sleek, less bulky than typical POS devices, there's no hardware to rent, its free for all time. All you pay is a small fee for each credit card or debit card transaction (.25%). There are no fees for making cash and check transactions, too. You can check their site http://www.mpowa.com/ so you can check them out yourself.