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MasterCard Forcing PayPal To Pay Higher Fees

Posted by Soulskill on from the and-they'll-pass-the-spendings-on-to-you dept.

iComp sends this quote from El Reg: "PayPal, Google Wallet and other online payment systems face higher transaction fees from MasterCard in retaliation for their refusal to share data on what people are spending. Visa is likely to follow suit. The amount that PayPal has to pay MasterCard for every transaction will go up as the latter introduces new charges for intermediated payment processors. This change is on the grounds that such processors don't share transaction details, which the card giants would love to get hold of as it can be used to research buying patterns and the like. Companies such as PayPal allow payments between users, so the party (perhaps a merchant) receiving the money doesn't need to be registered with the credit-card company. PayPal collects the dosh from the payer's card, and deducts a processing fee before passing the cash on to the receiving party. MasterCard would prefer the receiver to be registered directly so will apply the new fee from June to any payment that is staged in this way."

63 of 260 comments (clear)

  1. Card to Card payments by Microlith · · Score: 5, Insightful

    Perhaps if Mastercard and Visa hadn't allowed PaypaI to usurp what they could very well have done themselves, long ago, they wouldn't be in this situation. I've always wanted the ability to painlessly send someone money, directly, and it's idiotic that paypaI (and other 3rd party wallet services) are the only way to do it. Completely redundant.

    1. Re:Card to Card payments by DanielRavenNest · · Score: 5, Funny

      > I've always wanted the ability to painlessly send someone money, directly,

      Behold: http://bitcoin.org/en/

      It's not everywhere yet, but it will be soon.

    2. Re:Card to Card payments by Anonymous Coward · · Score: 3, Insightful

      Well, it's in your fairytale dreamland, that's certain.

    3. Re:Card to Card payments by wiredlogic · · Score: 2

      Let's see what happens after the current BitCoin bubble pops before making any prognostications about is long term viability.

      --
      I am becoming gerund, destroyer of verbs.
    4. Re:Card to Card payments by sgbett · · Score: 3, Funny

      In Big Bad Ben Bernanke's fariytale dreamland he is seeking help from the Childlike Empress, so that together they can convince Atreyu to believe in the USD, lest it blink out of existence through lack of faith.

      I'd say its a coin flip as to which one your money is safest in :)

      --
      Invaders must die
    5. Re:Card to Card payments by wiredlogic · · Score: 4, Informative

      That is an insecure option since checks have your account number on them which can be used for fraudulent access to your money. PayPal's escrow through an email address is far safer.

      --
      I am becoming gerund, destroyer of verbs.
    6. Re:Card to Card payments by jeffmeden · · Score: 4, Interesting

      Perhaps if Mastercard and Visa hadn't allowed PaypaI to usurp what they could very well have done themselves, long ago, they wouldn't be in this situation. I've always wanted the ability to painlessly send someone money, directly, and it's idiotic that paypaI (and other 3rd party wallet services) are the only way to do it. Completely redundant.

      The problem with those kinds of transactions is that they are inherently risky, since there is not a merchant on hand to blame in the event of a chargeback. Visa and Mastercard stayed the hell away from that nightmare, and it is telling that only a company as skeezy as PayPal has managed to make it profitable for so long.

      It used to be that Paypal and similar services weren't there to take away transactions from normal merchants (since only small "peer to peer" transactions, like you mention, went through them) but Paypal has grown to be a behemoth that has elbowed it's way into every online merchant's payment options, for some strange reason (what good is it unless you for some reason already have money stored at the bank of paypal?). Mastercard and Visa are naturally skeptical, because PayPal is basically taking mindshare that they could easily shift to their own credit service (if they wanted to start being regulated like a legitimate business, that is.) This is the writing on the wall that PayPal should either rethink their strategy, or accelerate it. Visa, in their own right, has started basically a competitive service (V.me) and is actively going at merchants to reclaim some ground.

    7. Re:Card to Card payments by an00bis · · Score: 2

      whoosh

    8. Re: Card to Card payments by finity · · Score: 2

      Are you suggesting that Bitcoin is as safe as the USD? One of those still works when the lights go out...

