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Could PayPal Be an In-Store Option?

samzenpus posted more than 3 years ago | from the expanding-markets dept.

The Almighty Buck 205

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."

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I have a debit card with chip-and-pin. (2, Informative)

Soluzar (1957050) | more than 3 years ago | (#36417108)

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.

Re:I have a debit card with chip-and-pin. (1)

thsths (31372) | more than 3 years ago | (#36417252)

Paypal could be a safer option - with online verification, a secret code in your mobile, and a password to enter. I think they may be on to something - something that certainly involves a good cut for them :-)

Re:I have a debit card with chip-and-pin. (1)

smallfries (601545) | more than 3 years ago | (#36417474)

Seriously? You think that that a transaction that authenticates the identity of the payee through physical contact and sends the transaction over a private network is less safe that one that operates with dubious authentication over an untrusted network? Why don't you think that over while I count my blessings that you don't do this for a living.

Re:I have a debit card with chip-and-pin. (5, Insightful)

bmo (77928) | more than 3 years ago | (#36417508)

>Paypal could be a safer option

For who?

Vendors?
Customers?

From what I've heard is that everyone hates them, that they're forever screwing over both sellers and shoppers, day-in, day-out, 24/7 on Ebay, but since Ebay is a captive market, there aren't any real alternatives.

Why, on Gawd's Green Earth, would you want to take their abuses and expand them out into meatspace?

Credit card companies, as much maligned as they are, treat their customers (both vendors and shoppers) far better than Paypal has ever done for their own customers.

As a purchaser, you are better off with a regular or secured credit card and pay it off at the end of the month (this is key) than ever dealing with Paypal. You get extra warranties, cash-back, fraud protection, frequent flier miles, etc. Indeed, just comparing credit card fraud protection to Paypal's version of "fraud protection" and the differences are staggering. Only a fool would pick Paypal.

--
BMO

Credit card companies are far more dangerous (3, Insightful)

Colin Smith (2679) | more than 3 years ago | (#36418464)

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.

Re:Credit card companies are far more dangerous (2, Insightful)

Jibekn (1975348) | more than 3 years ago | (#36418600)

Until PayPal is regulated under the same accountability as a bank, Ill never use them in cyber, or meat space.

A bank cant just freeze your account for no reason, paypal can.

PayPal is a bank in Luxembourg (3, Interesting)

tepples (727027) | more than 3 years ago | (#36418666)

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.

Re:Credit card companies are far more dangerous (0)

Anonymous Coward | more than 3 years ago | (#36418854)

Banks and credit card companies are orders of magnitude more dangerous than PayPal. Paypal are small potatoes on the Evil scale.

Are you familiar with anatidaithopters? There's a number of them you can go and feed at my local park. They look like ducks, and the quack like ducks, they even walk and swim with ducks, but Homeless Larry, who lives on the park bench, assures me they aren't ducks. And if we were to give them the same financial clout that ducks have traditionally had, (but none of the oversight and regulations that ducks had, mind you, because they're not ducks) there's no way we'd suffer the same massive financial crisis that ducks brought us, because they're not ducks. We know this because their leader has assured Larry that it is the case, and Larry knows he can trust them, because anatidaithopters don't lie like ducks do.

</sarcasm>

If you're concerned about the power wielded by major banks, don't use them. You don't have to get a credit card through Chase or BOA or Citi or CapitolOne - when I opened my account at my local credit union, they offered me a credit card (with decent interest rates, too). My local credit union only had a minor effect if any on the crash, and was practically unscathed by it (aside from by LIBOR-pegged interest rates, which are horribly low). Even if there was an issue with the CU, it would have been partly my fault, as being a member means I'm part owner (to open an account, you effectively buy $5 worth of stock, which you sell back for $5 when you close your account), and I get to vote on the board election every year. People who gripe about big banks, somehow still put their money there, even when there's better options.

That won't get you around the major credit card processor (e.g. Visa, MasterCard, etc.), but to be honest they weren't all that much involved in the Great Recession (aside from high debt loads Americans carry, which was actually more the card issuers' fault, not the card processors'), and weren't even around during the Great Depression.

If you think, if we were to give them the same financial clout that banks have, that PayPal wouldn't fuck the world over like the banks did, you are seriously deluded.

Re:I have a debit card with chip-and-pin. (1, Interesting)

npsimons (32752) | more than 3 years ago | (#36418928)

Credit card companies, as much maligned as they are, treat their customers (both vendors and shoppers) far better than Paypal has ever done for their own customers.

Credit card companies are maligned for a reason: they acted just like Paypal before the eeebil gubbermint stepped in and and regulated them. If it weren't for government regulations, people would be still getting fucked over by CC companies and banks (and despite the regulations, people *still* get screwed). This is why Paypal keeps wanting to play it both ways and insist "we're not a bank!" because it means they'd be subject to a whole pile of rules to prevent exactly what they do.

Re:I have a debit card with chip-and-pin. (0)

Anonymous Coward | more than 3 years ago | (#36418022)

Please, fucking God no.

As of now, when I use a credit card, uses of it are corellated between the store I use which tracks every single purchase done and sells that info, the credit processor who has some limitations on revealing the stuff they process, and my bank which can't sell private transaction information.

