

PayPal Acquires card.io - v33ra
https://www.thepaypalblog.com/2012/07/paypal-acquires-card-io/

======
sandfox
Anyone else read the 2nd to last paragraph and giggle a bit:

>to get the opportunity to work on projects that will accelerate innovation at
a scale that’s just not possible at a startup.

Since when have PayPal done anything innovative in the last few years. (I am
genuinely interested in answers to this)

~~~
maratd
They haven't done anything innovative since they were acquired by eBay. Well,
unless you consider freezing accounts and confiscating funds an innovative
activity.

~~~
dangrossman
Since being acquired by eBay they:

* Lowered transaction fees for volume merchants from 2.2% to 1.9%

* Partnered with many of the largest payment gateways to add PayPal to their services

* Introduced PayPal mobile and NFC phone-to-phone payments

* Introduced micropayments

* Introduced two-factor authentication

* Got their European Union banking license and expanded to 100+ countries

* Began offering PayPal Buyer Credit (transactional lines of credit)

* Moved into retail stores, accepting PayPal at credit card terminals in-store

* Began offering a mobile card reader to accept payments into a PayPal account

* Introduced student accounts with parental controls

* Opened their API for development of peer-to-peer payment services

* Introduced virtual, one-time-use credit card numbers

* Began offering merchant gift certificates

* Introduced a "storefront widget" that could be embedded in websites

* Began offering SMS-based authentication

* Began offering a virtual terminal for manually keying in offline/phone orders

* Introduced PayPal Pro and the ability to store payment authorizations you can charge against in the future (i.e. a payment vault with permission controlled by the customer).

~~~
rationalbeats
All those things are great, but I stopped using them when I realized they can
freeze my money, or remove money from a linked checking account for whatever
reason they decide and I have almost no recourse except to hire a very
expensive lawyer or hope I can start a viral campaign about my money being
stolen by Pay Pal.

And since they are not a "bank" they are not regulated by the same laws as
other banks, and credit cards.

Bottom line, they lost my trust, and nothing that you have listed regains that
trust for me.

~~~
dangrossman
That isn't a PayPal thing, it bubbles up from the banks underwriting every
PayPal account (Wells Fargo and Chase). It's standard practice in the
regulated banking industry, not a sign of a lack of regulation.

My real merchant account, at a company many startups probably use to accept
their payments, was flagged as high risk at one point when a string of
chargebacks came in from stolen cards someone used over the course of a month.
All my processing was funneled into a reserve account and those funds,
thousands of dollars, were held for exactly 180 days (6 months), as that's the
window in which chargebacks can still occur from previously processed
payments.

If you hold this opinion against PayPal, then you should hold it against the
entire credit card processing industry. It stems from the root: Visa and
MasterCard's Operating Regulations.

~~~
mfringel
The fact that you knew they were held (and would be held) for exactly 180 days
puts them above PayPal.

~~~
dangrossman
PayPal holds funds from a suspended account for exactly 180 days. It's the
same policy because it comes from the same source.

> We may close, suspend, or limit your access to your Account or the PayPal
> Services, and/or limit access to your funds for up to 180 Days if you
> violate this Agreement, the PayPal Acceptable Use Policy, or any other
> agreement you enter into with PayPal

\-- PayPal User Agreement

~~~
maratd
They can remove funds from your account for any reason and in any quantity.
Not freeze. Remove. Your only recourse is to pursue them in court.

Of course, they put a wonderful provision in that agreement you quoted. You
can only pursue them in court in the state of California and Nebraska. Ask me
how I know.

Is that how a bank would act? I don't think so.

~~~
dangrossman
Is that how a bank would act? Yes, that's exactly how they act. When you get a
chargeback, they remove the funds (and a chargeback fee) directly from your
bank account. That's the only place they _could_ come from, since you don't
hold a balance like you do at PayPal. Settled payments get deposited into the
account, refunds and chargebacks and fees get withdrawn, once a day 5 days a
week.

As for restricting venue, yes, that's also something banks would do. It's a
standard term in most contracts, let alone most merchant service agreements.
Here's the agreement for First Data, one of the world's largest merchant
account providers. It's also the same agreement you sign for Intuit Merchant
Services. You've probably heard of Intuit; QuickBooks, Quicken, TurboTax,
Mint, etc. It restricts venue to Ontario.

[http://www.firstdata.com/downloads/international/fdims-1202....](http://www.firstdata.com/downloads/international/fdims-1202.pdf)

PayPal does not have the ability or authority to steal people's money "for any
reason and in any quantity". That's ridiculous. You're spreading lies while
admitting not to know how it works anywhere else. We don't do that here on HN.

~~~
maratd
> Is that how a bank would act? Yes, that's exactly how they act. When you get
> a chargeback

I wasn't talking about chargebacks.

> PayPal does not have the ability or authority to steal people's money

They have the ability and they couldn't care less about having the authority
to do so. Largely, because the majority of their customers can't pursue them
in court. They also limit any arbitration to 10K. If you read the user
agreement, it's all right there, in black and white.

> You're spreading lies while admitting not to know how it works anywhere
> else.

I sincerely hope you keep a balance with them. So that you can find out from
experience, as I did.