    9. Re:Card to Card payments by nabsltd · · Score: 5, Insightful

      Paypal has grown to be a behemoth that has elbowed it's way into every online merchant's payment options, for some strange reason (what good is it unless you for some reason already have money stored at the bank of paypal?).

      I can pay using Paypal, Google Checkout, etc., without ever giving my credit card number out to random websites.

      That's huge, as I don't have to trust the website quite as much. It still may be a scam of some sort, but at most I would be out the cost of that single transaction, since they won't be able to run up charges on my card.

    10. Re:Card to Card payments by Anonymous Coward · · Score: 5, Insightful

      Basally the problem is banks and credit card companies don't understand the concept of information security. like at all.

      Their transaction security model is vulnerable to replay attack (once a merchant has my credit card number and billing address they can charge my card whenever they want)

      What PayPal does is require me to log into their service and authorize any transaction before it will be executed. Thus they act as a buffer between my dangerously incompetent credit card company and the potentially villainous merchant with whom I am dealing.

      All banks and credit card companies have to do to kill PayPall forever is bring their transaction security model out of the 19th century.

    11. Re: Card to Card payments by Anonymous Coward · · Score: 5, Insightful

      USD doesn't work so well when the lights go out either. All the notes are the same size - unlike every other currency I've handled there's no easy way to tell them apart without being able to see them.

    12. Re:Card to Card payments by scottrocket · · Score: 3, Interesting
      Retailer: "Hello MasterCard? This customer just purchased a debit card from us, using your MasterCard - just letting you know, as per our reduced fee agreement."

      MasterCard: "Okay - what did they buy?"

      Retailer: "Our debit card." *click

    13. Re: Card to Card payments by newcastlejon · · Score: 2

      All the notes are the same size - unlike every other currency I've handled there's no easy way to tell them apart without being able to see them.

      I'm curious, how do blind Americans cope? Here in the UK the notes grow larger as denomination increases.

      As an aside, I think we have better portraits too: rather than previous prime ministers we have the likes of humanitarians, naturalists, composers (albeit overrated IMO), philosophers and engineers. The queen is on all of them, naturally, but having her face on things is pretty much half of all she does.

      --
      If God forks the Universe every time you roll a die, he'd better have a damned good memory.
    14. Re: Card to Card payments by rmdingler · · Score: 2

      Blind folks are at the mercy of bill sorting different denominations in their wallets and the honesty of the people they trade with here in The States. As for Bitcoins, there's a story circulating at work about a $400K California home for sale for cash OR 5500 bitcoins. It would be very neat to see things like that happen!

      --
      Happiness in intelligent people is the rarest thing I know.

      Ernest Hemingway

    15. Re:Card to Card payments by Jah-Wren+Ryel · · Score: 4, Informative

      All banks and credit card companies have to do to kill PayPall forever is bring their transaction security model out of the 19th century.

      What's worse is that they already have exactly that security model. Visa bought Orbiscom a few years ago. Orbiscom is the creater of "disposable" credit card numbers. You log into their system, specify a maximum limit and an expiration date and they generate a credit card number for you that is linked to your primary account. After a merchant charges that number it "binds" to them so that no ther merchants can charge it. Once the credit limit or expiration date is hit, the number stops working completely.

      Only a handful of banks use this - Bonk of America is probably the biggest one, they call it "shopsafe." But the only reason they use it is that they inherited it when they bought MBNA. I've been using Shopsafe for nearly 15 years now for all of my online purchases and I've never had a problem. MBNA used to advertise that they never had even a single case of fraud with ShopSafe, I don't know if that's changed or if BoA is too stupid to continue advertising it that way.

      --
      When information is power, privacy is freedom.
    16. Re: Card to Card payments by hawguy · · Score: 4, Informative

      Are you suggesting that Bitcoin is as safe as the USD? One of those still works when the lights go out...

      Don't count on your paper US dollars working when the lights go out. I was in an area with an extended power outage -- the grocery store down the street had emergency generators to keep the freezers and lights on... but they couldn't get their cash register system up and were unable to make any sales (not even cash sales) until the registers came back up. It took most of a day to get the registers working.

