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PayPal Brings Mobile Payments To U.S. 130

An anonymous reader writes "PayPal is bringing the eastern use of the cellphone as a payment method to the United States. The company's mobile service aims to use secure text messages as a payment method for direct-marketing initiatives and other 'on-the-spot' mercantile opportunities." From the article: "To the extent that digital money doesn't feel like real money, it may increase spontaneous purchasing ... " This story offers more details on a discussion we had last month.
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PayPal Brings Mobile Payments To U.S.

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  • Oh good! (Score:5, Funny)

    by Anonymous Coward on Sunday April 16, 2006 @08:31PM (#15140105)
    Now I can fall victim to a phishing scam anywhere
  • PayPal sucks (Score:2, Informative)

    by Anonymous Coward
    So, what's wrong with PayPal?
    What do I need to know about PayPal and what about the lawsuit? []

    1. According to PayPal accepting their ToS (Terms of Service) in effect means you waive your rights to credit card consumer protection laws if you want to use their service, and that you may not issue a chargeback for unauthorized use of your credit card and PayPal account, or if you do, then they have the right to limit your account. Is this legal? We don't know. But it's how Paypal operat
    • Re:PayPal sucks (Score:2, Interesting)

      by brain159 ( 113897 )
      Move to Europe. The Paypal ToS are better over here, they are subject to regulation (as an "issuer of electronic money") and are answerable to the UK's Financial Services Authority. They can't lock your entire balance due to a dispute over part of it, and you have the right to appeal over their heads to the regulators if they mess you around.

      Alternatively, pester your elected representatives for some legislation compatible with the relevant EU stuff. Get some proper Data Protection laws while you're at it.
  • Great (Score:2, Interesting)

    by bl00d6789 ( 714958 )
    So, on top of the already outrageous eBay and Paypal fees, there will be text messaging fees. I'll be sure to use this on a regular basis. Paypal is already worse than my bank when it comes to ridiculous fees.
    • Re:Great (Score:4, Informative)

      by iamdrscience ( 541136 ) on Sunday April 16, 2006 @09:01PM (#15140206) Homepage
      That's not really true, Paypal only charges fees on credit card transactions and the fees they charge are reasonably well in line with what other credit card gateways charge merchants when you purchase something from them with a credit card.

      Whether the fees charged by credit card gateways are too much is another matter, and seems like it might be the case. I seem to recall class-action suits being brought against Mastercard by merchants because they felt the fees they charged were unjustified.

      The fact of the matter though, is that although as a consumer you generally don't realize it, merchants always take a hit on credit sales and it's not always small. There are plenty of legitimate complaints about paypal and I don't see this as being one.
      • if you want to accept one credit card payment, you are forced to 'upgrade' your account, then all transactions are charged for, even if the money was already in their paypal account.
      • Just because it's a rant doesnt mean it's a flamebait . And about Paypal Vs CC clearing : Paypal account freezing policies are much worse that any CC clearing company , in Israel cc clearing is around 1.7%, and as low as 0.65% for gas stations and travel agencies , with no per-transaction fee at all , setup fees , monthly fees or gateway fees .
        Since here (in Israel) the credit cards are the same as in any other part of the world (Visa , MC , AMex , Diners) I don't see why should small merchants pay the
        • Not to be a total American ass, but guess what, Paypal is an American company whose largest section of business is in America, therefore it makes sense that they are most concerned about being competitive with American credit card processing rates, not Isreali rates.
          • You misunderstood why I stated the rates . Point is that eventually , the clearing is done through the same system all over the world . It's a sort of a franchise . Therefor ,no reason a person in the US should pay for the same service from the same company more than he does in any other part of the world .
            Specially considering the fact that there are more CC clearing companies in the US than here . Logic says US merchants should enjoy lower rates , don't you think ?
  • Logical (Score:4, Insightful)

    by gerbalblaste ( 882682 ) on Sunday April 16, 2006 @08:39PM (#15140125) Journal
    This is a logicalextension of paypal's increasingly omnipresent marketing and services.
    Paypal has diversified into many diferent branches and while this new mobile payment may be subject to some criticism and a degree of scepticism it is likely that this will come to be as pervasive as credit cards.
    • What if they offered this on other handheld devices?

      Then you could transfer funds without paying cellphone fees.

