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PayPal president David Marcus: Bitcoin is good, NFC is bad

53 points by a3voices 13y ago

JimmaDaRustla 13y ago
Um, what? He makes NFC sound inconvenient to customers - how can you be more minimalistic in approach other than just pressing two devices together and having the transaction complete seconds later? I think he may be on to something - there is the current development of presenting cards by an NFC enabled device, like a phone. This is a huge process to get the virtual card to the customer securely - one of the abstract approaches, which I don't think is really being taken seriously, is virtualizing the card communication in a cloud, so the card is never downloaded or emulated on the device, like an Android phone. This is kind of leaning towards an "invisible" transaction he speaks of, where a secure payment could be done as an after thought without an actual device or interaction?
- a3voices 13y ago
  You still have to unlock your phone and press some buttons on it. It's arguably not any easier than pulling a credit card out of your wallet and swiping it.
  - mrjatx 13y ago
    My Android phone unlocks with two taps, iPhones nowadays unlock with a fingerprint swipe.
  - JimmaDaRustla 13y ago
    Context was NFC, no swiping, just tapping and done. I was just using a phone as an example for virtualized cards, which kind of feeds his thoughts on an "invisible" transaction because the interaction between terminal and card is becoming emulated and not two physical devices communicating between each other.
    - deleted 13y ago
      [deleted]
- brownbat 13y ago
  "It's not a question of whether people at a payment terminal would prefer to tap or swipe, he said, but a reality that people don't want to go to a payment terminal at all." I think this is right. The amazing future doesn't change what I get out of my pocket. The amazing future lets me walk into a store and just walk out with things without stopping, while some computers in the background just make sure all accounts are settled.
  - JimmaDaRustla 13y ago
    Truth be told, merchants don't want that risk. Merchants don't even want NFC - they want payment to be made securely and not have negative impact on their customers.
    - seiji 13y ago
      Apple Stores allow you to walk in, scan an item with your phone's camera, pay, put the item in your backpack, then walk out without talking to anybody. There's a limit ($200 max on phone self-checkout), but they don't seem concerned with shrink.
      - ceejayoz 13y ago
        Incidentally, it's really freaky to see this happen.
      - JimmaDaRustla 13y ago
        I work in the smart card payment industry for a large north american bank. I've been in conferences with actual merchants voicing their concerns. I didn't make my observations sitting at Starbucks.
        seiji 13y ago
        Starbucks is a great example of another company that allows payment without a card or NFC, though you still go through the checkout person.
btbuildem 13y ago
Or, you know, BTC transactions via NFC..
- mrb 13y ago
  I thought about this and it would be a great idea. Today's solutions typically involve scanning a QR code and the Bitcoin wallet sends the transaction over the Internet. But when you have poor signal, this does not work well. Instead, a Bitcoin wallet could send the transaction (a few hundred bytes) over NFC. This gives an extra advantage: the point-of-sale would broadcast the transaction to hundreds of Bitcoin p2p nodes itself, hence reducing the risk of accepting a zero-confirmation transaction!
  - 00rion 13y ago
    If it takes approximately 10 minutes to confirm a transaction, it seems like you would be putting merchants at risk. Perhaps some sort of bitcoin insurance would mitigate this risk for a small monthly fee.
- skloubkov 13y ago
  Would be cool to be able to tap to pay instead of scan to pay.
calpaterson 13y ago
I think NFC payment is more compelling in countries like the UK where you cannot swipe a card, you have to insert it and then enter your PIN (all or nearly UK bank cards are two-factor). For payments smaller than ~£15 though, you can just use NFC, which is a lot quick, especially for crowded pubs.
- canistr 13y ago
  I disagree considering that in Canada, we already have PayPass (by Mastercard) and Interact Flash for simply tapping and paying on the go. It's faster than logging into my phone and keeps the simplicity of credit cards. And the risk is on the credit card companies for small payments (<$50).
- treerock 13y ago
  You can do this with bank cards[1][2] in the UK. I've seen them used in Gregg's. [1]: https://en.wikipedia.org/wiki/Contactless_smart_card https://en.wikipedia.org/wiki/Contactless_smart_card [2]: http://www.bbc.co.uk/news/business-18265388 http://www.bbc.co.uk/news/business-18265388
- bnastic 13y ago
  Most debit/credit cards in the UK are now contactless, and the number of retailers deploying contactless card readers seems to be steadily increasing. It is easy and convenient, I see no need for NFC as it stands right now.
VLM 13y ago
The goal of NFC seems to be profit off mistakes. Whoops finger slipped and that went on the corporate card; well, there's a $25 charge to transfer an accidental charge. Or Whoops finger slipped and that spouse christmas gift went on the shared expenses card. Well, if you don't want her to find out early, there's a simple $25 convenience fee to transfer to a different account. Or Whoops paid for the new snowblower in "cash" using direct debit from the checking account instead of the credit card. Woo hoo thats ten bounced checks at $50 pure profit, err, I mean, "fee", each!
- hdevalence 13y ago
  Speak for yourself, I have an NFC debit card and it's quite convenient, and has none of these problems.