I don't want PayPal, Google, or what the hell-ever as a third intermedary. All they will do is just take any payment data they get and sell it to whomever wants it.

A purchase of condoms I buy 5 years ago may haunt me when a patent troll decides that he can sue all of Trojan's customers, so goes through logs of people's purchases bought and starts a wide legal fishing expedition.

There are already too many schmucks involved in a purchase. Last thing we need are ones that will sell anything they know, corellate, or even dream to people who you really don't want to have that info (DAs looking for massive prosecutions for election year, sue-happy law firms looking to drag thousands of defendants in court at the same time, insurance companies looking for any dirt to raise rates, etc.)

This BS is getting out of control already. On FB, there was a friend of mine holding a pipe posted. A week later, his health insurance company demanded a piss test to verify his claim as a non smoker.

Re:I have a debit card with chip-and-pin. (1)

antifoidulus (807088) | more than 3 years ago | (#36417320)

Depends on how paranoid you are I guess :P One nice thing about the Suica(and Passmo, hayakaken etc) contact-less cards is that they can be anonymous*. You can get them with your name on them, which has the added benefit of getting a replacement with the value still on it, but you can also get them with no name. Which means that wherever the cards are accepted(trains, most convince stores, some restaurants), you can pay for things as anonymously as you can with cash without having to fumble around for a billion coins. Pretty nice system if you ask me.

*(You can only buy the actual card from certain vending machines in the train station, theoretically they could snap a picture of you when you buy the card and use that to track you, but I sincerely doubt they do anything like that).

Re:I have a debit card with chip-and-pin. (1)

hitmark (640295) | more than 3 years ago | (#36418086)

Do the vending machine take cards as payment or just cash?

Re:I have a debit card with chip-and-pin. (1)

grqb (410789) | more than 3 years ago | (#36417348)

I think this is more about the merchant than the buyer. I assume that paypal could make this cheaper for the merchant than the current norm (ie. merchant having to pay for a credit card processing system where a simple tablet and wifi/3G connection could work).

Re:I have a debit card with chip-and-pin. (0)

Anonymous Coward | more than 3 years ago | (#36417464)

Not if they have to maintain their credit card processing system as well, which they almost certainly will. The one thing merchants really hate is having to refuse a sale because they couldn't take your money.

Compare to PayPal Website Payments Pro (1)

tepples (727027) | more than 3 years ago | (#36418696)

Not if they have to maintain their credit card processing system as well

PayPal Website Payments Pro already offers credit card processing. I had to code up support for its Direct Payment API in my last employer's shopping cart software. I can't see how it'd be that much of a stretch to extend that to card-present transactions.

Re:I have a debit card with chip-and-pin. (0)

Anonymous Coward | more than 3 years ago | (#36417618)

But Paypal does charge a hefty percentage for card transactions even if the infrastructure might be cheap.

Re:I have a debit card with chip-and-pin. (1)

Nick Ives (317) | more than 3 years ago | (#36418906)

In the UK, debit cards aren't covered by the consumer credit act. Under the CCA your card provider is liable for transactions over a certain amount (I think £50) which basically means if you don't like a product, you can give it back and tell your card provider you're not paying them.

If I use PayPal charged to my debit card (as I don't use a CC. I really should get one just to build my credit rating, but I never get around to it) it would mean I can use PayPal to get money back!

Re:I have a debit card with chip-and-pin. (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#36418978)

You'd rather have fewer payment options? I've helped friends out a couple of times via Paypal and their debit card.

Already done (ish) (1)

Dr_Barnowl (709838) | more than 3 years ago | (#36417112)

My local computer parts warehouse allows you to order from web kiosks in-house, and pay with PayPal.

Re:Already done (ish) (1)

SkyDude (919251) | more than 3 years ago | (#36417764)

Already done (no ish)

USBSwiper has created a POS [usbswiper.com] (point-of-sale) application using Filemaker. A merchant must have a PayPal account and be approved for Website Payments Pro and Virtual Terminal services offered by PayPal. Once that's done, USBSwiper will sell or rent the application to a merchant. Rental is designed for small merchants who need a trade show payment system or who might be a seasonal business, purchasing the application allows a web merchant to process mail and phone orders much easier than on most e-commerce shopping cart systems.

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.

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.

PayPal's venture into POS applications started with the development of their virtual terminal application, but only the smallest of retail merchants could use it. It just doesn't work in a high traffic retial environment. The USBSwiper application makes things easier, but the flat rate card acceptance fees is what makes it work for me. All other processors can go to hell as far as I'm concerned. Paypal is our choice for card acceptance and will be as long as they don't screw up or get greedy.

Re:Already done (ish) (2)

fluffy99 (870997) | more than 3 years ago | (#36418344)

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.

But remember (3, Interesting)

stinerman (812158) | more than 3 years ago | (#36417116)

They're not a bank!

If this went through, I'd be hard pressed to see how they could keep up that facade.

Re:But remember (0)

Anonymous Coward | more than 3 years ago | (#36417152)

Amex does it. Try filing a complaint against them with the OCC [treas.gov] and they'll say "they're not a bank and we don't regulate them." Ask them "Then who do I complain to about them?" "FTC"

Good luck getting the FTC to do anything.