      For example, you could make payments over the infrared interface of a PDA. You could even "beam" someone money to settle a restuarant bill.

      This would also be possible with 1999 techology.

      In fact it was done, and this is one of the key PayPal features from their launch. It got quietly dropped on the floor a few years later.
      • As a matter of fact, Paypal used to offer a PalmOS program that did exactly what you describe. But they withdrew it — there was no way for them to make money off it.
        • Check out BillMonk, I think it does everything you need, all via sms, email, or the web interface.


          • The difference, though, is that BillMonk today is little more than an electronic IOU service. PayPal handles actual funds.

            I can see the two complementing each other, though. In fact, I think it is BillMonk's goal to partner up with services like PayPal.

            I love BillMonk, by the way.
          • BillMonk is nothing like that. It's a complicated system with umpteen features that only a compulsive geek will ever use. And it doesn't even do actual transfers!

            What we are talking about here (and what most people need) is a system that makes transferring small amounts of money as simple as it is with old-fashioned paper and metal currency. That's what the defunct PayPal program did.

    • With one incredible exception... PayPal does not offer the same protection as your credit card company.
    • This is a logicalextension of paypal's increasingly omnipresent marketing and services.

      Is it? Why? And omnipresent means PayPal is already everywhere... how can that be increasing?

      Paypal has diversified into many diferent branches

      What branches? Online payments and debit/credit cards come to mind. That's two. ... and while this new mobile payment may be subject to some criticism and a degree of scepticism

      Anything new might be subject to criticism and skepticism. You could say that about cops walking the
  • What I want... (Score:2, Interesting) to be able to take a picture with my camera phone of a barcode on an item that I want to purchase. This would bring up comparison shopping info about the item, etc. If I want to buy the item, I'd just push pound or whatever.
    • Re:What I want... (Score:5, Insightful)

      by jrockway ( 229604 ) * <> on Sunday April 16, 2006 @08:48PM (#15140157) Homepage Journal
      If you send a text message to GOOGL with the barcode number, it will return comparison shopping information. Unfortunately, in America everything is cheaper online, so there's no real point in going shopping anyway.
    • If you have access to the barcode on the item, you probably have access to the actual item, which means you are likely in a place where you could just buy the item without using a camera or a computer.
    • ScanZoom [] is probably the most "complete" solution and sounds like what you're looking for. It runs on Palm and Symbian camera phones.

      You can also scan barcodes with Barcode/13 [] and look them up yourself. Hold down a button for a while and Barcode/13 "scans" and copies the barcode to the Palm clipboard. Unfortunately, the pictures that my Treo 600 takes are too saturated for it to work. I've heard that it works really well with the 650's camera, though.
  • by Fantasio ( 800086 ) on Sunday April 16, 2006 @08:46PM (#15140151)
    No parent will buy a cellphone to their kid unless the feature is disabled.
    • >No parent will buy a cellphone to their kid unless the feature is disabled.

      Same as prepaid charge card, paypal damage is limited to the credit backing it. (link it to your bank account, bad, link it to the same charge cards they already carry, no change.)

      as others have said, your recourse may be a bit more questionable through paypal. (but have you read your credit cards policy? most have in home state, and extreme time limits, and a mulit page dispute form that must be mailed within a short period o
    • ...and any self-respecting kid will have it enabled or cracked within a week. If not by themselves, then through "a friend" or the local stolen-mobile-phone-and-Xbox-chip retailer.
  • The perfect model (Score:4, Insightful)

    by nighty5 ( 615965 ) on Sunday April 16, 2006 @08:49PM (#15140162)
    What a sensational business model.

    1) Act and charge like a real bank, but don't say you're one.

    2) Offer no real customer service, treat customers like thieves, offer no financial protection, unlike a real bank don't be forced to implement security and continity controls

    3) Profit!
    • To hear about the sheer number of horror stories the parent talks about, go here: [] I've been ripped off once, but it was a small amount. PP's customer service was in the toilet. All automated, impossible to get to a real person. And no, they do not have FDIC backing or anything. So they are free from the rules that constrain most banks/require them to insure your money. They have a monopoly and thus get away with this. Once that starts eroding, they'll actually give a shit. Jus
    • I see PayPal found the elusive ??? step before profit. Oh my, it's quite a mouthful.
    • I don't know if someone disagrees with the parent post. Indeed, they may have reason to disagree with it, and good reason.