~~~
dangrossman
I do keep a balance with them. I have for the past 12 years.

<http://i.imgur.com/FWgxP.png>

You've obviously had a bad experience with them. That sucks, really. And I
won't tell you not to hold a grudge against them for whatever that was. It
helps no one to use that as an excuse to claim they haven't innovated as a
company in 10 years, that they have unlimited rights to steal, that their
contract isn't essentially identical to other merchant services agreements,
and then to wish ill on me personally for pointing that out.

~~~
maratd
Like I said, you'll find out. I heard the same stories and dismissed them. I
kept a balance with them in the 6 figures because of the relatively high
interest rate I was getting in the money market account (when they had it).
Then they froze my account. No biggie, right? I'll just wait 6 months. Still
getting the high interest rate. Before they unfroze the account, they took a
chunk out of it. Only about 10%, but it was still quite a bit of cash. No
explanations, just email stating the obvious. My recourse? Nothing. They
refuse to speak to you, only by letter. Letter gets a response 6 months after
the fact and it's just a form letter pretty much acknowledging receipt. Like I
said, you'll find out. If you do business with a local bank, at least you can
take them to court if there's a problem. With PayPal? Good luck.

------
BallinBige
It's funny PandoDaily was just talking about the demise of PayPal too.
[http://pandodaily.com/2012/07/14/exactly-how-screwed-is-
payp...](http://pandodaily.com/2012/07/14/exactly-how-screwed-is-paypal-hint-
very/)

PayPal's payment volume grew 24% y/o/y to $34 billion' as well..
[http://seekingalpha.com/article/513741-ebay-poised-for-
paypa...](http://seekingalpha.com/article/513741-ebay-poised-for-paypal-
growth). I hate to admit it, but PayPal is not going anywhere

~~~
kuida0r3
Is there a lower resistance alternative for a general consumer transferring
money to a friend over the web/mobile phone? I default to using PayPal since
the chances of my friend having a Paypal account is higher than the newer
services.

~~~
eridius
I've been experimenting with Dwolla lately. They charge $0.25 per transaction
over $10 (and nothing for under $10). The downside is they skip credit cards
and go straight for your bank account so you a) need to hook up your bank
account to them (which I did for PayPal anyway), and b) unless you have money
hanging out in your Dwolla account, paying someone takes 3 days for the bank
transfer to clear (which, again, is going to happen with PayPal anyway if you
use a bank and don't run a balance, like me).

My only real problem with Dwolla is their iOS app sucks, and their website
isn't a whole lot better. But I've had no problems with their actual service,
although I've only transferred a few hundred dollars so far.

------
zacharyvoase
card.io is pretty cool—I wasn't aware of it until now.

I’m just shocked at how poor the security of the entire consumer finance
system is, if you can accept payment just by taking a photo of someone’s card.
I wouldn’t be surprised if professional credit card fraudsters had implemented
this technology years ago (except with covert cameras).

A sincere question: what would stop you from photocopying someone’s card and
using it to buy goods with this system? At least with Square you need a
magnetic barcode, which might act as a very mild deterrent.

EDIT: FYI, I live in Europe, where we’ve had Chip & PIN-verified PoS
transactions for a while now. Still not the best security, but at least it’s
no longer trivial.

~~~
saurik
AFAIK, cards processed with card.io are processed as if they were "card not
present" transactions, which have a different risk profile (and thereby
different fee structure) than "card present" transactions (that requires some
information that is on the magnetic strip that you can't just read off the
card itself).

------
Matt_Mickiewicz
Smart move... now they just need to buy up SQUARE and iZETTLE.

Anybody know the price paid?

~~~
callmeed
Personally, I'd rather Square and Stripe got married.

~~~
kyro
Throw in Simple to complete that alliterative trifecta.

~~~
gue5t
They're all hexaliteral too.

------
dzohrob
congrats to Mike and the card.io team!

~~~
mmettler
Thanks Dave!

~~~
kategleason
awesome!

------
fcoury
You can judge the complexity of a company when its blog domain is
theCOMPANYblog.com instead of blog.company.com...

~~~
statictype
a) You seem to use the word 'complexity' like it's a good thing. Maybe you
meant 'sophistication'?

b) That sounds like a poor metric for sophistication. I remember someone
mentioning (maybe patio11) that company.com/blog was better from a SEO
perspective than a separate subdomain. Maybe they're showing more
sophistication than you think?

------
drtonyratliff
PayPal needs to buy up the rest.

