PayPal to move into the shop - without cards or NFC PayPal is consigning the shop till to the dustbin in a way that could completely wipe Visa and MasterCard out of the shopping equation. The website is gearing up to allow punters to pay for products in-store by scanning barcodes with a mobile, and allow payments to be authorised with a phone number - among other new features …
Although I am naturally wary (Paypal seeming to be one of the most hackable transaction systems out there) it's about time they did this. If it's done right, and there's enough takeup (especially the scan&pay bit) this could seriously improve (i.e. speed up, the worst part of any shopping is the time it takes!) shopping.
I'll reserve judgement until I see it in action, but I'm cautiously optimistic.
One of the biggest drawbacks of PayPal over using credit cards directly is the lack of legal protection afforded to UK shopping through Section 75 (of the Consumer Credit Act 1974) <http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases>. I avoid using PayPal for transactions over £100. Admittedly most of my transactions are much smaller than that though.
Scan the barcode, pay for it via an app, and trigger the security alarms as you leave because a checkout operator hasn't cancelled the security tag? I can see that working. Not.
PayPal thinks it can do this cheaply because it doesn't have the overheads of a bank, but those overheads are there for security and protection. As usual, when the new boy thinks it can solve a problem better than the folks who've been doing it for 50-odd years, it generally means that they don't really understand the fine details of the problem. Wait until the first time someone gets conned, and discovers that theyt have no legal protection, because Paypal isn't a bank.
They are registered as an electronic money issuer, not a bank, that means they are required to employ "fit and proper persons", and maintain adequate capital, but you don't have any comeback if they go bust other than that they "should" have enough money in "low risk" investments to pay back everyone. It didn't work for Crown Currency Exchange though.
Newsflash - the security alarms will go off anyway for certain purchases.
I bought a portable harddrive in a Tesco store just the other day and despite paying for it and having it removed from a massive protective plastic box (with a debit card with additional protection, actually) the alarm went off.
I (despite knowing I wasn't legally obligated to comply) showed the security guy my receipt and the item in question (he tested it). He said that the company who make the drive install the security tag INSIDE the box (I don't know if it's inside the actual drive, that would be interesting) and that there's nothing they can do about it.
So everytime you buy a hard drive from a store with those security gates, you're going to set off the alarm.
Next time I may exercise my freedom to ignore it, knowing I haven't done anything wrong and don't have to either submit to an unlawful search or unlawful detention. Alternatively, I may take the packaging with me and walk in and out of the shop for the lulz.
Poor bastards.
Most should know that there are security tags inside, where chiclets (little plastic strips with an adhesive back), protected stickers or other plastic doo-has and open the package and remove them. Or deactivate the tag.
Also they *might* not be able to search you (it can be a very grey area), but they can pass your details onto the police as someone suspected of shoplifting, along with any other shop (many round here are part of an anti theft scheme) so enjoy being closely followed by staff and security guards wherever you go not to mention being potentially banned from every outlet in the chain (unlikely but have worked in places where lists were kept of those under a company wide ban for various reasons....being an arse / abusive was one of them)
Then again certain cities (dundee for one) have a culture of running when an alarm goes off, even if you have paid.....says something about the honesty of your average dundonian......
Presumably each item will carry a unique, peel-unfriendly QR code (or similar) sticker so you can't do some cheeky "grab, scan, walk out, toss phone to mate, mate walks in, grabs, walks out" move to get yourself some freebies.
Presumably door lurkers will carry a mobile device to rescan your unique sticker as you leave to confirm /someone/ has paid for it (a quick shufty at your mobile device would show that you coughed up the necessary, should they actually give a shit about that).
"(a quick shufty at your mobile device would show that you coughed up the necessary, should they actually give a shit about that)."
You were obviously not of the generation that faked 'cleared memory' screens on to their graphical calculators before taking them into an exam, chock full of handy hints and tips...
Option 3 still seems either too insecure or too pointless, I mean if you can walk in, scan a shirt "pay" for it and walk out then it's open to abuse.
If on the other hand you have to walk in, scan, "pay", go to a security guard to ensure you've paid, well, you might as well have gone to the checkout?
Also, if option 3 did take off and they implemented the checking of every item in every shoppers bag then the queues would be horrendous?
