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The Almighty Buck News

Could PayPal Be an In-Store Option? 205

Posted by samzenpus from the expanding-markets dept.
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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Could PayPal Be an In-Store Option? More

Could PayPal Be an In-Store Option?

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  • 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: (Score:2)

      by thsths ( 31372 )

      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 :-)

      • 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. (Score:5, Insightful)

        by bmo ( 77928 ) on Sunday June 12, 2011 @10:22AM (#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 (Score:4, Insightful)

          by Colin Smith ( 2679 ) on Sunday June 12, 2011 @12:17PM (#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: (Score:2, Insightful)

            by Jibekn ( 1975348 )
            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 (Score:4, Interesting)

              by tepples ( 727027 ) <.tepples. .at. .gmail.com.> on Sunday June 12, 2011 @12:46PM (#36418666) Homepage Journal

              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: (Score:2, Insightful)

                by mestar ( 121800 )

                Let me translate this FA for you:

                "daria42 writes" - obviously a fake name since there are no women on slashdot.

                uses ";" - he is a professional writer.

                "PayPal has long been one of the most-used payments option" - Paypal is paying for this piece of PR.

                " according to PayPal's global president Scott Thompson" - appeal to authority, another mark of PR writers.

                "PayPal's working on that right now" - PayPal is scared of emerging free alternatives, so they are increasing their PR spending.

              • Re: (Score:2)

                by AmiMoJo ( 196126 )

                Not quite. They are based in Switzerland, which is not part of the EU. Obviously their operations in each country are subject to local laws, but in the UK they are considered a financial institution and not a bank. The Financial Services Authority and Ombudsman have jurisdiction over them, but for example they are not required to follow rules on direct debit payments for PayPal transactions involving a bank account. You can of course simply ask your bank to reverse the direct debit to PayPal and legally the

          • Re: (Score:2)

            by Fjandr ( 66656 )

            PayPal is almost entirely dependent on those same banks, so talking about how evil they are doesn't add anything to the conversation. Except, perhaps, to say that PayPal requires a greater evil to exist as a lesser evil.

        • Re: (Score:2, Interesting)

          by npsimons ( 32752 ) *

          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 pl

        • From what I've heard is that everyone hates them

          Everyone on slashdot seems to hate paypal, but I've never known anyone personally have any problems with them. I get the impression that they are fine for low value personal type transactions, it's when people start using paypal as an alternative to a business bank/credit account that problems occur.

      • Comment removed based on user account deletion
    • 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

    • Re: (Score:2)

      by grqb ( 410789 )

      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: (Score:2)

      by Nick Ives ( 317 )

      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!

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

    • How about a debit card from Paypal, one that you can fill at will and for each payment that is made with that card you get an email/SMS/Tweet a second later?
      Something no 'real' bank seems to be able to do.
      I'd use one for such a feature alone.

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

    • Re: (Score:2)

      by SkyDude ( 919251 )

      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

      • This is not second hand knowledge. I now use USBSwiper and have used it at a trade show on my laptop with a Verizon wireless connection. It worked perfectly. From an administrative perspective, I've never had a merchant credit card account that was so easy to use. From an economic perspective, PayPal charges a flat rate for all transactions - 2.9% of the sale plus .30 per transaction. There is a $30 monthly fee which can be turned off anytime if the merchant is closed for the season, on vacation, or any reason.

        That's an entire 1% higher than my card processing, and my card processing doesn't have a monthly fee (it does have a minimum commission - which means if I don't run up $30 - $40 locally, but probably about $30 USD - worth of transaction fees, they charge the minimum anyway). PayPal definitely loses on the economy point there. I'm also protected from stolen cards because the processor uses 3DS authentication, meaning that the card issuer eats it if a transaction is charged back due to someone claiming it'

    • 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.

      • They easily run about £50,000 worth of sales before lunch without breaking a sweat, I really don't think they need to indulge in fraud.

        I suppose a rogue sysadmin might install something. The kiosks themselves are pretty locked down but they are Windows, so I don't really trust the integrity of that. Any time

        So no, I wouldn't use it myself - I order at home using my debit card and pick up in the store.

  • But remember (Score:4, Interesting)

    by stinerman ( 812158 ) on Sunday June 12, 2011 @09:02AM (#36417116)

    They're not a bank!

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

    • 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: (Score:2)

        by Ecuador ( 740021 )

        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

        • Re: (Score:2)

          by hitmark ( 640295 )

          "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.

        • "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.
           

