

PayPal Trumps Square’s Deal With Starbucks by Partnering With Discover - zachh
http://allthingsd.com/20120822/paypal-trumps-squares-deal-with-starbucks-by-partnering-with-discover/

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X-Istence
Sorry, but I as one of those 50 million Paypal users will continue to refuse
to do business using Paypal unless absolutely necessary for ease of use (sadly
there still is no easier way to have people pay me for services besides PayPal
from various other countries in the world).

I don't trust them with my money, and I certainly don't trust them to handle
it correctly.

~~~
freehunter
Yeah, I only use PayPal for overseas transactions as well. I don't trust
PayPal, but I trust overseas businesses less and sometimes its the only way to
make a transaction.

~~~
rm999
I'm the same way. What sucks is overseas is riskier, and I got frauded three
times in two years. So Paypal permanently banned me from their service.

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sp332
But PayPal still refuses to be regulated like a bank, right? And how long will
it be before "PayPal is holding my funds" stories go mainstream?

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dedward
It's not like banks get a choice - more like lawmakers have yet to force
paypal into regulation.

~~~
betterth
"It's not like banks get a choice"

Right you might want to go watch Jamie Dimon's testimony to the Senate Banking
Committee two months ago.

It's fair to say that the senators in control of that Committee absolutely
ingratiated themselves to the JP Morgan Chase CEO, falling over each other
with offers of "improving regulation" and questions of "how can we make things
better for your company".

I think it's absolutely fair to say that in this business-is-a-god-capable-of-
no-wrong idea some subscribe to in Washington absolutely leads to banks
effectively having an enormous amount of choice and control in the regulation
process.

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s_henry_paulson
As with many new technology advances in the finance sector, I predict this to
be use for crime.

Right now it's easy for criminals to get money into paypal accounts, but
difficult to get money in their hands, because it often requires steps that
involve tying a transaction to a bank account or something traceable.

If someone can just walk into a store and type a couple of numbers into a
keypad and walk out with items worth cash, it gives the criminals an easy
gateway to spend their ill-gotten funds.

~~~
jrajav
I'm assuming that the number tied to your account would be verified, in which
case that becomes the new traceable tie between you and the account. If it's
not verified, I certainly agree.

~~~
s_henry_paulson
Phone numbers are not traceable. Google voice, etc.

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e1ven
Part of where I get confused here, is that Paypal already has a debit card...
Given the prevalence of places that accept debit cards to buy things, how is
this a revolution?

[https://personal.paypal.com/us/cgi-bin/?cmd=_render-
content&...](https://personal.paypal.com/us/cgi-bin/?cmd=_render-
content&content_ID=marketing_us/debit_card)

~~~
amolsarva
That debit card is an actual CARD, that you go get, and it has a Mastercard
logo on it (not that it matters which so much, but that is one of the payment
networks like Visa, Discover, Amex)

The big thing is you can use your Paypal ACCOUNT! Not get a whole new card.
Seems pretty massive increase in their reach

~~~
e1ven
"Starting in April, Kingsborough said, Discover’s merchants will be able to
begin accepting PayPal’s charge cards."

It goes on to talk about other payment methods, but those seem optional. Most
places that accept discover won't change POS systems to allow that..

So, again, it seems to be a pass-thru plastic card, just like they have now.

I KNOW I'm missing something. I just don't know what.

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nrj
Fry: Do you take Visa?

Clerk: Visa hasn't existed for 500 years.

Fry: American Express?

Clerk: 600 years.

Fry: Discover Card?

Clerk: Sorry, we don't take Discover.

~~~
Zimahl
Customer: Do you accept the Discover Card?

Peter Griffin: Ha! Hey, Lois! Diamond Jim Brady over here just asked if we
accept the Discover Card.

Lois Griffin: Ohhhh! They're in an exclusive club that's called 'anybody'!

Peter Griffin: Yeah! No, no, no! I don't think so. You know, you know, I'd
rather take two live chickens than your fly-by-night credit card. I would
rather take a jar of pennies which value was less than your bill.

~~~
joshu
When I worked at Morgan Stanley, which owned Discover card, our corporate
cards were, of course, Discover cards. They also assigned us Amex cards in
case we were somewhere that didn't take Discover cards. And also Visa cards,
in case we were somewhere that didn't take Amex cards.

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derwiki
Fry: Do you take Visa?

Clerk: Visa hasn't existed for 500 years.

Fry: American Express?

Clerk: 600 years.

Fry: Discover Card?

Clerk: Sorry, we don't take Discover.