Just saying, it sounds like a great idea if we lived in some paradise where everyne was honest and could be trusted.
This post has been deleted by its author
However, as the use of self-operated checkouts at Safeway and other supermarkets is contemporary, the present tense is correct.
Your user name is most apt - you are indeed *our* retarded. Though to be a bit of a grammar pedant, in English you would actually say "your retard" or "your retarded person". Hope that helps.
First time poster, long time reader.
What this is good for, is small businesses like me. I've longed for an app or similar in the UK where I can take card payments while out and about or have my Cash On Delivery option also be a Card/Cash On Delivery.
As for the security behind it, it is open to fraud but as a business you pay paypal a fairly large cut that if there is any problems they cover the costs of it and generally sort it. The old banking model doesn't work for a lot of new innovation, saying "the new boy thinks he can solve it blah blah blah" still has small businesses looking else where and willing to take a chance to make their business work. Hopefully banks will go the way of the music industry, get caught sleeping about new innovation, miss the train and go out of business.
I've heard about dongles that plug into iphones/android phones that allow you to swipe credit cards and authorise payments over their phone/data link. Don't have any experience with them but they might be worth a look?
http://voipsurf.com/2011/01/convert-mobile-phone-credit-card-terminal/
Holy crap titles are optional now!
@auburnman, these systems are not permitted in Europe (and other regions). Magstripe is too easily forged, and merchants must use Chip+PIN for card-present transactions. Submitting lots of swiped transactions will get you your merchant account suspended.
For mobile card payments, you can use a CNP (Card Not Present) interface hosted on a mobile app. One example I know (haven't used this, but have been a satisfied customer of theirs for a regular online card acceptance system): http://www.worldnettps.com/feature-tour/iphone-virtual-terminal It even takes debit cards.
PayPal are not a good choice for a small business. They're far too quick to refund purchases, even when the buyers are obviously acting in bad faith or actively trying to defraud the merchant. They're not even cheap once you're beyond the "kitchen table" stage of your business - you can get set up with an properly certified online processor for less than £40/month, with a big bundle of transactions thrown in for free.
Still, even PayPal is better than Google Checkout..
"As for the security behind it, it is open to fraud but as a business you pay paypal a fairly large cut that if there is any problems they cover the costs of it and generally sort it."
Hahahahahahaha.....hahahaha
As a small business to business company we rarely deal with credit/debit cards so not worth having a merchant account.
We used to use Paypal to process these odd transactions, at least once a month there was stolen card, paypal inform you everything is fine only for weeks later to reverse the transaction and you get nothing. Their in depth investigation consists of replying one nano-second after you send them the details saying sorry nothing they can do.
When google checkout came on the scence we swapped and in the last 4 years we have had 0 chargebacks, so paypal would be the last company on the planet I would entrust.
PayPal is a business. The purpose of their existence is to make money.
PayPal has always charged fees. They must continue to charge fees in order for their business to be viable. Their fees resemble closely the kinds of fees that merchant banks charge to retailers, except they are generally higher.
There are two options for charging a fee to process a transaction. One is to charge a flat or one-off fee. The other is to charge a percentage of the transaction value.
How do you think PayPal would make any money if they didn't charge fees?
Yes and no. You are effectively covered because you can in fact dispute the charge with your credit card company.
You aren't covered because Paypal will then freeze your account, all the money in it and send you a bill for the amount you disputed + fees. I've personally had to take them to court over this when they refused to refund a fraudulent transaction, I had my bank pull it and they froze my account and sent me a bill. Small claims court here in the Netherlands found them in the wrong and gave them a 100 euro fine for every day my account was frozen, starting 14 days after the judgement was passed.
Difficult to cast comment with out technical info but a few questions spring to mind
Option 1) seems to forget that Chip and PIN ever happened. Whatever it's potential vulnerabilities it has reduced Point of Sale fraud significantly http://www.theregister.co.uk/2010/03/10/uk_plastic_fraud/
It also assumes banks will be happy to handle transactions received from retailers that use a phone number instead of a card number. This would not be a trivial change. There are quite a few ISO standards that dictate how this stuff should work. Alternatively retailers would have to implement enhanced terminals or software to dial a unique PayPal authorisation system. Neither of these sound cheap.