Like with anything in the US, the big mega corps will just lobby and the best we the little people will get is a toothless "feel good" law.

Re:But remember (1)

Jibekn (1975348) | more than 3 years ago | (#36418622)

And this is why Amex is considered to be in the same league as a Discover card. At least outside America, hell, up here in Canada we take discover more than Amex.

Re:But remember (1)

gl4ss (559668) | more than 3 years ago | (#36417160)

well, they couldn't. but I guess they'd go on to say that amex isn't a bank and neither is UPS. anyhow, since you can already buy physical items with it.. it's only up to the store owners to start accepting it or not - and for them it probably means if it integrates with their cashier machine and automatic financial systems, they'll use it.

there's also probably a number of establishments and stores in beginning phase that would like to use them as the primary system, since through paypal they could accept the major credit cards as well(which can be expensive to setup, depending on locale..).

Re:But remember (2)

Colin Smith (2679) | more than 3 years ago | (#36417198)

You have no idea what a bank is or does.

Re:But remember (5, Funny)

ColdWetDog (752185) | more than 3 years ago | (#36417466)

You have no idea what a bank is or does.

That's OK. I'm convinced that my bank doesn't either.

They don't create money (1)

Colin Smith (2679) | more than 3 years ago | (#36417180)

What makes a bank a bank is that they are allowed to create and destroy money.

The analogy would be to think of a bank as being just like PayPal, but with nuclear weapons.
 

Re:They don't create money (1)

Ecuador (740021) | more than 3 years ago | (#36417326)

Ehm... You definitely don't know what "bank" means. There are special "banks" that create and destroy money, usually called central banks or something similar, and they are often not private (this depends on the country of course - for example for the US the Federal Reserve Bank is I think partly private).
But most banks cannot create or destroy money (unless by destroy you mean remove money from people's hands).
PayPal is free from regulation that banks have (which for example would not allow them to freeze your money whenever they please or arbitrarily decide whether to cover you from fraud or not etc), because they claim the are not a bank and apparently no-one who matters is interested in showing that is not show.
First of all, what is a bank? Let's see what PayPal themselves say a bank is. I am referencing the response someone from Paypal gave to a consumerist post that described them as an "unregulated bank" (http://consumerist.com/2010/05/keep-paypal-from-using-the-default-atm-debit-setting-to-save-on-bank-fees.html)

we're not regulated as a bank in the U.S. (we don't hold deposits or issue credit)

Huh??? They don't hold deposits? What do they call the money deposited on people's paypal accounts which from time to time they freeze at will?
They don't issue credit??? What is Bill Me Later then? (https://personal.paypal.com/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/BillMeLater_ProductOverview) What about the PayPal Mastercard? (https://personal.paypal.com/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/paypal_credit_card&nav=0.1.2). Yeah, *credit* cards are not "credit", easy to argue that...

Re:They don't create money (1)

hitmark (640295) | more than 3 years ago | (#36418074)

"In the real world, banks extend credit, creating deposits in the process, and look for the reserves later."
- Alan R. Holmes

And that guy was a ice President at the New York Federal Reserve.

Re:They don't create money (1)

Colin Smith (2679) | more than 3 years ago | (#36418168)

"Ehm... You definitely don't know what "bank" means."

I know exactly what a bank is and does, and the bog standard high street banks create and destroy money every day.

I suggest you go find out what money is before you lose everything.
 

Re:They don't create money (1)

poity (465672) | more than 3 years ago | (#36417364)

bank...create and destroy money

That's a central bank, or more accurately the authority overseeing the banking system, e.g. Federal Reserve or ECB. not the same animal as, say, Bank of America.

Re:They don't create money (3, Informative)

xelah (176252) | more than 3 years ago | (#36417490)

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%):

  • Person A deposits $100 with his bank. Total money in existence: $100 (not counting bank reserves).
  • The bank lends $90 to someone who uses it to buy something from person B. Person B puts it in his bank. Total money in existence: $100 (in person A's account) + $90 (in person B's account) = $190.
  • The bank lends $81 of this new deposit and it's used to buy something from person C. Person C puts it in his account. Total money: $100+$90+$81
  • ...
  • Total money at the end of the process: $100/10% = $1000.

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.

Re:They don't create money (0)

Anonymous Coward | more than 3 years ago | (#36417824)

No.

A bank can only lend out the money they have.. they are still not creating money.

Bank of America, for the purposes of this problem, has 1,000$ total in cash. So does USBank. The total amount of money in circulation between them is $2,000

Bank of America opens an account with Person A and they deposit 500$. BoA now has 1,500$

Person B comes along and gets a loan for 400$ afterwards. BoA now has $1,100 and an outstanding loan liability of 400$. They still have not created any money.

Person B deposits it in their bank account at USBank. USB now has $1,400. BoA has 1,100$. Note the fact that they still have not created any money, as we're still at 2000$ total money.

Now Person B pays interest on their loan, let's say 5%, for the next 12 months. The person finally pays off the loan in one go at the end of that 12 month period. That money is coming from their employer. BoA gains 300$ in interest from an outside source plus the 500$ they originally loaned out. While that 500$ was sitting in USBank's vault, they were loaning it out and collecting interest.