    17. Re:Card to Card payments by Darinbob · · Score: 4, Interesting

      But only if you also trust PayPal. PayPal is not regulated well under most banking or consumer protection laws. PayPal will lock up your money if there's a disputed transaction, with no recourse for the seller (it's hard to separate PayPal from eBay here, since eBay mandates the use of the PayPal option and it's the biggest use of PayPal). I'm baffled why someone would be worried about security of banks or credit cards but then happily get into bed with PayPal.

    18. Re: Card to Card payments by hedwards · · Score: 3, Interesting

      They take their pay in singles.

      But, AFAIK, the Bureau of Engraving has been directed to change that because of a lawsuit over that very issue. I'm not sure when the change is supposed to take place, but as far as I know the USD will be coming in different sizes in the future.

      Which for me is kind of a shame as it makes sorting a bit harder, but it's completely necessary.

    19. Re:Card to Card payments by hedwards · · Score: 4, Informative

      Check21 is why nobody with any sense uses checks anymore. The inability to get the check back after it's been processed makes it a lot more of a PITA to deal with forgeries than it used to be.

    20. Re:Card to Card payments by Jah-Wren+Ryel · · Score: 3, Interesting

      For me, the benefit is more about exercising control over what the mechant bills me. The anti-fraud stuff is secondary. These disposable numbers give me the safety of mind that the merchant won't be charging more than I want, be it through error or one of those bogus reocurring charge things.

      For example, I purchased a year long subscription to Consumer Reports because I wanted to look up some of their reviews for a couple of big purchases I intended to make last year. Their billing model is to automatically charge you for a renewal. I gave them a disposable number good for just one year's worth of subscription so that I didn't have to worry about them auto-renewing me when I wasn't paying attention and then having to fight it out to undo the charge. So now insterad of auto-billing me, they've sent me a couple of emails complaining that their system could not bill me. Makes me smile that I turned the tables on them. (as an aside, I think Consumer Reports has lost their way, adopting some really anti-consumer business practices - auto renewal and littering their website with identity trackers)

      There are other ways to do the same, like using a cash card bought at the local convenience store. For me, disposable numbers are just the most convenient way to exercise that control.

      --
      When information is power, privacy is freedom.
    21. Re:Card to Card payments by Jane+Q.+Public · · Score: 4, Interesting

      "That wasn't viable until the Check21 act was passed in October of 2003. Paypal was already 3 years old by that point. And really, it wasn't until the past 2 or 3 years that banks have been accepting customer-side deposits by scanning."

      That's not even remotely true.

      A check is nothing more than an order for a bank to pay somebody money. While banks prefer that they take the particular form that the bank issues, they don't have to. Checks have been written and accepted on underwear, and even on the side of a pig.

      A check has never had to be scanned. It can be handwritten, printed, or anything else. Ever since the 90s, you have been able to get check printing software (and even the legit kind of machine-readable magnetic ink) that let you print your own checks with any bank and account numbers on them. And they are legally LEGITIMATE checks, as long as they are authorized by the account holder.

      I had somebody pass a printed check on my account once, without my permission. It didn't look anything at all like a normal check from that bank. But the bank didn't bat an eyelash. They just paid it.

    22. Re:Card to Card payments by Local+ID10T · · Score: 2

      last time I bought something through paypal, there was a (not very obvious) option at paypal's site to use my card without creating an account. It may not have been there (or have been better hidden) when you went, though.

      Most of the time yes. But these particular sellers will pop up that they won't accept any sales to people that don't have a Paypal account. Seems odd, but then so are some ebay sellers.

      You misunderstand.

      MY businesses is one that accepts only PayPal for eBay purchases. That does not mean you must have a PayPal account to pay. You can pay PayPal with your credit card, using the guest checkout option.

      Since eBay has a reputation for buyers who claim non-receipt or pay with fraudulent credit cards, forged money orders, stolen checks, etc. and since eBay requires all sellers to accept PayPal anyway, it is safer for us to rely on PayPal's seller protection guarantee (we provide a tracking number for delivery confirmation, we get paid.)

      There is an option to require a verified delivery address, which requires that the address you request to have your package shipped to match the billing address of your payment account...

      --
      "You want to know how to help your kids? Leave them the fuck alone." -George Carlin
    23. Re:Card to Card payments by Jane+Q.+Public · · Score: 2

      I didn't make it clear how I was connecting this to what you were saying.

