MasterCard Forcing PayPal To Pay Higher Fees 260
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."
Card to Card payments (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.
Pass the buck (Score:5, Insightful)
Guess end users will be seeing a fee increase coming our way. Awesome.
You have to pay to play! (Score:5, 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!
Re:Card to Card payments (Score:3, Insightful)
Well, it's in your fairytale dreamland, that's certain.
No idea who to root for in this... (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.
Credit cards have ruined the value of money. (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.
Re:Crap ... (Score:3, Insightful)
Just pay cash for stuff.
Re:Pass the buck (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.
Re:People STILL use CCs with PP? (Score:5, Insightful)
Your solution to your credit card number being vulnerable to theft is to give away your bank account number instead? Brilliant!
Re:This woudl be ok, but... (Score:5, 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.
Re:can they get away with this? (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.
Re:Card to Card payments (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.
Re:Card to Card payments (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.
Re: Card to Card payments (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.
Re:No idea who to root for in this... (Score:5, 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.
Re:SLightly confusing summary (Score:4, 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.
Re: Card to Card payments (Score:4, 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!