In reality, the banks never created more money, nor destroyed money. They gain money primarily through the risk of giving out loans, with the profit coming from the interest. That interest money still comes from inside the overall system, so it's just moving money around, not creating.

Re:They don't create money (2)

Colin Smith (2679) | more than 3 years ago | (#36418228)

You have no idea what you are talking about. The GP is correct.

Re:They don't create money (1)

Nick Ives (317) | more than 3 years ago | (#36418948)

Banks don't create money.

Central banks print money and lend it to certain banks with interest. In this manner the central banking system functions like a cartel. That money is is then spent as a capital investment in order to generate a return. The actual new value comes about from labour, as all value is generated by people doing things in order to make goods and services for people.

Re:They don't create money (1)

Colin Smith (2679) | more than 3 years ago | (#36418194)

"not the same animal as, say, Bank of America."

Bank of America creates and destroys money every day.

Do you work? Do you work for money? Do you even know what money is? I suggest you learn.
 

Re:But remember (1)

thsths (31372) | more than 3 years ago | (#36417258)

Actually they are a bank - registered in Luxembourg - since 2007.

Re:But remember (0)

Anonymous Coward | more than 3 years ago | (#36417302)

As long as they are not covered by FDIC, they are not a real bank.

Re:But remember (0)

Anonymous Coward | more than 3 years ago | (#36417370)

Only due to local Luxembourg law but it hardly affects how PayPal does business.

PayPal intends to become a bank in the long term. There are major regulatory hurdles they have to overcome from what they are today, to what is expected of a bank.

Re:But remember (0)

Anonymous Coward | more than 3 years ago | (#36417388)

Exactly. I'd say they are a criminal organization.
How I come to say such seemingly overblown thing?

Well, because it has happened many, many times, that because they somehow "disapproved" of someone's behavior, they "froze" his account.
The big problem with this is, that most of the time, they get to keep the money. Why? Because.
That's all you get. As there are no banking laws. Let alone something actually fair.

Look at Minecraft, which probably many here know.
He had a sudden big success. But once he did not take the money from his PayPal account for 3 months.
The problem: He ramped up $100,000 a month with it. and apparently, $300,000 was suspicious. So they simply blocked the account. And all the $300,000 were gone. Yay.
Now were it me, I'd hire a assassin for $100,000, to "remove" the blockage. Fucking bastards!
But Notch apparently remained calm, and managed to get the money in the end, from what I heard.

Whatever. That incident alone means that I will never ever do any business with them whatsoever.

Oh, and Google Wallet or whatever they are called, are not better btw. Same blockage crap. And if you know how hard it is to get a human being at YouTube to talk with you, you can imagine the impossibility of disputing that claim.

It's utterly unacceptable that they get to have any saying about what I do with my money in the first place. Imagine your bank going: "You suddenly got $5000, after years of $800 per month. So now, as agreed upon in the 30 page T&C, all your money belongs to us. [This is an automated message. No human will ever talk to you about this. Do not try to respond. Oh, and: Fuck you!] Have a nice day."

Re:But remember (0)

Anonymous Coward | more than 3 years ago | (#36417484)

Banks actually *will* freeze accounts for "unusual activity". In theory, they are following regulations and you can get your money back, but dealing with a large bank is not any easier than dealing with PayPal. The banks also put these holds on automatically, decided by a computer, and not reviewed for the typical customer.

Note that PayPal virtually always releases these funds if you keep after them long enough; again, no different than dealing with a bank.

Re:But remember (1)

Jibekn (1975348) | more than 3 years ago | (#36418772)

Except I can be talking to a human, at my bank in 30 seconds via telephone, and if it is a misunderstanding, such as with minecraft. It would be cleared up in minutes. This is possible because of the regulations banks have to deal with, you're not allowed (at least in my country, not USA) as a bank, to deprive someone of their money without just cause.

Do some searching, theres people who have trusted paypal with the payment methods of their legal, business licensed small businesses, and then have been literally bankrupted after paypal froze 10's of thousands of dollars for months while these peoples homes went into foreclosure. this type of thing doesn't happen with banks (they get you to go bankrupt in other ways, another topic, and you generally have to be stupid with credit)

Looking for trouble (3, Insightful)

schwit1 (797399) | more than 3 years ago | (#36417142)

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?

Re:Looking for trouble (0)

Anonymous Coward | more than 3 years ago | (#36417204)

What happens when Paypal gets hacked and people's checking accounts start getting drained?

Nonsense! It is very important for large corporations to ensure the security of their users' data, and therefore they are never successfully hacked.
If their system was insecure, people wouldn't want to be their customer, right? But they have lots of customers, ergo their system must be secure, as proven by the free market. Q.E.D, HAND.

Re:Looking for trouble (0)

Anonymous Coward | more than 3 years ago | (#36417234)

Uhhh, you've never had a corporate account, have you?

UPS, FEDEX, any payment processor, etc, needs a linked checking account for chargebacks. [wikipedia.org] this doesn't need to be a PRIMARY account, but it does have to be there: and it needs to have sufficient value in it to cover any required chargeback.