      Any bank could accept any scan, at any time. Or a fax. Most of them just didn't. But that was a matter of bank policy, not law.

    24. Re:Card to Card payments by Grishnakh · · Score: 2

      I really hate to write in support of some faceless corporation, but my experience is similar: I sell stuff online from my website, and Paypal is the only way I accept money (except for money orders from the occasional Paypal hater, and company checks for large orders; I plan to add google checkout in the future). I've never had a problem with them freezing my money (though I do keep my balance relatively low and only give them ACH access to a separate account with $100 in it in case they go nuts). Their fees are the lowest I've seen (Google Checkout appears to have identical fees), much lower than the traditional card processors. It'd be nice if the fees were lower, but they appear to be set by Visa/MC so it's probably out of their control.

    25. Re: Card to Card payments by adolf · · Score: 3, Insightful

      Let's just legislate convenience and free ponies while we're at it. After all, more laws always fixes stuff.

      There is a sandwich shop downtown that closes for two weeks every summer, just to allow every person there to have some time off. I suppose you'd like to legislate away their ability to do this, too: How dare they stop operating just because they feel like it!

      --
      Kid-proof tablet..
    26. Re: Card to Card payments by Opportunist · · Score: 2

      Sounds like the US government doesn't comply with its own ADA.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    27. Re: Card to Card payments by Opportunist · · Score: 2

      And how long do you think this will be "readable", considering the treatment those bills receive?

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    28. Re: Card to Card payments by hawguy · · Score: 2

      I'm not sure how this could be enforced - power outages often come along with another disaster (earthquake, hurricane, etc), so in many cases merchants may not be able to even travel to their store, or the store may be severely understaffed.

      Same way you handle all disaster readiness scenarios ... you check on them in advance and confirm compliance of the ability to do so BEFORE the disaster comes.

      And how do you check that a store is staffed adequately BEFORE the disaster strikes? Do you require a certain number of employees to live within walking distance? Do you ensure that they live in houses that are outside of a flood zone (or meet some minimal resistance to seismic hazards?) What do you do when half the town is asked to evacuate? Do the cashiers get special ID cards that let them stay behind to help serve remaining residents and disaster workers?

      Also, for big-box stores with lots of inventory, there's a security concern with having a lot of cash on-site when electric cash recyclers and other forms of securely storing money may not be working, and armored car service may not be running.

      So you're seriously saying that its a problem because they make too much money ... I would love to have those problems, though they really are easy to solve.

      If you want to have that problem, try working the graveyard shift at a 7/11 in a bad part of town - you'll see what it's like to have too much money, and people who are desperate to have it.

      What is your solution to having too much cash on hand? Even corner supermarkets have problems with too much cash. What do you tell the minimum wage workers who are federally mandated to work during a disaster "Dear employees, you'll have $50,000 of cash on hand, no way to get it to the bank, police will be unable to respond to a robbery, so you're pretty much on your own in a disaster. Good luck"

      Not having 'big' box stores in the first place would be a good start.

      Good luck convincing most of the USA that the convenience that they've become accustomed to is no longer good for them. That went over great in NYC when they tried to ban large sized drinks.

      Not that I think any of these things should be mandated. If the power is out for any length of time the store will compensate. People are going to want to make money and sell things,

      Do you really think Home Depot cares if 5 stores out of 2000 are closed for a week due to a hurricane? They'll sell plenty after the power comes back on, no need to spend a hundred thousand dollars on a backup generator to keep a store open when they don't even know if employees are going to come in.

      believe it or not, this was actually possible without cash registers at all at one point in time. This is actually what I use as the start of my argument as to why calculators should be illegal.

      Yeah, well people did a lot of things before modern technology, but that doesn't mean things were better back then.

    29. Re: Card to Card payments by Phroggy · · Score: 2

      Isn't there some kind of braille encoding on US bills like on canadian money?

      Not currently. They're starting to talk about it. Check again in five years.

      --
      $x='S24;r)>63/* h@<5+oZ)32"5cz';$me='phroggy'x$];
      $x=~y+ -xz+\0-Tx+;print$_^chop$me for split'',$x;
    30. Re: Card to Card payments by hawguy · · Score: 2

      Not that I think any of these things should be mandated. If the power is out for any length of time the store will compensate. People are going to want to make money and sell things, believe it or no

      The problem is... people don't generally stock up food in modern times, so if the store shuts down unexpectedly, people may starve to death, or there may be chaos on the streets, because 20% of people ran out of this week's supply and can't buy food they need to survive.

