4 ms·
It's an odd day when a market sector is so messed up that it seems like a good thing that a credit card company is entering it. I hope their entry somehow impro
by follower 16y ago
It's an odd day when a market sector is so messed up that it seems like a good thing that a credit card company is entering it. I hope their entry somehow improves the behavior of both companies.
(Although I note it seems it will be US only for the moment.)
- nkassis 16y agoWell to be fair Visa isn't responsible for some the of the crazy credit card stuff. They provide the network, fraud detection etc. Blame the lenders for the bad terms.
- dangrossman 16y agoVisa's responsible for most of the reasons people hate PayPal. - Visa's the reason PayPal holds sellers 100% liable for fraudulent payments. - Visa's the reason PayPal holds funds for a minimum of 6 months if they freeze an account. - Visa's the reason for PayPal denying an account to that "sell experiences" startup that complained on HN a week or two ago. - Visa's the reason PayPal is so quick to freeze an account for anything resembling a risk, because Visa requires its processors stay under a ~1% chargeback ratio (in % of volume, which means far less than 1% of transactions since the fraudulent ones tend to be the bigger ones). Sure PayPal shares some of the blame for their customer support issues, but the reasons people have to deal with support in the first place usually boil down to Visa operating regulations that PayPal's policies are built around.
- cabalamat 16y agoHow is Visa responsible for all this?
- mfringel 16y agoHow is Visa responsible for all this? Because Paypal's general annoyance factor is (likely) the path of least resistance for compliance with Visa's rules for a person-to-person payment service.
- cabalamat 16y agoSorry, I don't follow your reasoning. Could you restate that?
- eli 16y agoBecause Visa puts all the risk of fraud onto PayPal.
- cabalamat 16y agoI'm not sure I follow you. if Alice pays money from her PayPal account into Bob's payPal account, how is Visa a party in that transaction?
- dangrossman 16y agoVisa sets the rules PayPal has to work under for credit card payments. Most of these issues are account-wide things, so it doesn't matter that some of the payments you get aren't funded by a credit card. If you look risky, you look risky, and there's the chance some of your future payments will be by credit card, so better shut you down. If you're shut down, some of your payments were paid by credit card, so better to have a single policy that says to hold all the funds for 6 months (the standard period to wait out future chargebacks), rather than split up your balance by payment source, etc.
- nwmcsween 16y agoNo paypal isn't a bank under American law meaning they aren't regulated or have to deal with the same rules as banks - this is the reason they can do those things not because of visa.
- dangrossman 16y agoIt's not a bank in America, though it is in other countries. It's a registered money transfer agent in most states, other names in others. Regardless, banks that offer merchant accounts do the exact same things, so how would it be different if PayPal were a bank? They'd be doing the same things, stemming from the same Visa policies.