Re:Looking for trouble (1)

antifoidulus (807088) | more than 3 years ago | (#36417374)

Especially Paypal, I stopped giving them any information after they royally screwed up, fucked me over, then had the audacity to tell me it was my fault. When I first signed up with them I was suckered into giving them my checking account information so I could get like a $5 deposit. Well a few years had passed and I had totally forgotten about that account, I think I had the minimum required to keep the account open. So I go to pay for something that was like $10, and I selected my credit card, I know I selected my credit card because I would have never used that bank account to pay for anything, I knew there was nothing in there.

So despite the fact that I selected the credit card, Paypal decides to use my bank, and when that fails they used the credit card, but here's the thing, they kept on trying to withdraw the money from my account EVERY DAY, and this was AFTER they had already taken it from the credit card. And when I called them up to tell them to stop doing that, they refused, the manager basically called me a liar on the phone.

So I had about $100 in over withdrawal fees for a $10 purchase...fortunately my bank was cool and dropped the fees and blocked paypal from withdrawing any more money. At that point I deleted all my info with paypal, only keeping the account active for when I needed it. And even then I deleted all my credit card info. There are a few places I shop online that only take paypal, and in those events I enter my card info, buy what I need to buy, the immediately delete it again. Before Paypal screwed me over I was a loyal customer, but when management refuses to honor my request with my money when they already had there money and had no reason to try to take anymore, I refuse to give them any more business than I absolutely have to. Paypal sucks.

Re:Looking for trouble (1, Interesting)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#36418624)

I had a similar experience and resolved it by closing the checking account. PayPal then removed the account and reverted my PayPal account to 'unverified'. I didn't care until some years later when I hit the $10,000 limit that I was previously unaware of. Now I just enter my credit card number. It works to do this even on eBay purchases.

Re:Looking for trouble (1)

mr_lizard13 (882373) | more than 3 years ago | (#36417688)

I'm not familiar with US-based bank accounts and how they operate, but in the UK we have Direct Debit which is pretty much what you describe, and almost all banks offer it.

Banks who participate in the system are required to refund customers whose accounts are subject to an unauthorised debit. It's after the event of course, but the upsides and convenience factor of DD have made it wildly popular and for many outweigh the very real risk of fraud.

Does this system exist in the US? I hear a lot of transactions are carried out by Credit Card over there. In the UK most bills and regular payments are settled using Direct Debit, whilst Credit or Debit Cards are used for ad-hoc purchases.

Re:Looking for trouble (0)

Anonymous Coward | more than 3 years ago | (#36418190)

I wonder how similar that is to some ACH things.
(This is pulled from: http://dor.wa.gov/Content/GetAFormOrPublication/PublicationBySubject/TaxTopics/MandatoryE-file.aspx [wa.gov] because they are now requiring businesses to pay stuff by electronic methods and no longer accept paper checks)

# Electronic Funds Transfer (EFT)
You must register to use EFT.

        * EFT Debit: You authorize the Departmentâ(TM)s bank to withdraw the amount you owe from your bank account on the date you select. This happens automatically when you submit your return.
        * EFT Credit: You authorize your bank to send funds to the Departmentâ(TM)s account. You must initiate this payment each month.
E-check
You enter your bank account number and routing information to make a one-time payment. The transaction is free and only gives the Department permission to withdraw the amount that you authorize.

Pointless addendum (1)

tripleevenfall (1990004) | more than 3 years ago | (#36417154)

"personally I'm not sure how comfortable I'd be using such a system."

So how is this any different than using a debit card?

Re:Pointless addendum (4, Insightful)

spooje (582773) | more than 3 years ago | (#36417174)

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.

Re:Pointless addendum (2)

Jaktar (975138) | more than 3 years ago | (#36417312)

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.

Re:Pointless addendum (2)

pongo000 (97357) | more than 3 years ago | (#36417758)

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.

Re:Pointless addendum (1)

hitmark (640295) | more than 3 years ago | (#36418104)

"(meaning any transactions after this I will never see until I'm over the $400 threshold)"

huh?

Re:Pointless addendum (1)

0100010001010011 (652467) | more than 3 years ago | (#36418290)

PayPal is hands down one of the worst companies out there.

Back in the day when I was young and naive I bought a computer on eBay. The guy gave me the run around. I got nothing. Since I was young and dumb (and trusting) I let them debit my checking account. So I had 0 recourse with my bank (It's also the day I signed up with a credit card because every other person that bought from the guy. PayPal was 'only able to recover' $100 of the $1600 I paid.

Fast forward 5 months. I sell some Amazon gift cards. PayPal green lights the transaction as an 'authorized buyer', everything is good to go... then they come back that the card is stolen. Debit my account $900 and say that I owe them that much. Thankfully I didn't link it to my checking account. So they locked it.

It's been a cat and mouse game since then since some places on eBay ONLY accept PayPal. I'll open an account. Register a disposable card with them. Then they'll figure out that it's me. Remind me about what I 'owe' them and close the account.

Re:Pointless addendum (1)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#36418658)

PayPal allows you to pay with a credit card even if you have no account. I stopped using mine and started entering the number some time ago.

Re:Pointless addendum (2)

spire3661 (1038968) | more than 3 years ago | (#36417182)

Debit cards are issued by banks, subject to strict regulation. Paypal is not a bank.

Re:Pointless addendum (1)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#36418674)

Just like Madoff and Enron, so you're safe and protected by the Government.