      You seem to be under the impression that grocery stores stock vast amounts of food -- they don't. If those daily delivery trucks stop coming, most stores will start running out of food in less than a day. Google Maps shows about 80 grocery stores in my town of 800,000 (this includes many small corner markets as well as big Safeways and Luckys), so there are about 1000 residents per store. Imagine 1000 hungry people walking down an isle in your store and guess how long it will last. Stores regularly run out of staples just when bad weather is announced, and that's when they can still get delivery trucks in.

      The people that would riot in the streets if they can't buy a cheeseburger are the same people that don't have hundreds of dollars in cash stashed at home just in case a disaster knocks the power offline for a week. Many of them work hourly jobs and will have no income during that time and literally live paycheck to paycheck.

      Food is not the most important thing to have in a disaster - most people will have at least a couple days of non-perishable foods on their shelves and refrigerators (which will still be cold for up to 24 hours) at home... they may not have any way to cook it, but they'd have the same problem with grocery store food. People can go for days without food without any ill effects, most people are even fine after going weeks with no food, but people will start dying quickly if they have no source of fresh water for drinking and sanitation - imagine 1000 residents of an apartment building using the street out front as a toilet when the water in their building stops working.

      So what you're proposing solves the least important part of a disaster response but drives up food prices for everyone.

      Stores provide convenient shopping, but without regulation to the contrary, they have no reason to prepare for extreme contingencies such as long-term power outages -- its cheaper to not be prepared for them; having employees available and trained to work without electricity is more expensive.

      It makes sense that requirement that stores meet certain standards of preparedness should be part of a locality's disaster planning.

      What good is a store's disaster planning if they can't get supplies trucked in? Any community that relies on stock on-hand in a disaster is a community that will have a 1 day disaster plan (and if the disaster lasts one day, it's not much of a disaster).

      A certain standard of reliability: they're not just going to temporarily close up shop, whenever disruption of infrastructure makes it inconvenient to due business; even if they will operate under reduced profit, or have to mark up items to a higher price to properly cover their additional costs,

      It's illegal to mark up prices during an emergency.

      or to adjust to the new equilibrium between supply and demand during the emergency, it's better than closing up shop, and they should be required to stay open, unless there is an evacuation,

      So when there are 500 people lined up outside and enough food/supplies inside for 100 of them, how do you expect the 5 employees inside to "adjust to this new equilibrium"? Do you expect the store employees to enforce rationing? I'm sure you've seen the Christmas mobs that literally trample other customers to get the latest Christmas present - do you think people will form an orderly line at the door and listen to the sales clerk when he says "O

  2. Pass the buck by dciman · · Score: 4, Insightful

    Guess end users will be seeing a fee increase coming our way. Awesome.

    1. Re:Pass the buck by Krojack · · Score: 5, Insightful

      I think on every transaction PP should list:

      PayPal Transaction fee: $x.xx
      *Mastercard Fee: $x.xx

      * This fee is due to PayPal refusing to tell Mastercard what it is you're buying so they are now charging PayPal more. Their end cost has not increased, they are just greedy and want more money.

    2. Re:Pass the buck by flimflammer · · Score: 3, Interesting

      I would not call them honest dicks. They're just dicks. They might just be lesser dicks in this instance.

  3. You have to pay to play! by default+luser · · Score: 4, Insightful

    You remember when credit cards used to have annual fees? They didn't just forget about those costs, they just found new ways to make money off you!

    --

    Man is the animal that laughs.
    And occasionally whores for Karma.

    1. Re:You have to pay to play! by isorox · · Score: 2

      Interest?

      Never paid it. Each month a direct debit pays it off. I just get referee. And, free insurance, and free cash back. The retailer pays for this, but they don't give me a discount if I pay by debit card, so why should I?

    2. Re:You have to pay to play! by mattack2 · · Score: 2

      The credit card companies are making money indirectly through my use of them, but on each individual purchase, I am paying the same _or less_ than if I were paying via cash or check, and it's more convenient than either. Of course I am counting cash back in that calculation.

