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I'm genuinely curious, what would be the rationale or incentive for a private payment processor (in a competitive payments market) to reject a legitimate transa

I'm genuinely curious, what would be the rationale or incentive for a private payment processor (in a competitive payments market) to reject a legitimate transaction? The only reason I can think of would be false positive on fraud detection or system error or the such, all problems with the medium, not with centralization/permissions.

michaelmrose 8y ago
Ever dealt with an unaccountable bureaucrat?
pessimizer 8y ago
How about to please a regulator who is also an indirect competitor, or to avoid bad tweets?
laretluval 8y ago
Who decides what is a legitimate transaction? If a politically undesirable group wants to accept donations, is this legitimate?
SuddsMcDuff 8y ago
> "what would be the rationale or incentive for a private payment processor (in a competitive payments market) to reject a legitimate transaction?" Paypal cite the following reasons that they may freeze or suspend an account (at their sole discretion): - You’ve received an abnormally large amount of money in your account that is way above your average - Someone has filed a complaint to Paypal about your business - A series of chargebacks have been placed against your account - Your website has questionable content - You are in violation of Paypal’s use policy. For example if you sell drugs or anything illegal, you may get banned - Your account information is not up to date or your account is not fully verified - Someone has logged into your Paypal account from a strange location. - Your credit score is low or something with your background history makes you a higher risk customer - They have detected fraudulent activity on your account. Some of these are reasonable. Some of them are highly questionable. Some of them are outrageously open to abuse.
eesmith 8y ago
https://www.americanbanker.com/news/wikileaks-blames-us-lawmakers-for-visa-mastercard-blockade https://www.americanbanker.com/news/wikileaks-blames-us-lawm... - "WikiLeaks Blames U.S. Lawmakers for Visa/MasterCard Blockade" > WikiLeaks' founder accused two members of Congress of pressuring MasterCard (MA) and Visa (V) to block payments to his group after it published thousands of confidential messages about U.S. diplomacy and the wars in Iraq and Afghanistan. > Julian Assange charged Tuesday that Sen. Joseph Lieberman of Connecticut and Rep. Peter King from New York influenced the moves by both companies in December 2010 to halt the payments. > Assange, speaking to reporters from the Ecuadorean embassy in London, where he claimed asylum in June to avoid extradition to Sweden to face charges of sexual assault, said the blockade had eliminated 95% of WikiLeaks' revenue and cost the group roughly $50 million in donations. Of course, it could be argued that we don't have a competitive payments market. But then your proposition wouldn't reflect the real world.
_trampeltier 8y ago
You maybe just don't like them. https://www.theverge.com/2018/11/9/18079880/paypal-proud-boys-gavin-mcinnes-antifa https://www.theverge.com/2018/11/9/18079880/paypal-proud-boy...
jellicle 8y ago
The payment processor makes pennies from your business. If doing business with you ever costs them more than pennies - if it costs them dollars, or hundreds of dollars, or thousands of dollars, or more - they're going to drop you. https://www.theverge.com/2018/11/9/18079880/paypal-proud-boys-gavin-mcinnes-antifa https://www.theverge.com/2018/11/9/18079880/paypal-proud-boy... Sorry, legitimate transactions! We reject you!
stale2002 8y ago
> I'm genuinely curious, what would be the rationale or incentive for a private payment processor (in a competitive payments market) to reject a legitimate transaction? This happens all of the time to lots of people. The biggest example is probably legal porn transactions that get censored by all the major financial companies. If you want to get into political discrimination, we can bring up how wikileaks, which broke zero laws, had all their payment processing revoked. And more recently, we can bring up legal services such ash GAB, that are being targeted for political reasons, and have had payment processing revoked. It is not ok that a political organization, that did not break any laws, have had multiple payment processors collude together to censor their transactions.
- retsibsi 8y ago
  > It is not ok that a political organization, that did not break any laws, have had multiple payment processors collude together to censor their transactions. It seems that the 'not breaking any laws' part should preclude actions by law enforcement/government, but why shouldn't private companies be allowed to act on political motives? I get that there's a potential slippery slope here, but it's not obvious to me that a better alternative is to force companies to e.g. facilitate the campaigning and fundraising of neo-nazis.
  - stale2002 8y ago
    The problem is when the payment companys are so big and so few, that 1 or 2 companies can basically shutdown an entire business themself (by removing their ability to be paid). The solution is to use anti monopoly laws to break them up. I don't think that companies should be forced to do something. What I instead want is for there to be enough competition in the market, such that no matter how terrible your views, there exists at least 1 one who will work with you. And if there isn't enough competition in a market, then that's a problem.
craigsmansion 8y ago
There doesn't need to be a rationale or incentive. It's electronics combined with software. At some point it will shut off or break down, probably at a time most inopportune.

michaelmrose 8y ago

Ever dealt with an unaccountable bureaucrat?

pessimizer 8y ago

How about to please a regulator who is also an indirect competitor, or to avoid bad tweets?

laretluval 8y ago

Who decides what is a legitimate transaction? If a politically undesirable group wants to accept donations, is this legitimate?