Comfort level (1)

Waffle Iron (339739) | more than 3 years ago | (#36417170)

personally I'm not sure how comfortable I'd be using such a system.

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)?

At least PayPal uses a unique number for each transaction. In theory, that's an improvement.

The only thing that credit cards have going for them is the limits on customer liability for fraud. However, in the end that really just spreads the huge costs to everyone.

Re:Comfort level (2)

CohibaVancouver (864662) | more than 3 years ago | (#36417222)

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.

Re:Comfort level (2)

MoonBuggy (611105) | more than 3 years ago | (#36417240)

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.

Re:Comfort level (2)

swordgeek (112599) | more than 3 years ago | (#36417656)

"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.

Re:Comfort level (1)

mr_lizard13 (882373) | more than 3 years ago | (#36417742)

Do waiters still take cards from customers and walk off with them? In every restaurant I've been to since Chip & Pin was launched (5 years ago, or perhaps more?) they bring the card terminal over to you and you put the card in, enter the pin, and hand the terminal back to the waiter.

I wouldn't be at all comfortable if a waiter asked me to hand him/her my card, and if they stepped away from the table with it I'd want to know what they were up to.

Re:Comfort level (1)

TheGratefulNet (143330) | more than 3 years ago | (#36417968)

silicon valley resident here: yes, they still take your card and walk away. I've gotton the wrong card back, at times; and even had the wrong meal charged to me. I now try to pay in cash whenever possible at restaurants.

silicon valley and yet still pretty far behind in many tech ways (sigh).

I'm pretty sure how comfortable you are about this (1)

Qwrk (760868) | more than 3 years ago | (#36417184)

Likewise!

Down with the credit card companies. (0)

Anonymous Coward | more than 3 years ago | (#36417188)

PayPal is one of the best alternatives for paying for things aside from the credit card companies. (Assuming you don't use your linked credit card as your payment source.) CC companies skim anywhere from 1-5% off the top and that cost gets passed along to everyone else, regardless of their payment method. With PayPal, they can take the money directly from your checking account and avoid all those extra charges. Worried about your account getting hacked? Well, I haven't heard of that happening, but as a defensive measure I'd suggest not keeping a metric buttload of cash in your checking account in order to limit potential damage. Personally I hope PayPal can give Visa a run, and in the process lower prices for us all.

Re:Down with the credit card companies. (1)

Cwix (1671282) | more than 3 years ago | (#36417210)

I'm sorry sir, but your account has been frozen.
We dont agree with you politically so any money you had in your account now belongs to us.

Have a wonderful day,
Friendly PayPal rep.

Re:Down with the credit card companies. (1)

Repossessed (1117929) | more than 3 years ago | (#36417292)

Except of course paypal's fees are higher than credit card fees.

Re:Down with the credit card companies. (0)

Anonymous Coward | more than 3 years ago | (#36417596)

Worried about your account getting hacked? Well, I haven't heard of that happening, but as a defensive measure I'd suggest not keeping a metric buttload of cash in your checking account in order to limit potential damage.

IMO giving PayPal access to your bank account IS getting hacked. PayPal is underregulated and widely complained about. If anything goes wrong, whether a genuine mistake or not, you will find it nearly impossible to get anything but a computer generated reply. I recommend you do not use it, personally or for business, for any reason whatsoever. It isn't worth the risk.

Yo (1)

For a Free Internet (1594621) | more than 3 years ago | (#36417238)

This is awesome. It would be even better if I had any money, but my fucking puto crackhead cousin stole my wallet and Iá gonna kick is ass when I see him, you better believe it!

Paypal "could" have been many things. (1)

ron_ivi (607351) | more than 3 years ago | (#36417256)

IMHO the most promising would have been if it had become the leading micro-payment system for telephone calls -- which I thought was the plan when the same company bought both them and skype. Yet strangely it seems you could only buy skype credits with credit cards, and had a separate skype balance instead of being able to pay-per-call using paypal.

TL/TR. Sure, it could; but for that to happen the paypal guys would actually have to make it happen.

Catchup (0)

Anonymous Coward | more than 3 years ago | (#36417262)

They will be playing catchup with companies like Dwolla (www.dwolla.com) and even Google (http://www.google.com/wallet/).

It'll never be an option (3, Informative)

Pop69 (700500) | more than 3 years ago | (#36417286)

Because they're a bunch of scummy thieves.

http://www.paypalsucks.com/ [paypalsucks.com]

Re:It'll never be an option (0)

Anonymous Coward | more than 3 years ago | (#36417516)

Very true! And they are most certainly not on the side of the merchant. The consumers may view this as a positive but good luck setting up shop in my store.

Re:It'll never be an option (1)

TavisJohn (961472) | more than 3 years ago | (#36417624)

It just might. As banks try to charge customers for using their debit cards. And as banks charge as much as they can to BOTH retailers & consumers... If PayPal can undercut them, then I can see stores accepting PayPal,

And the general public will just see that they will be charged less for smaller transactions.

Re:It'll never be an option (0)

Anonymous Coward | more than 3 years ago | (#36417790)

You're wrong.

Of course thinking might come hard to you. After all, you live in the Detroit area, and only
a fool would choose to live there.