      They're paying *me* to get a free (interest wise) average 15 day loan of their money, since I pay in full every month. One of my cards did change back to having an annual fee in the past year or so, but IIRC when I figured it out at the time, the usage to avoid the fee was already way below the amount I use it for (normal daily purchases) or easily covered by the cash amounts I got.

  4. can they get away with this? by sribe · · Score: 4, Interesting

    I smell some antitrust concern here...

    1. Re:can they get away with this? by Anonymous Coward · · Score: 3, Insightful

      Your concerns are noted and ignored. The goverment would also like to know who is sending money to who. Since they can't know, they'll have no problem with extra being charged instead. For now. Eventually it will require disclosure of all paypal transactions.

      The excuse trotted out will be one of... Drug dealers, Terrorists, Or tax evasion. Maybe all three.

      Bet.

  5. No idea who to root for in this... by Lendrick · · Score: 5, Insightful

    Paypal and Mastercard are both horrible companies. I suppose I should side with the company trying not to share my personal data, but Paypal is incredibly sleazy and dishonest in its own right.

    1. Re:No idea who to root for in this... by Beerdood · · Score: 5, Interesting

      I know! It's like watching two school bullies argues start to argue over something, as you're secretly hoping they'll get into a fight and both be suspended.

      I could see MasterCard taking more of the hit for this though, Paypal funds can be added without any fee from a bank account, or with some new MoneyPak thing I'm just reading about for the first time - I forsee more people using this option if they have hefty fees when transferring from a credit card (Because the whole reason you're using Paypal is because you can't use your credit card in the first place, the money will be transferred if it has to be).

      --
      Global warming and other natural disasters are a direct effect of the shrinking number of pirates - Gospel of the FSM
    2. Re:No idea who to root for in this... by Artraze · · Score: 2

      Indeed. It is a little nice to see folks you don't like slug it out, and I dare say my opinion of Paypal almost went up slightly.

      Still, we have to face that fact that in the end all this information is ending up in the same place. It's just a matter of who makes money selling it.

    3. Re:No idea who to root for in this... by dj245 · · Score: 4, Insightful

      I know! It's like watching two school bullies argues start to argue over something, as you're secretly hoping they'll get into a fight and both be suspended. I could see MasterCard taking more of the hit for this though, Paypal funds can be added without any fee from a bank account, or with some new MoneyPak thing I'm just reading about for the first time - I forsee more people using this option if they have hefty fees when transferring from a credit card (Because the whole reason you're using Paypal is because you can't use your credit card in the first place, the money will be transferred if it has to be).

      There is no way on this earth I am giving Paypal my bank account number. They have a long an continuing history of tomfoolery regarding people's money. I need a way to dispute their withdrawals if needed, and with ACH, once the money is gone, it's gone. With a Visa or Mastercard, generally you can dispute it.

      --
      Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
    4. Re:No idea who to root for in this... by Opportunist · · Score: 2

      It's yet another AvP situation: Whoever wins. We lose.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
  6. SLightly confusing summary by Spillman · · Score: 2

    So, this article is basically saying that if you receive credit card payments from PayPal and you aren't registered then you have to pay more? well, paypal has to pay more, but the savings will be passed on to you. Is there any source of what transactional data is shared? As someone who works with electornic funds transfer software, I only ever see non-personablly identifiable info in transactions. I can't say I blame Mastercard either, fraud is a major problem in this world. so until I see some real evidence, I will just assume that the author here is some tin-foil hat wearing privacy nut. but I will hapiily change my opinion if there are new facts....

    --
    sig?
    1. Re:SLightly confusing summary by wiredlogic · · Score: 2

      Is there any source of what transactional data is shared

      All of it.

      Before the modern era of internet driven big data there were companies like Acxiom (est. 1969) aggregating data from credit cards, store cards, gas cards, telephone books(*), and whatever other consumer data they could get their hands on so it could be resold for market analysis.

      If you use any form of electronic identification, they know what products you buy at which stores and at which time. This then is used to profile people so that companies like bulk mailers can target the wealthy, or the poor, or fertile women or whatever slice of the population you want to direct advertisements at.