      Moreover, the parent post did not go into much detail. So I can even see where an ignorant modder might think that the post is a troll.

      However, there have been *tons* of people cheated by Paypal in combination with real thieves. I am one of them. That is, Paypal showed that they have no incentive to either use the insurance that they advertised they had; and they showed that they had
      • A touch of comedy with an added smell of satire is the medicine.

        Short and sharp was my motto, and it will probably be my undoing.

        Appreciate the added commentary surrounding my post. For right or for wrong, I can see around 50% believe it's troll and the other 50% believe its informative.

        Good day!

  • The Original Concept (Score:2, Informative)

    by Anonymous Coward
    This interests me primarily because PayPal was originally designed as a mobile payment service for PDA users. Mobile phones now incorporate a substantial amount of functionality that was once restricted to the PDA.

    Maybe their original idea was simply ahead of its time.
  • by pHatidic ( 163975 ) on Sunday April 16, 2006 @08:53PM (#15140179)
    TextPayMe already provides this exact same service. I wonder if they have a patent on it.
  • Secure & text message don't really belong together.

    SIM cards & phones can be cloned. IIRC, the text messaging network is susceptible to a DOS. Your cellphone isn't a credit card... you can't exactly charge back someone else's impulse buy.
    • Oh, I'm sure PayPal will do everything in their power to make sure there are plenty of protections in place for consumers.

    • Secure & text message don't really belong together.

      So you use something else and write software for the phones to handle it - most phones can run java applications these days and I've heard of RSA authentication even being used on the humble Z80 processor (and phones have faster processors than that). A couple of years ago software and back end hardware for this task was developed by a small company in a provincial city in Australia to be used in fuel stations in Italy. Surely a very large US company

    • Who says that it has to be via text-message? Look at Japan's Felica system- they use features like auto-lock and remote-lock to prevent unauthorized spending, and the system works loads better because you have to HAVE the phone RIGHT THERE to make a transaction-In Japan, you can pay for online purchases at a local convienience store (look at 7-Dream [] for example-yes, it's run by 7-ELEVEN, who unfortunately doesn't do this in the US) and use any method of payment to do so, be it cash, credit card, or mobile p
  • by tehwebguy ( 860335 ) on Sunday April 16, 2006 @08:59PM (#15140199) Homepage
    so far the only thing they seem to be pushing is cd/dvd sales -- how the hell could it possibly be convenient to buy a cd via paypal via phone? why would i want to send a text message, and then receive a call in order to find out the price and shipping?

    if i want music, i want it now, so if i'm shopping i will buy it at the campus music store, or if i am home i will buy it on itunes. the only time i buy cd's online at all are when they are not on itunes or at the cd store.

    there's still hope though!

    what if i could buy my movie tickets on my phone instead of waiting in line at the theater? that would actually be cool.
  • All the more reason to steal someone's cell phone...
  • Nice... (Score:5, Funny)

    by Ecko7889 ( 882690 ) on Sunday April 16, 2006 @09:00PM (#15140205)
    So now after the hookers done, all I got to do is text her?

    We'll call it Pay4Pal.
  • How do they overcome the problem of the phone being lost or stolen, and somebody else just using up all the person's available Paypal account? This is a pretty serious concern.
    • An automatic system makes a voice call to your phone after you have texted "send 14.99 to 2125551212" to 729725 ((PAYPAL)) and you touch-tone back a PIN which you set up when you activated the PayPal Mobile service. So the phone thief would need your PIN, not just your phone.
    • This is PayPal we're talking about. I'm sure that "Don't let your phone be stolen" is part of their Terms of Use, so as soon as you report that you have lost it they will immediately freeze your account, charge you a substantial fee, and then claim that you have been flagged as a possible fraud risk and confiscate what's left of your money.
      • That's pretty much what happened to me a few years back, except without the cell phone. I do something pefectly reasonable that they claim violates their ToS, and when all was said and done I was out about $1500.
    • Certain models of cells phones by Docomo and AU in Japan act both as your phone and you're credit / debit card. The technology is driven by contactless IC cards.