Re:It'll never be an option (0)

Anonymous Coward | more than 3 years ago | (#36417668)

Not that I don't think PayPal sucks (they really do), but that site is sponsored by the (self-proclaimed?) #1 PayPal alternative. The ad at the top goes to a page of this competitor and has the same design aesthetic as paypalsucks.com.

Re:It'll never be an option (1)

Graff (532189) | more than 3 years ago | (#36418936)

Because they're a bunch of scummy thieves.

Exactly, this is not just a "no" from me - it's a "hell no!"

I've had way too many problems with PayPal in the past to even think of trusting anything to them anymore. I don't don't care if they are reformed, repented, and remade, I'll have nothing to do with them. Any business which requires PayPal simply does not get my business and it'll never be an option for payment for me.

There can be only one (1)

nurb432 (527695) | more than 3 years ago | (#36417298)

on bank to rule them all.

Scary stuff.

Not for me with the insane fees... (2)

csumpi (2258986) | more than 3 years ago | (#36417350)

Paypal transaction fees are insane. Even a merchant account is charged 1.9% per payment.

Re:Not for me with the insane fees... (0)

Anonymous Coward | more than 3 years ago | (#36418972)

Paypal transaction fees are insane. Even a merchant account is charged 1.9% per payment.

You are a clueless asshat. That 1.9% is on a very few cards now in circulation. Any card that is not a basic credit card - a business credit card, an affinity card or any card that has rewards, cashback, etc. - costs a merchant well over the 1.9%. And, at the end of a month, read your merchant account statement closely. With transaction fees and all kinds of other fees, the real cost is far from 1.9%.

It already is an option for me. (1, Informative)

IANAAC (692242) | more than 3 years ago | (#36417356)

I have a Paypal debit card with a Mastercard logo on it.

Money can stay in my Paypal account and I can use it directly from there with the card.

Re:It already is an option for me. (1)

Anonymous Coward | more than 3 years ago | (#36417552)

I'm so sorry. Your paypal debit card is in reality a GE mastercard, and the connections between the GE system and the PayPal system are maintained by the sorriest excuses for software engineers I have ever seen. Once, they rolled out the Ebay branded card, and in the process de-activated every single existing paypal branded card in the system. Payment volume on these cards went to zero overnight. It seems that one of the devs in india didn't know the difference between '0' and '\0'; and the guys in Phoneix didn't bother with stuff like code reviews or defaulting new DB columns to something other than null. Because hey, why write a class to manage your object state when client code can just check and interpret the DB columns directly? Anyway, the bug wasn't caught for over a year, because no one was monitoring the transaction volume on PayPal branded credit. To the best of my knowledge, they still aren't today, despite that fact that they made an 800 million dollar bet on this line of business when they bought bill me later. So every single paypal branded credit card and virtual credit line became inactive in the system; essentially hitting the reset button on something PayPal had been working for two years to build.

Today, the senior manager who oversaw it is in charge of merchant reporting (which probably explains a lot if you look at recent trouble reports for the live site). The front line manager responsible for the india team is now in charge of the project to build PayPal's next payment engine. Good luck with that guys.

Re:It already is an option for me. (0)

Anonymous Coward | more than 3 years ago | (#36418016)

Or, you can keep no money in your paypal account and they'll withdraw from your checking account. I get 1.5% cash back on every purchase, due to some cross-promotion they did years ago with EBay. The poster above mentioning the multiple problems with this card is obviously talking about the PayPal credit cards, not the debit cards, as the debit card has worked flawlessly for me since I've gotten it (aside from the occasional misfiring fraud alert, which happens on any of my cards when I buy something unusual from someplace unusual).

Dead on launch (0)

Anonymous Coward | more than 3 years ago | (#36417394)

Paypal's problem is its dispute process. This trumps all.

Actually, at the store I work, we already use this (0)

Anonymous Coward | more than 3 years ago | (#36417432)

There's an app called square, downloadable to any smartphone, ipod (with internet), or ipad... We run people's cards through this device that plugs into the headphone jack, it deposits the money into a paypal account, customer is emailed or texted the receipt.

Like a Debit Card (1)

glorybe (946151) | more than 3 years ago | (#36417568)

Many people now carry debit cards and use them almost exclusively instead of cash . My bank has strong guarantees against thefts from my card and they will pay any bill not payable with a debit card by bank check and they even pay for the stamp. It works great, saves time and money and is a superior way to get things done it is all a free service. The single fault found so far is that an accidental double click can pay a bill twice and it tends to not be reversible. It saves me at least an hour a month and a trip to the post office as well as a lot of postage fees. If PayPal can match that one would be a fool not to use it. For long distance buying go from your debit card though PayPal and you have the bank as well as PayPal backing you up if you are shafted by a seller.

"There is no such thing as a free lunch." (0)

Anonymous Coward | more than 3 years ago | (#36418810)

"Free comes with a dick up your ass."

disposable card numbers (1)

metalmaster (1005171) | more than 3 years ago | (#36417614)

that is all....

I have never been overly paranoid about purchasing things online, but I made my first online purchase with a bank-drawn giftcard. I've done the same thing since. I think some banks even offer disposable card numbers for primary accounts.