      *) They would actually send telephone books out of country so they could be hand transcribed by low rent data entry clerks. This was before OCR was reliable and telephone companies were willing to share their data electronically.

      --
      I am becoming gerund, destroyer of verbs.
    2. Re:SLightly confusing summary by Anonymous Coward · · Score: 5, Interesting

      MasterCard already has access to personal data from the card issuing side (they can know everything your bank knows about you, which is considerably more than what a merchant might know). The issue here is that PayPal is acting as a screen so MasterCard/Visa cannot be sure of the nature of the downstream merchant (this is the data they are not getting from PayPal). This has monetary consequences for MasterCard because some of their fee structures differ by industry, but more significantly they track chargeback and loss rates by merchant industry. I think this is less about monetizing purchasing data (though there is certainly an element of that) and more about scaling their fee structure to known loss paterns.

    3. Re:SLightly confusing summary by Ungrounded+Lightning · · Score: 3, Insightful

      I think this is less about monetizing purchasing data (though there is certainly an element of that) and more about scaling their fee structure to known loss paterns.

      If that were the case, they could scale the PayPal fee structure according to the aggregate PayPall loss rate.

      Nope. Looks to me like it's about profit from monitizing the customer data and trying to replace that revenue stream because they were unable to get the data from the PayPall transactions.

      --
      Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
    4. Re:SLightly confusing summary by Your.Master · · Score: 2

      If that were the case, they could scale the PayPal fee structure according to the aggregate PayPall loss rate.

      This article is literally about scaling the PayPal fee structure. You can't just say "nope".

  7. Credit cards have ruined the value of money. by Anonymous Coward · · Score: 2, Insightful

    Saving up to buy a nice widget used to mean something, now everyone just buys junk after junk with no planning, all while accruing enormous debt. This house of cards is just waiting for the right wind to knock it all down.

    Quite frankly we deserve it.

  8. Crap ... by gstoddart · · Score: 3, Interesting

    So the company I won't do business with because I don't trust them is being sued by the companies I'm stuck with because the ones I won't do business with won't share enough of our data with them?

    So, we're fucked then -- the megacorps have utterly won the privacy and financial data battle, the advertisers know everything you do because of it, Google and everybody else reads your email, and the government can collate the whole damned thing if they declare they Need To.

    Dammit, the tinfoil isn't working any more. :-P

    --
    Lost at C:>. Found at C.
    1. Re:Crap ... by EmagGeek · · Score: 3, Insightful

      Just pay cash for stuff.

  9. Re:People STILL use CCs with PP? by XanC · · Score: 4, Insightful

    Your solution to your credit card number being vulnerable to theft is to give away your bank account number instead? Brilliant!

  10. Re:This woudl be ok, but... by ebno-10db · · Score: 4, Insightful

    I would be fine with this except Visa and MasterCard are already acknowledged as a single Monopoly

    And heaven forbid that the we regulate any monopoly or finance company in a meaningful way. Thanks to one of the most absurd SCOTUS decisions ever, they can charge interest rates that would embarrass Louie the Loanshark. Even worse may be the transaction fees, which even without the "special rates" for PayPal, etc. are something like 3%. Ask anybody with a small business that has to take CC's to stay in business, and see what they think of it. In organized crimes cases this is called skimming, but apparently it's ok if you're incorporated. In Australia the fees are regulated to 0.5%, and the credit card companies still do just fine down under.

  11. Re:People STILL use CCs with PP? by roc97007 · · Score: 3, Informative

    I think he's saying that he maintains two bank accounts, the one in which his paycheck gets deposited, and a separate, unconnected bank account he uses specifically for paypal. It's actually a pretty good strategy.

    --
    Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
  12. Re:Slowclap by Anonymous Coward · · Score: 2, Funny

    It's not a human. It's a bot program written purely in hostfile.

  13. Please do by rduke15 · · Score: 5, Funny

    <quote>I've always wanted the ability to painlessly send someone money</quote>

    Please do! Here is my IBAN number: CH14 0025 5255 F665 2263 0

    Thanks.

    1. Re: Please do by icebraining · · Score: 2

      I don't know what kind of incompetent banks you have where you live, but banks here don't let anyone with an IBAN set up a direct debit. Our direct debits here in Portugal need to be authorized by the account holder, after proper authentication.

