Could Apple Be Getting Ready To Launch Electronic Payments?
Any big new project by Apple would be, by definition, news. Such was the case when sources told Re/code that the company had been interviewing senior payments industry executives ahead of a plan to launch an electronic payments business.
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Since: Nov 13
#1 Apr 22, 2014
Amazon / Apple / Braintree / Dwolla / Google / Isis / Square / Stripe / Whoever Payments—the facts …
Online or at physical point-of-sale, via plastic or mobile phone—from the merchant payee’s point of view—all of the “non-bank” providers suffer the same serious handicap that eBay’s clunky PayPal suffers: none have interactive access to buyers’ funds held in retail banking debit accounts, nor to retail banking credit accounts (as do have the “bankcards” MasterCard and Visa); their only reliable access to payers’ funds is as Credit Card Merchant Account operators (which is what “PreyPal” claims to be when it wants to appear not to be operating its “pretend bank”) via their own “real” retail banker.
Even if any of these middlemen make use of direct debits via the ACH system (as “PreyPal” prefers to do to more cheaply access payers’ funds), the access is not interactive: there is no immediate acceptance of the debit by the bank nor any guarantee that, the following day, the bank won’t reverse the debit due to an insufficiency of funds; the simple fact is, direct debit via ACH is not a suitable medium for physical POS transaction payments where the goods involved are going to immediately walk out the door; the only safe route for a merchant for such transactions (credit or debit) is via a retail bank Credit Card Merchant Account with its interactive linking to the retail banking system …
Regardless, all these “pretenders” are parasitic middlemen that, in the main, ride—precariously—on the backs of the retail banks’ existing systems; they make their money out of the difference between what the banks/MasterCard/Visa charge them and what they then charge their merchant-payee customers; therefore, their services, invariably, are going to be dearer, or are unlikely to be cheaper, unless they are being subsidized; anyone that thinks otherwise has been drinking too liberally of the disingenuous nonsense that continually flows from the eBay Dept of Spin …
And,“PreyPal” is different in that it will hold onto payees’ funds:“PreyPal” operates a “pretend bank”—the “bank” they have to unlawfully hold onto merchant-payees’ receipts, and the “bank” they don’t have when the banking regulator comes sniffing around. That “PreyPal” manages to skirt wholly around U.S. banking regulations while operating this clunky, unlicensed, unregulated, non-FDIC-insured,“pretend bank”, frankly, defies belief; possibly it’s due to the same bureaucratic laziness/corruption that allows eBay to knowingly and calculatedly facilitate, massive, blatant, auction fraud on the consumers of the world … http://bit.ly/11F2eas
Merchants who receive payments via “PreyPal” also face the additional problem that, unlike MasterCard and Visa,“PreyPal” will not invest in the human resources necessary to defend a credit card charge-back by a buyer—even if it is defensible; for most payees “PreyPal” will deal with the matter in the most cost effective way for them, and that is to acquiesce to the chargeback and let the payee take the loss. The reality is, anyone that accepts payments via “PreyPal” does so at their constant peril …
Undoubtedly,“digital wallets” are the way of the future for buyers, particularly for online payments, and with the recent arrival of the professional mobile/plastic POS/online digital wallets from MasterCard (“MasterPass”) and Visa (“V.me”), these “payments pretenders”—with the exception of where they are mandated/integrated into an online marketplace—are now effectively redundant …
With respect to physical point-of-sale transactions by such pretenders (Square excepted, as Square offers unique hardware solutions for particular merchant situations), can I simply invite readers to, next time they visit The Home Depot, ask a cashier how “Pay Here With PayPal” is going—LOL … http://bit.ly/UVXx53
Since: Nov 13
#3 Apr 23, 2014
As far as “payments” are concerned, there are already two elephants in the room, the “bankcards”, MasterCard and Visa; if anyone thinks that there is room for anyone else to be given interactive access to the banks of the world’s customers’ accounts, I think that they are dreaming. There simply is no way that the world’s banks are going to let every “payment pretender” have direct, unfettered access to their customers’ funds—that would undoubtedly create a nightmare for the banks.
You only have to follow the negative comments all over the internet about PayPal’s Credit Card Merchant Account operation to understand the potential problems involved for the banks with such “middleman” operators. Indeed, the suggestion is that “PreyPal” is now applying more, and lengthy, holds on their payee’s funds because “the banks” have put “PreyPal” on notice that they are not happy with the ever-increasing number of complaints from their card users about PayPal’s unsatisfactory customer support and, apparently, non-existent transaction dispute mediation process. Apparently,“PreyPal”—unlike the banks—will not invest in the human resources necessary to professionally moderate such disputes, and will not now defend a charge-back by a buyer—even if it is defensible; “PreyPal” will now simply deal with the matter in the most self-interested way for them, and that is to acquiesce to the chargeback and let the payee carry the can. The reality is, anyone that accepts payments via “PreyPal”—or any other third-party payments “pretender”—does so at their constant peril …
Regardless, as others have said, the banks and MasterCard/Visa already have an enormous installed base of “tap and go” NFC terminals; and, the resulting “Chip and PIN” operation, via card or phone, could not be any simpler (particularly by card), or more secure …
Apple undoubtedly already well understands this situation and I doubt they have any serious idea of trying to expand their payments system outside of their own sales. I therefore wonder if these “stories” are simply the work of the fertile imaginations of the media release regurgitators that today disguise themselves as journalists …
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