I visit my bank to purchase a gift card and they will register it to my name and address. I set a pin I have never used for another account, and im good to go.

Paypal is already an in-store option for many (0)

Anonymous Coward | more than 3 years ago | (#36417670)

I know when I was looking for an option for accepting payments I looked into paypal. But their transaction fees are 2%.

I have my laptop connected to a MiFi connection with a printer for receipts.

I found an online service that sent me a swiper. The service was $100 for setup and the fees are fairly low.

Of course, with my laptop there I could always accept paypal if I want to.

Re:Paypal is already an in-store option for many (0)

Anonymous Coward | more than 3 years ago | (#36417798)

Would you name the online service you use? I'll be needing one soon. Tnx.

Who Regulates Paypal? (1)

Liambp (1565081) | more than 3 years ago | (#36417734)

If you add up all the money that goes through Paypal on a daily basis they must rank as one of the world's biggest financial institutions? I wonder if they are subject to any financial regulation?

Could PayPal Be an In-Store Option? (1)

the eric conspiracy (20178) | more than 3 years ago | (#36417788)

No. I don't trust these guys and I only use them when there is a good reason.

I made the mistake once of signing up for a web service with an annual use fee. Paypal cheerfully processed the renewal request from this site without my permission.

I do use them to make purchases from Ebay and some web sites that I visit infrequently as I like not giving out my credit card info to piss ant vendors. This helped me out once as one of these sites was compromised and there were a lot of complaints of fraudulent credit card charges from this incident.

But I always pay through a credit card when doing so with the theory that if anything goes wrong I can dispute the charges with the credit card company. I have done this a couple of times with non-Paypal stuff and my experience is that the credit card company is very willing to take my side in the dispute.

The slow, but thundering march of unification (1)

Twinbee (767046) | more than 3 years ago | (#36417826)

As much as many people dislike Paypal (myself included to a degree), this brings us closer to a more unified monetary system, where anyone can pay anyone else, anywhere at any time.

It's one step closer to the (eventually inevitable) single world currency which will again bump up the efficiency of general cash exchange by another order of magnitude. I live in the UK, but can at least the first-world countries all just use dollars and be done with? (and let's metricize the US at the same time).

Not Likely (1)

guttentag (313541) | more than 3 years ago | (#36417834)

They're facing a catch-22 critical mass problem. There have to be enough places that accept this for consumers to get on board, but retailers aren't going to spend money on new hardware and software to accept a fringe payment system that hardly any consumers use. Remember all the excitement about RFID in credit cards a few years ago? I've got two cards with them, and the only places I get to use this feature are CVS, Chevron and McDonalds, and most of the time the cashier tells me the system isn't working so I have to slide my card anyway. The major credit card companies were pushing this, yet the few retailers that bought into it can't be bothered to maintain the hardware. They already spend a lot of time, effort and money just keeping up with the requirements of the payment card industry (PCI) [pcisecuritystandards.org] , which is essentially MasterCard, Visa, AMEX, Discover and JCB. PCI has extraordinary power to dictate what retailers must do and sets deadlines for them to do it, but even they couldn't effectively push the move to RFID. Unless PayPal is offering an attractive, secure system that costs far less than the PCI alternatives, retailers will tell them they should be content with having PayPal-branded credit cards from Visa or MasterCard.

Then there are the little problems of PayPal living in regulatory limbo because it's not a bank, and the fact that many people distrust PayPal because of its attitude that it can do practically whatever it wants without accountability because it's not a bank. But the catch-22 problem makes these seem like minor issues.

I'd say this article is just wishful thinking on PayPal's part. "PayPal CEO Says he Wants to Supplant Trillion Dollar Credit Card Industry, and He'd Like A Diamond-Encrusted Flying Pony. Film at 11!"

Fuck Paypal. (1)

Ludedude (948645) | more than 3 years ago | (#36418094)

I'd rather give my money to AIG, Wamu, hell even Bank of America before I give those crooks another dime of my money. Carry on.

paypal isn't our pal, they cheat and steal from us (0)

Anonymous Coward | more than 3 years ago | (#36418262)

what else do you call excessive fees, regressive policies, and abusive customer service? like most corporations, paypal is evil, immoral and unethical

these evil selfish, greedy tyrants have far more than they deserve, leading to many having far less than they deserve

the system is completely corrupt and ordinary people are paying the price

What would be the point? (1, Interesting)

John Pfeiffer (454131) | more than 3 years ago | (#36418942)

The PayPal debit card already fills this role. I mostly use mine for sites that don't take PayPal, but my younger sister uses it as her primary means of paying for stuff in the real world. On countless occasions she's actually called on her cellphone and been like "Hey, I'm at X, do you need anything?" because it's easy for her to swing by on her way home, and I'll be like "Sure!" and put the money in her account.

I remember the first time I did that, she called while she was in line at McDonald's because she had forgotten something, and I asked her where she was, and was like "Man, I haven't had anything to eat yet today..." and it just popped into my head. *Ding!* Barely five minutes later I had food-like substance in the shape of a hamburger, and a serving of fries.

Of course, it also means she's always nagging me to lend her money by putting it in her PayPal...

No... (1)

lscotte (450259) | more than 3 years ago | (#36418968)

Please... just No... Bad idea all around.

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