      --
      Dilbert RSS feed
  14. Re:security by rduke15 · · Score: 2, Interesting

    banks and credit card companies don't understand the concept of information security

    They do. But they are not concerned about things like password theft, because neither the bank nor their customers lose money that way.

    So nobody cares about what you may perceive as bad security. As this PDF linked from this recent /. story shows, only third-party suckers lose money when a bank password is abused.

  15. There's things they LOVE to know about. by Ungrounded+Lightning · · Score: 4, Interesting

    The excuse trotted out will be one of... Drug dealers, Terrorists, Or tax evasion. Maybe all three.

    Actually, those will be the real reasons, too.
    What, you think the feds care what you're spending your money on? You're delusional.

    Actually, they'd love to know about a lot of your spending. For instance:
      - If you buy a gun: Then they'll know who to search if/when they decide to confiscate them.
      - If you buy gold, silver, or other long-term store-of-value commodities: If/when the dollar weakens they can make those illegal to possess and confiscate them to try proping pu the failing dollar and heading off a competing currency, forcing people to stick with the printing-press fiat money. (They already did that with gold during the Great Depression.)
      - If you buy a bunch of long-shelf-life food or other "survivalist" supplies. It's stuff to raid in a crisis and an indicator of who the non-sheep are.
      - If you buy political literature of a non-mainstream nature.
    I could go on for pages.

    --
    Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
  16. USA: get your shit together by houghi · · Score: 4, Informative

    In Europe (at least in Belgium and the Netherlands and probably in other countries as well) VISA, MasterCard nor any other credit card company will know what you used your card for.
    They will see where you bought it, but not for what.
    So if you pay with it at a supermarket, they will not know if you bought only alcohol or baby food or condoms.

    In Belgium it is even illegal to do any analysis of what type of stores or how you use your credit card. So no analysis if you spend it in other countries, online, at gas stations or just for getting cash from a machine. (In the Netherlands this is allowed)

    This all because of privacy and protection of the consumer and other communist shit. Yet those companies still make money.

    So if Europe can do it, so should the US be able to pass a law for the people to not let credit card companies know this kind of detail (or any other type of company).

    Also when I pay with my card, the company that I do my payment is not allowed to do anything with it. The companies I worked for were not able to do any analysis on credit card sales, because we only had the transaction number, the last four numbers of the card and some other stuff to make it possible to identify the sale, but not enough to link different sales to one person even when done with the same card.

    Oh, and while you are at it, change to using the chip reader like the rest of the world. It is so much safer (not perfectly safe). If the rest of the world was able to pay for the change, I am sure you could bare the cost as well.

    --
    Don't fight for your country, if your country does not fight for you.
    1. Re:USA: get your shit together by Maudib · · Score: 2

      "In Europe (at least in Belgium and the Netherlands and probably in other countries as well) VISA, MasterCard nor any other credit card company will know what you used your card for."

      This is true for the most part in the U.S. too. With the exception of stuff like hotels & airlines where the CC company has a deal in place*, credit cards do not get line item details for the vast majority of transactions. There are tons of companies starting up right now to try and figure this out, however there are real technical challenges plus retails have no desire to give the info up.

      The article summary is misleading.

  17. eBafia/PreyPal by PhilipCohen · · Score: 2

    Visa and MasterCard have ~90% of the payments market between them (and Amex another ~8%); the clunky PreyPal has ~1%, most of which rides on the backs of Visa/MasterCard PreyPal has never been, and never will be, any real threat to these three operators PreyPal at physical POS is simply a joke, and a very poor one at that Regardless, this suggested MasterCard extra fee is the least of the clunky middleman PreyPal’s problems. Give it another twelve months and the new "professional" digital wallets from Visa (V.me) and MasterCard (MasterPass) will have driven PreyPal, eBay's hard working bilge pump, back into the rusting eBay bilge http://bit.ly/UVXx53 And then there is the ugly reality for consumers dealing with the rest of the clunky, manipulative, unscrupulous eBay complex ... "eBay-Facilitated Shill Bidding Fraud on eBay Auctions: Case Study #5" ... http://bit.ly/11F2eas Should be fun to watch the rusting old scow, eBay, finally slip beneath the waves