SuddsMcDuff 8y ago

> "what would be the rationale or incentive for a private payment processor (in a competitive payments market) to reject a legitimate transaction?" Paypal cite the following reasons that they may freeze or suspend an account (at their sole discretion): - You’ve received an abnormally large amount of money in your account that is way above your average - Someone has filed a complaint to Paypal about your business - A series of chargebacks have been placed against your account - Your website has questionable content - You are in violation of Paypal’s use policy. For example if you sell drugs or anything illegal, you may get banned - Your account information is not up to date or your account is not fully verified - Someone has logged into your Paypal account from a strange location. - Your credit score is low or something with your background history makes you a higher risk customer - They have detected fraudulent activity on your account. Some of these are reasonable. Some of them are highly questionable. Some of them are outrageously open to abuse.

eesmith 8y ago

https://www.americanbanker.com/news/wikileaks-blames-us-lawmakers-for-visa-mastercard-blockade https://www.americanbanker.com/news/wikileaks-blames-us-lawm... - "WikiLeaks Blames U.S. Lawmakers for Visa/MasterCard Blockade" > WikiLeaks' founder accused two members of Congress of pressuring MasterCard (MA) and Visa (V) to block payments to his group after it published thousands of confidential messages about U.S. diplomacy and the wars in Iraq and Afghanistan. > Julian Assange charged Tuesday that Sen. Joseph Lieberman of Connecticut and Rep. Peter King from New York influenced the moves by both companies in December 2010 to halt the payments. > Assange, speaking to reporters from the Ecuadorean embassy in London, where he claimed asylum in June to avoid extradition to Sweden to face charges of sexual assault, said the blockade had eliminated 95% of WikiLeaks' revenue and cost the group roughly $50 million in donations. Of course, it could be argued that we don't have a competitive payments market. But then your proposition wouldn't reflect the real world.

_trampeltier 8y ago

You maybe just don't like them. https://www.theverge.com/2018/11/9/18079880/paypal-proud-boys-gavin-mcinnes-antifa https://www.theverge.com/2018/11/9/18079880/paypal-proud-boy...

jellicle 8y ago

The payment processor makes pennies from your business. If doing business with you ever costs them more than pennies - if it costs them dollars, or hundreds of dollars, or thousands of dollars, or more - they're going to drop you. https://www.theverge.com/2018/11/9/18079880/paypal-proud-boys-gavin-mcinnes-antifa https://www.theverge.com/2018/11/9/18079880/paypal-proud-boy... Sorry, legitimate transactions! We reject you!

stale2002 8y ago

> I'm genuinely curious, what would be the rationale or incentive for a private payment processor (in a competitive payments market) to reject a legitimate transaction? This happens all of the time to lots of people. The biggest example is probably legal porn transactions that get censored by all the major financial companies. If you want to get into political discrimination, we can bring up how wikileaks, which broke zero laws, had all their payment processing revoked. And more recently, we can bring up legal services such ash GAB, that are being targeted for political reasons, and have had payment processing revoked. It is not ok that a political organization, that did not break any laws, have had multiple payment processors collude together to censor their transactions.

retsibsi 8y ago
> It is not ok that a political organization, that did not break any laws, have had multiple payment processors collude together to censor their transactions. It seems that the 'not breaking any laws' part should preclude actions by law enforcement/government, but why shouldn't private companies be allowed to act on political motives? I get that there's a potential slippery slope here, but it's not obvious to me that a better alternative is to force companies to e.g. facilitate the campaigning and fundraising of neo-nazis.
- stale2002 8y ago
  The problem is when the payment companys are so big and so few, that 1 or 2 companies can basically shutdown an entire business themself (by removing their ability to be paid). The solution is to use anti monopoly laws to break them up. I don't think that companies should be forced to do something. What I instead want is for there to be enough competition in the market, such that no matter how terrible your views, there exists at least 1 one who will work with you. And if there isn't enough competition in a market, then that's a problem.

craigsmansion 8y ago

There doesn't need to be a rationale or incentive. It's electronics combined with software. At some point it will shut off or break down, probably at a time most inopportune.