Option 2) fits the existing infrastructure better but then why not use your credit or debit card ? In addition as previous posters have pointed out there's the question of legal protection.
Option 3) employing door lurkers to check the receipt on your phone doesn't sound like a cost saving and would seem to just move the queue from the checkout to the door. Plus the difficulties in verifying the receipt seem complex.
Interested to hear more, but doesn't sound like a sea change in payments processing to me.
The queue at the door might not be enforceable.
You have to queue at the checkout because you have goods you haven't paid for.
At the store exit however, you have paid for your goods and the store has no legal right to detain you. Wanting to you queue so as to check your receipt isn't enforceable. As long as you have paid for your goods you can bypass any queue and walk out the store.
Not sure whether there's been any ruling to clarify this ... however, when Google Checkout came out I signed up for it as they were offering a 10% discount at various merchants for the first few weeks to drum up business. I remember giving the T&Cs a cursory scan and one thing jumped out at me was that they said you were buying "virtual money" from Google which was then transferred to the account of the store you were "buying" from and then they'd be able to convert this back into real money. So I saw that in case of a dispute you could have a situation where the CC company would say "well, the "virtual google money" you bought seems to have worked ok so no come back on us"
Need a few things fixed first of all.
1) Network coverage into the deepest bowels of the store.
2) Unlimited data contracts (no female could ever manage a single shopping trip on only 500MB!)
3) Improved battery technology so you can use your smart phone to do smart things in the low signal areas without it gasping for a top up after an hour.
Oh, and some protection from Paypal and their rather wild-west banking techniques, although judging from events of the last couple of years, even official banks don't behave any better!
Apart from that, flawless. Patent it.
Paypal. No thanks! I will not deal with Paypal under any circumstances, hence if an Ebay item appeals to me, unless I can phone/web contact and pay with my credit card, it's no go. I'm sure this is probably a minority approach, but I never have trouble dealing with Amazon or other retailers this way and it's under my control. ( I know I'm a control freak!)
Lot of hostility towards PayPal in here today. I've passed about 1,000 transactions through them in the last 2 years and not had one problem with any of it. Granted I never leave more than £20 quid with them and only let them have access to a very limited bank account but touch wood I've never had any problems. Judging by the negativity around here I must have been extremely lucky!
PayPal are fine as long as you remember that they are *not* a Bank. That may not seem like such a big thing, but there are lots and lots of laws that specifically protect consumers in case "bad things" happen to/at a Bank.
PayPal is all good and dandy *until* something goes wrong. This is somewhat compounded by the "bad people" knowing this and hence targetting PayPal, so you are more likely to have something go wrong.
It also seems that business users of PayPal have a worse experience than comsumer users. This is probably because the consumer gets both their Plasma TV *and* the money back in their account, whilst the business gets neither.
And yes, you have been lucky, which is a good thing for you. But do not forget that the essential difference between PayPal and a real bank is that a bank has the legal obligation to ensure your access to your money.
Thus, a bank cannot freeze your account without a court order.
PayPal, on the other hand, freezes accounts willy-nilly, and from all that I've read it never seems to be the accounts of the crooks, only the accounts of honest people who got had and complained.
If you choose to continue trusting PayPal with your money that is your right and PayPal's privilege, but do not go around talking about PayPal haters and making light of their troubles. The hostility towards PayPal is justified.
And I hope, for your sake, that you won't have to find out the hard way.
I assume that paypal will change there T&C to reflect their new pay and pickup policy as at current if a customer pays for good with paypal and then collects the goods in person from the merchant the merchant is not covered if the customer then reports to paypal 'i didn't receive the item' as paypal emails the merchant and asks them to provide proof of delivery from a recognised delivery company (royalmail, DHL etc), and when the merchant tells paypal 'I don't have proof of delivery as the customer collected in person' paypal simply says 'sorry thats not covered under our seller protection policy' and refunds the customer their payment.
I have used googlecheckout for my business and there seller protection is much better than paypals, on the one occasion i did get a chargeback it was resolved in my favor within a few days of me providing the requested documents. Unlike the weeks its taken to get my money back from paypal when they froze it because i have had customers report to paypal the the item they received was 'significantly not as described' because they hadn't read the items description correctly before purchasing.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