      Vending machines, ticket wickets and even some bullet trains now have the IC proximity sensors to detect a nearby phone. This technology is espeically prevelant in train stations throughout the Tokyo area. With the ticket wickets, you just pass your phone over the sensor and you are charged, no confirmation or PIN required. According to the Doco []
  • by mpapet ( 761907 ) on Sunday April 16, 2006 @09:05PM (#15140220) Homepage
    This problem has been solved years ago and the average mobile phone is more than capable of working as an electronic purse. A mobile phone needs no centralized network to process transactions and most certainly is more efficient and trackable than paper currency and Visa/MC association payments.

    A tangentially related way to see how abusive things are in the association world is Walmart wants to open a "bank" so they can keep a piece of the Visa/MC Association rent.

    The way this will be implemented will be the same old very inefficient way of processing payments with each company in the "chain" demanding their pound of flesh along the way.

    This idea is DOA.
    • A mobile phone needs no centralized network to process transactions and most certainly is more efficient and trackable than paper currency and Visa/MC association payments.

      Of course it needs a centralized network. Otherwise, what's to prevent me from hacking my phone and changing the amount of money that I have?

      I understand what you're saying, in a sense: the transaction processing does not have to be centralized but it definitely must be authoritative. Without an authority, you must trust the phone
      • PKI solves the problem quite elegantly.

        "Bad" phones have their key revoked.

        This mentality is exactly why the Association gets to abuse individuals.
    • It needs a centralized something to work, be it the cell provider's system, Visa/MC/etc, Paypal or the banking system, which all have centralized controls in one form or another.

      You said the problem has been solved before, I'd like to know what that solution is. I am skeptical as it would seem that the cell network providers would want a hefty piece of the action, these are the bastards that charge $3 for a 3 month expiring 100x100 wallpaper.
      • The U.S. Navy has a decentralized payment system aboard many ships.

        Practically all the cash aboard U.S. Navy ships is replaced with an electronic purse. Authorization is handled between the terminal and the card. No network required.

        And, yes, the wireless providers are their own worst enemy in this situation. They definitely can't see the forest through the trees. Which is why they'll probably be the last ones to do it.

  • by suv4x4 ( 956391 ) on Sunday April 16, 2006 @09:11PM (#15140237)
    I'd like to take the word tonight to whine about PayPal not supporting my country, Bulgaria.

    Every time I see a PayPal donate / purchase button I'm automatically filtered out since they just don't support my country and declineto accept my credit cards if I try to sign up.

    For what is considered the most popular micropayments system in the world, they'd do better to hurry up and actually support the world..
    • Wich means shopping outside my own country is out of the question.

      I only care for MMO games especially since the answer exists. Just look at Sony. They use a company called GlobalCollect who make it their business to have payment system everywhere.

      Sadly most companies online are american and they can't understand the concept of not having a credit card.

      Oh well. Less chance of me wasting my money I suppose. Like on that oblivion horse armour. Credit card only you say? Oh well, wonder if someone already po

  • Will cell phones become a wanted item by criminals? Steal a cell phone, and use it to buy stuff? The only good thing about cell phones is police can use it to track the thief. Or the thief can use the cell phone to buy something, then throw it away under the back seat in a bus.

    • You've been able to pay for things with you cell phone in Japan for years. See []. Basically they put the smart card chip in your phone and let you minimally interact with it from the phone GUI. Very convenient -- I forget my "Chicago Card" all the time... but never my cell phone. If the devices were integrated, my life would be easier :)

      Sadly there's too much worry about everything here to adopt any new technology -- so we'll always be 5-10 years behind the rest of t
    • Or the thief can use the cell phone to buy something, then throw it away under the back seat in a bus.

      Where another person picks it up, says, "Hey, cool! It's got a couple hundred bucks still on it!" and proceeds to buy something else, and then leaves it in the back of a cab, where somebody else finds it and ...
  • Guy: "Hi, sir, Could you help a poor man out and let me borrow your cell phone for a quick moment to call my family? I'm going to be late for my daughter's birthday." Me: "Sure, here you are" Guy: "Thank you kindly, sir.." Guy: *transfers cash to his paypal account, while pretending to have trouble figuring out the phone* Guy: "Ah ha!" *after having transferred the money and pretending that he finally figured out what to do* Guy: *fakes a call to his pretend family, while actually calling his voicemail* Guy
  • Donate NOW! (Score:2, Insightful)

    by VGfort ( 963346 )
    Does that mean we can have our own little Donate Now text message or recording on our cell phones?
  • I see this as a great way to get rid or receipts. Lets face it, they always give you a receipt, but ever since I was able to look at my statement online, I've never worried about receipts. Think of how much paper this will save!
    • Not to mention the complete elimination of cash worldwide (yeah, right). While I too don't worry about receipts since I got eBanking, I like to have something to verify their screw-ups against. As it is, I almost never buy anything in person anymore, and I could not have a debit card and still function with my online purchases perfectly (not because it's saved everywhere, but because I've memorized it from typing it into Newegg so many times).