~~~
reitzensteinm
Come on, if you're going to post a joke here, at least do a quick check to see
nobody else has posted _the exact same text_.

~~~
derwiki
Crap, that was my bad. I don't see a way to delete my dupe post though -- is
that impossible?

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podperson
I think Starbucks are more common than places that take Discover.

~~~
ConstantineXVI
AFAIK, McDonald's and Walmart take Discover; McDonald's alone has more
locations than Starbucks.

That said, I can't remember the last time I've seen anyone use Discover
anywhere. Starbucks has far better visibility; they still likely have the
marketing advantage.

~~~
ams6110
I use Discover and AMEX almost exclusively for cashback/rewards points.

~~~
redog
I've used Discover for years and can't really think of a place that didn't
take it. I just recently canceled it and have switched to AMEX which I have
already found a half a dozen places that don't take it.

~~~
podperson
IIRC Costco takes Amex (and not Discover) and Sam's Club takes Discover (and
not Amex). It's been a while since I have darkened the door of a Sam's Club,
but at the time I thought that was a pretty big win for Costco...

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joshontheweb
PayPal recently turned off my account because I was unable to verify my
address with a call to a landline ( don't have one ). I have little faith for
their future. This discover partnership is something that should have been
done years ago. It's too late now IMO.

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ConstantineXVI
This makes it sound like PayPal's proxying through Discover; building within
their platform. I don't see any potential way this could backfire when
Discover decides it wants to do it's own mobile payments. None at all.

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bjustin
If the stereotypes about Starbucks customers being hipster technologists* are
true, then Square is still ahead of PayPal here. The crucial difference
between the Square deal and the PayPal deal is that the people who go to
Starbucks are more likely to adopt a new technology than your average Walmart
shopper.

* I imagine this is not accurate, but it is the sense I've gotten from online jokes about Starbucks. Either way an average Starbucks customer is likely better off than an average Walmart shopper, just based on how necessary Starbucks vs. Walmart is in terms of goods sold.

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paulsutter
Starbucks using pay-by-name will be a breakthrough, assuming that's where the
Square partnership is going. Since Starbucks is already asking for your name
when you order coffee, it could turn into a great customer experience that
would build broad momentum for pay-by-name.

Is this PayPal agreement just adding a new and more complicated option to the
existing terminal base? Will retail clerks even know what it is, and will
there be any reason for a consumer to migrate from credit card use?

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CountHackulus
Pay by name would be terrible for me, I have a very French name, and no
Starbucks barista around here speaks enough French which means I have to spend
quite a while spelling out my name for them. I've taken to just telling them
my name is "G".

Now pay by NFC...

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erikpukinskis
Pay by name just requires the barista to be able to pick your name out of a
list, which shouldn't be a problem.

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dr_
this is wrong. Only because it's not that different from most payment
mechanisms already in place. Squares goal, it seems, is to allow vendors to
build a better relationship with their customers, which can hopefully increase
sales. In the longer term, it's a software play and I think Starbucks realizes
this. PayPal is just another method of paying for your stuff and leaving the
store, maybe never to return.

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ankeshk
This news is exciting because it marks the beginning of offline wallet-less
transactions. You can go to a store with nothing and end up buying something
with your phone number and a pin code.

PayPal retains its crown for convenient payments. Making offline payments with
your phone number and a pin code indeed seems like the future.

Its unfortunate however that PayPal is not vendor friendly.

~~~
paulsutter
How is that easier than using a credit card?

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smallegan
Square is a way for businesses to accept credit cards. Paypal is a "bank" that
offers a type of credit card. I fail to see how they are really competitors.
Square takes Discover so the way I see this is Square just got the ability to
accept Paypal?

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camiller
Square is also a way to make payments <https://squareup.com/pay-with-square>

Which I think makes it more of a competitor to Google wallet. However I think
it only works with merchants that use square to accept payments so...

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jasonlingx
PayPal stopped innovating a long time ago. This isn't going to save them.

