Tag: PayPal | Page 8

PayPal’s New Fraud Rules Are Key For PFs

PayPal announced Wednesday (May 4) a series of payments policy changes, including late-to-the-game restrictions on gift cards, a longtime favorite cyberthief tool. Given PayPal’s massive marketshare, payment facilitators need to watch closely any policy changes the no-longer-Ebay-unit makes. In short, any fraud-related changes that PayPal makes gives political cover for any PF to mimic the move.

The biggest change is that PayPal is now excluding “items equivalent to cash, including gift cards” from its PayPal Seller Protection program. It made a similar change to its Purchase Protection program by “clarifying the exclusion for items equivalent to cash to now include stored value items such as gift cards and pre-paid cards.” A few other items that will no longer be supported by purchase protection—at least as of June 25, when the new rules are scheduled to kick in—are payments on crowdfunding platforms, “gambling, gaming and/or any other activity with an entry fee and a prize” and “anything purchased from or an amount paid to a government agency.”

Venmo/PayPal Go Overboard On Compliance

If you’re trying to use Venmo to pay someone for sitting your Persian cat or for buying a used Persian rug, don’t actually use the word “Persian” or be prepared to wait longer. And you can thank a compliance program that is perhaps going a few steps too far.

Although opting—understandably—to be vague on specifics, the PayPal-owned Venmo responded to media reports that is has coded its systems to be on the lookout for certain words, including Persian.
“There has been recent discussion around specific keywords associated with payments within Venmo that have caused us to pause the transaction and review. We understand the frustration this may cause,” Venmo said on its blog.

Patent Wrap: MasterCard’s Plan To Turn An ATM Into A POS

In this week’s look at interesting payments patents issued and/or applied for, PayPal and MasterCard inventors are our payments patent people with a trio of invention applications all filed on Feb. 18. MasterCard’s filing envisions using all of those strategically ATMs for a lot more than cash-dispensing. This makes even more sense given that cash-dispensing will become increasingly unnecessary as in-person purchases go digital.

Meanwhile, PayPal wants to aggregate purchases from multiple merchants in one quasi-session. And MasterCard also has an idea for a way to use payment data to identify physically-proximate consumers with similar buying patterns.

Patent Wrap: Why Limit POS Communications To Payments?, Wonders MasterCard

This week’s wrapup of the latest in payments patent applications and patents issued.

MasterCard: Why Limit POS Communications To Payments? In a U.S. Patent application filed by MasterCard on Jan. 14, the card brand envisioned using POS data connections as a more flexible communication system, with messages going “to an entity that is neither a payment account issuer nor the transaction acquirer.”

Payments Patent Potpourri: A Way For Visa To Ride The Payment Rails Faster

This is our weekly plunge into some of the more interesting patents awarded in the payments space.

Visa Needs To Ride The Rails Faster—And These Are Literally Rails. On Tuesday (Dec. 15), Visa was granted a patent that deals with how transactions can be approved quickly enough for the increasingly-popular mobile public transit payments.

Wall Street Loves Comparisons, Which Is Why Square Is Driving It Crazy

As PF extraordinaire Square begins its IPO perp walk (aka roadshow), it is seeing consumer media criticism (such as this piece from USA Today) that its numbers are not as strong as so-called contemporaries. The problem is Square’s business model and execution approach is truly different, so much so that there are hardly any comparably-sized companies that are apples-to-apples comparisons—and certainly none that are already publicly-held.This concern is oft-cited by startups who claim to have no competitors, but with Square, the differences are much more significant.

Rick Oglesby, a senior analyst with payments consulting firm Double Diamond Group and a longtime tracker of Square, said he was concerned about the influence exerted by comparisons like the ones USA Today made.”This article keeps talking about tech companies and, if that’s the benchmark, then it probably isn’t that pretty. But if the benchmark is payments companies, Square is very pretty,” Oglesby said. “This is not a Facebook or a Twitter, but relative to the competitors listed in the article—which aren’t really even competitors—I’ll take Square.”

Apple Wants Into P2P Payments, Talking With Chase, CapOne, Wells Fargo, U.S. Bancorp

In an attempt to control as much consumer payments as possible, Apple is in negotiations with J.P. Morgan Chase, Capital One, Wells Fargo and U.S. Bancorp to launch a bank-account-based P2P payments service, according to a Wednesday report in The Wall Street Journal. If successful, it’s value would be huge to Apple, but not on a per-transaction fee basis. The goldmine would be the data, the equivalent of knowing every check, money transfer and payment card transaction made by millions of its customers.

Beyond the privacy implications of a consumer goods company having so much consumer personal data—on top of whatever health data is being gathered through Apple’s Health app—there are also security concerns. The more avenues of access that exist into a bank account, the more chances there are for a glitch to withdraw more than expected or for the ultra-sensitive bank account routing numbers to leak where a cyberthief could see it.

Amazon Shuts Down Local Register, Having Never Really Loved It Anyway

For the world’s largest e-commerce company, Amazon certainly had a busy payments week this week, from opening a physical bookstore integrating online capabilities to pushing its Amazon button for third-party mobile apps. But it’s most PF noteworthy move this week was Amazon’s choice to give up on Local Register.

Local Register was a payments processing effort that focused on the exact kind of smaller merchant that has gravitated to Square. And Amazon’s initial promotional pricing was set lower than Square, on the rationale that price is everything for a small merchant. Apparently not.

Why Did Most Merchants Miss The EMV Deadline? Many Reasons, But Complexity Is The Top

With the liability shift and October already here, where are all the EMV-compliant merchants? Many are still waiting for software updates. And why is that, given how many years everyone has known about the October 2015 cutover? Seems that the U.S. payments processing space is a lot more complicated than even the payment itself realized, according to Randy Vanderhoof, who, as executive director of the Smart Card Alliance, is the industry’s chief EMV cheerleader.

Vanderhoof concedes that most U.S. merchants—60-65 percent, he said—are not EMV compliant today and he blames that on several factors, but payments complexity—and good old-fashioned procrastination—are at the top of his list. “The U.S. market is the most complex payments processing market in the world because we have multiple parties involved in managing the retail POS systems and multiple parties engaged in the processing and acquiring of payment transactions,” Vanderhoof said. “In other countries, other markets, the major banks who were then issuers were also the acquirers so they owned the terminals in those merchant locations. They invested in the cards and the terminals and their own banking acquiring network. In the U.S., financial institutions are separated from the merchants and acquirers. This means that there needs to be independent investments and alignments.”