      Honestly, having your local MegaStores not having an eight-fo

  • correction (Score:1, Interesting)

    by Anonymous Coward
    What is wrong with you people? Do you read things at all?

    1) Your kids can't spend your money. You still need a paypal account to buy things, which they don't have.

    2) Your money can't be stolen. You text the request for money to be sent, and they CALL YOU BACK, asking for your PIN number. If you are the only one who knows your PIN, no unauthorized transactions can go through.

    3) this service can be convient for magazine and catalog shopping. No need to call in, or go to a computer.
  • Next we will explain how freedom of speech and democracy work.
  • Bless their hearts, but, how did the editors decide a PayPal article should be placed in the Hardware section of Slashdot? :)
  • Paypal has a hard on for "limiting" account access for just about any reason today. Does anyone see the nightmare of trying to use paypal on a mobile phone? You had might as well call paypal and ask them to suspend your account, because 10 seconds after you sign up for "paypal mobile" your paypal account will suddenly have "suspicious" activity (you actually using it)and will be limited for "your" protection. Paypal limited my account access when I was using my paypal debit card out of state (one state over
  • Fantastic (Score:3, Funny)

    by xenocide2 ( 231786 ) on Sunday April 16, 2006 @11:31PM (#15140633) Homepage
    Now I can lose my cell phone and my credit card at the same time!
  • Woudln't the phone need to have some way to encrypt these text messages before sending them?  I know none of the phones I have had in the past do not encrypt the messages. This would also mean that if they did come up with some way to encrypt them, pre-existing phones would not have the ability to use this service.

    Will they allow phones that do not suport this level of security?  I would guess yes they will, because I dont think it will be secure in anyway.
  • The company's mobile service aims to use secure text messages as a payment method for direct-marketing initiatives and other 'on-the-spot' mercantile opportunities.

    What's a 'secure' text message?

    Also as 'in USA nobody uses text messaging []' who is going to use it?

    People actually have to pay to receive texts in the US (utterly idiotic at best) - is this how they are going to generate (even more) revenue from users? Will we see tiered text pricing from operators as they are able to effectively tax users?
    • People actually have to pay to receive texts in the US (utterly idiotic at best) - is this how they are going to generate (even more) revenue from users? Will we see tiered text pricing from operators as they are able to effectively tax users?

      Yes, or if not that then something equally ridiculous.
  • The example in the article is idiotic. Who is going to pay for a CD with a cell phone via text messaging? This would be insanely slow and inconvient.

    But it is ideal for vending machines. How often have you wanted something from a vending machine but had no change or cash on hand? Being able to text a message to a vending machine to pay for an ideam would be extremely handy.

    I am sure that I have read elsewhere that a system like this was already in use in Europe or Japan. Can anyone comment?
    • When out of cash and desperately trying to get home in the middle of the night, handing over a credit card to a taxi driver armed with carbon paper is truly an unsettling experience. This would be perfect for that.
  • "To the extent that digital money doesn't feel like real money, it may increase spontaneous purchasing,. . ."

    Yeah, this is what we need in the U.S.: more consumers spending money at random.

    We already have a negative savings rate [] combined with large amounts of consumer debt (for some of us at least). Thrown in the continuing increases in government borrowing [] and you have a royal, financial mess.

    I've said it for well over a decade (maybe 2 decades) that the only reason this country keeps running

  • my CC expired, forgot I hadnt update paypal, tried to use paypal, was denied obviously, I tried to change the exp in my settings, it wouldnt let me, paypal has no way of changing a CC's exp and not the CC's number, thats how captial one does it, same CC num, new exp. So I delete the card and try adding it again, cant my card has been flagged for EXSESSIVE declines, yup, one, thats all it takes. I cant add that number anymore, after numberous calls and emailed they tell me its capital ones problem and to tel

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