        • There are actually valid answers to all your questions. For a start, PayPal actually doesn't hold deposits - they deposit into their own numerous bank accounts held with real banks - if you read their annual statements (assuming they produce any) then you'd see which banks those are even. This also means PayPal collects money on those deposits, and you don't. It's also how PayPal claims to be FDIC covered - because the accounts with the other banks where the money really is are covered. Also, the credit

      • Re: (Score:2)

        by poity ( 465672 )

        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 (Score:4, Informative)

          by xelah ( 176252 ) on Sunday June 12, 2011 @10:19AM (#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.

        • "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: (Score:2)

      by thsths ( 31372 )

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

      • That division of PayPal only serves Europe. USA is served by PayPal, Inc (not a bank), the Pacific region is served by PayPal Pte Ltd in Singapore, which also has a giant disclaimer on the website "does not require the approval of the Monetary Authority of Singapore" (not a bank). Basically, everyone but Europe is screwed.

    • They're not a bank!

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

      1. There are lots of non-bank players in the payment card industry.

      2. Lots of closed loop systems exist that don't involve Visa, MasterCard, Discover, American Express, etc, and a sponsor bank.

      3. There are a thousand different ways this could go, and 'become a bank' is not in all of them.

  • Looking for trouble (Score:4, Insightful)

    by schwit1 ( 797399 ) on Sunday June 12, 2011 @09:08AM (#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?

    • 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

      • Re: (Score:2, Interesting)

        by MyFirstNameIsPaul ( 1552283 )
        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.

      • You're too dumb to enter the real account and 'forget' about it and if the shit hits the fan it's somehow PayPal's fault?

        "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,"

        I hate to tell you, but y

    • 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 trans

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

      Same thing as when the guy at the gas station/pizza parlor copies your CC number on a piece of paper and orders woldwide crap for his granny. No hacking needed, just reading.

    • You are aware that ANYONE with your checking account number has the same access though the US's ACH system? Hmm?

  • "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 (Score:5, Insightful)

      by spooje ( 582773 ) <spooje@hot m a il.com> on Sunday June 12, 2011 @09:18AM (#36417174) Homepage
      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.

      • 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: (Score:3)

        by pongo000 ( 97357 )

        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: (Score:2)

          by hitmark ( 640295 )

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

          huh?

          • His account balance is -$400 because of PayPal's dickheaded way of handling disputes, so he'd need to receive more than $400 of normal payments top be back in the black; that $400 is tied down until the case is resolved, assuming that PayPal even lets him keep it in the end anyway.

        • 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

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

  • 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.

    • 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.

    • Comment removed based on user account deletion

    • "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 frau

    • 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.

      • 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).

  • 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.

  • It'll never be an option (Score:4, Informative)

    by Pop69 ( 700500 ) <billy@bCURIEenarty.co.uk minus physicist> on Sunday June 12, 2011 @09:39AM (#36417286) Homepage
    Because they're a bunch of scummy thieves.

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

    • Re: (Score:2)

      by Graff ( 532189 )

      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.

  • on bank to rule them all.

    Scary stuff.

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

  • 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.

  • 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

  • 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).

    • You might not realize that a major reason why Greece Ireland, Portugal, Spain and Italy are having trouble getting their economy on track is because they no longer have their own currency and have committed to the Euro which is mostly controlled by Germany.

  • 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 s

    • PCI only covers security. It couldn't be used to mandate RFID unless there was a security reason for it. And for the most part, RFID is more of an insecurity-introducing feature.

    • The problem is that NFC (the RFID idea) and PCI are in conflict - PCI asks for more security, while NFC rips a large hole in it.

      The whole RFID card idea is based on the concept that you can only read the card from nearby. Any beginner with radio technology knows that transmission depends on the amount of power you use, the quality of the aerial and the quality of the receiver. Guess what - you can pick up a single NFC enabled card from about 30 meters, and in a crown 10..20 meters is enough to pick them o

  • 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

  • Comment removed based on user account deletion

  • Honestly, the horror stories about PayPal have not really affected me; although I don't doubt that the crazy stuff sometimes happens, I don't get too worked up about it. The fees can be annoying, but that's at least predictable.

    One minor questionable claim went against me (maybe the item really didn't arrive); a few other disputes went amicably
    I once used a debit card through PayPal to buy a ticket to an event that later got canceled; it was too far after the transaction date to use the PayPal dispute proce

  • I'm not sure I trust paypal or ebay for that matter. They are like that shifty brother of your friend who always seems to do things that are just barely legal (but rarely ethical). In these days where you can barely trust major vendors (a la Sony) or banks that seem to get hacked and then admit it eventually, i see a definite advantage in going to the keep my money under my matress (long term savings) or in my pocket (for immediate use).

    • To live is to take risks, to posses money is to risk loosing it's value.

      You should note that fire, flood, and hurricane insurance do not cover loss of currency from the insured event.

      Pick your poison.

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