PayPal Set To Offer Secure Way To Shop On Non PayPal Sites

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PayPal, the payments service arm of online auction leader eBay Inc, is set to release on Tuesday a convenient way for its customers to make payments on Web sites that don't accept PayPal directly.

The new software utility, called the PayPal Secure Card, recognizes when a user lands on an e-commerce checkout page and automatically helps the user fill out the payment form in a secure way that also offers stepped-up fraud protections.

It answers an innovation by Google Inc, which a year ago introduced Google Checkout, which stores financial details to make shopping more convenient, analysts said.

PayPal Set To Offer Secure Way To Shop On Non PayPal Sites [uk.reuters.com]

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The following message was cut out to new thread by engine. New thread at: ecommerce/3508799.htm [webmasterworld.com]
2:27 pm on Nov. 19, 2007 (utc 0)

[vincevincevince]

I believe that this is going to make fraud checks really hard because what you'll see are card numbers which check out for address details etc. but actually track back to paypal accounts and obtaining multiple paypal accounts with false details is very very easy.

With the payment coming in by card number only, we won't get to see whether the user is even using a verified account.

Later on in the same linked article we see:

PayPal reported 37.5 million active accounts during the latest quarter, and 164 million total accounts worldwide.

That's 126.5 million inactive accounts, many of which will have gone through various fraud checks but will no longer be monitored and probably connect to dead email addresses. That's a major risk for fraud with this new system.

Overall I don't like this in the slightest, if your card number is stolen it's down to your card issuing company to make amends. Cards need to relate to people paying bills.

[Ledfish]

I wonder how this will affect Paypals long standing policy of not allowing adult related transactions through there system.

I guess they could setup some kind of filtering system.

I would also imagine to use this feature they would have to require some sort of verification since they themselves won't have a specific agreement with the merchant.

Probably will just piggyback Mastercard's merchant agreements. After all, Mastercard will make lots of money off it with all the chargeback fees they will be collecting.

[pontifex]

I really like the concept behind paypal and the micropayment rates they offer. Yet the system is not showing any speed or handling improvements since I seriously use it. That is now for over 3.5 years. It is slow and no fun to really use. I think that would be the point for paypal to improve - not some obscure feature...

just 2 pennies!
P!

[amznVibe]

You'd have to be insane to allow any 3rd party software to fill out financial information into javascriptable/ajax forms. With a new cross-site scripting security flaw being found almost weekly in IE (and also firefox) you'd be giving away your info to the thieves that want it most. This is a nightmare waiting to happen.

ps. isn't this essentially just the "paypal virtual credit card" with a new name and possible spyware on your shopping/browsing habits?

[edited by: amznVibe at 6:21 pm (utc) on Nov. 19, 2007]

[m0thman]

Mmmm.. Google Checkout beats paypal hands down IMHO.

[pontifex]

Mmmm.. Google Checkout beats paypal hands down IMHO.

and some other might do that, too - but no one has the micropayment rates... 5 cent plus 5% of transaction value. That is 10 cents on a 1 $ sale with credit card... is there another payment provider with these rates for microsales?

P!

[Propools]

We don’t use PayPal as a payment method on our site. We use a different credit card merchant that excepts all major credit cards. In a normal transaction, on our site, we are charged the agreed merchant fee % of the sale.

Since our merchant isn’t handling the transaction, I wonder if we’ll still get hit with a merchant fee at all? If so, at what rate? The one we contracted for or PayPal’s?

AmznVibe

You'd have to be insane to allow any 3rd party software to fill out financial information into javascriptable/ajax forms. With a new cross-site scripting security flaw being found almost weekly in IE (and also firefox) you'd be giving away your info to the thieves that want it most. This is a nightmare waiting to happen.

How probable and likely is this? If so, what would be a companies liability-exposure if credit card/personal data is fraudulently acquired using this method?

[Aunt_Clara]

Nobody else has used this?

I have paid with the paypal secure card. You need to have a US credit card on record, they send a mail to the same address you receive your statements and you have to enter a code in that letter.

Your actual credit card number is not passed on to the merchant, but your address will still pass AVS, the address tied to this fictitious CC number is the same as your actual card.

As a merchant I have no problem with users paying with this, it's safer than a paypal account.

[Propools]

OK, so I'll stipulate the "Consumer Friendliness" of this service.

Let's look at this from the business cost side for a second.

What will the total additional cost, if any, to the merchant?

How are chargebacks handled?

What liability/exposure to the company for credit card hacks?

If we suspect the order placed is from using a stolen credit card, who do we contact? Our merchant company or PayPal?

This only begins to scrape the surface of the possible additional business costs/liabilities which could be put on ANY business.