- swombat 13y ago
  I've been using NFC to make various purchases for some time and have not made one single mistake. Even if I did, where exactly do these $25 charges come from? Who charges them? I've not been charged any extra charges for using NFC. The goal of NFC seems to be to make it easier to spend small amounts of money.
  - sjtgraham 13y ago
    I agree. In the event I did make a mistake I can log on to online banking (or open the app on my phone) and make a almost instant transfer the money to another account using faster payments for free. Even if these fees were assessed, it strikes me as an incredibly inefficient way to generate revenue.
- nwh 13y ago
  I've been using NFC for years now, and I've never once had a charge or fee for the privilege.
- jrockway 13y ago
  Unfortunately, the "near" in NFC really makes that difficult. The antenna on the reader and the antenna on the card need to be about a centimeter apart. Only if you're really lucky will it work through a wallet, and with multiple cards in the way? Unlikely to work.
dcc1 13y ago
Uhm f&k paypal, they regularly screw over sellers and businesses no matter how long you sell with them using paypal (or on ebay) or how low your chargeback rate is or how high your rating is. f*k em, paypal are driving themselves to irrelevancy On bright side 2 years ago when paypal screwed me and my company it pushed me to look at alternatives and i bought a pile of bitcoins when testing how it works, this turned out to be the best decision ever, thanks paypal for making me $$$
ck2 13y ago
And taking 14% of every sale on ebay must be awesome for them. Was kinda hoping Bitcoin would finally be the micropayment system that kneecaps them.
- tomasien 13y ago
  Paypal hangs on for 2 reasons: 1. Foreign countries, where credit cards aren't common (but banks are) 2. People in the US who hate entering CC info for every payment 3. Merchants without alternatives People have felt for a while that there's nothing that can solve all 3 of those things, but I think there is.
- rthomas6 13y ago
  All ebay has to do is accept bitcoins. What is stopping something like this? If Ebay uses a service to convert directly from BTC to dollars, there's no volatility risk. Is it fear of bad press? Fear of angering existing players like Paypal? Is it logistics? I'm biased, but why wouldn't Ebay accept an additional form of payment for free?
  - Nursie 13y ago
    Why would ebay switch away from Paypal? ebay own paypal!
    - rthomas6 13y ago
      Ebay doesn't have to switch away from anything to accept Bitcoins. They just add another payment method.
      - icebraining 13y ago
        And cannibalize itself? Why would they do that?
        waps 13y ago
        You're assuming ebay wouldn't take 14% of bitcoin sales. Hell, since they don't owe the credit card tax they could probably make it 10% and still make more per-transaction.
cs702 13y ago
"I really like Bitcoin. I own bitcoins." - David Marcus, President, PayPal He adds: "People are confused. They think because it's called cryptocurrency it's a currency. I don't think it is a currency. It's a store of value, a distributed ledger. It's a great place to put assets, especially in places like Argentina with 40 percent inflation, where $1 today is worth 60 cents in a year, and a government's currency does not hold value. It's also a good investment vehicle if you have an appetite for risk. But it won't be a currency until volatility slows down. Whenever the regulatory framework is clearer, and the volatility comes down, then we'll consider it." I agree with him that Bitcoin is a ready-made solution for people living in less stable economies who want to diversify away from their (risky) local currency, particularly if they find it difficult or impossible to buy US dollars or euros through their local financial system. Would you rather own (a) savings in a bank account denominated in a "soft" currency (whether Argentine pesos, Bolivian bolivianos, Libyan dinars, North Korean wons, Syrian pounds, Venezuelan bolivares, or some other one), or (b) bitcoins, which, despite their recent volatility, are used globally[1] and do not require trusting a third party? -- [1] http://getaddr.bitnodes.io/251/ http://getaddr.bitnodes.io/251/
- chalst 13y ago
  I have the opposite view: Bitcoins are exciting and promising as a currency, but they are very flawed as a store of value. If for some reason, I had no confidence in any currency/bonds I could get my hands on, I would prefer gold to Bitcoins, because I expect that, while it is more volatile than a properly run currency, it is far less volatile than Bitcoin and I expect that to remain so in the future.
- gasull 13y ago
  I would rather have bitcoins than any other currency for my savings. For spending, you just need the local currency, since Bitcoin isn't accepted in most places yet.
  - lukev 13y ago
    Really? For your savings? Bitcoin is many things, but a low-risk investment is not one of them.
canistr 13y ago
David Marcus basically wants the IBM RFID payment solution: https://www.youtube.com/watch?v=eob532iEpqk https://www.youtube.com/watch?v=eob532iEpqk
wellboy 13y ago
Erm, it is forbidden to buy Bitcoins with paypal btw...by paypal
- dingaling 13y ago
  Yes, it's a shame that Mr Marcus didn't discuss how he bought his Bitcoins. Did he have to play the two-step bank account shuffle like the rest of us?
- oakwhiz 13y ago
  Quite ironic.
- skloubkov 13y ago
  I think this comes from the fact that Bitcoin transactions cant be refunded, but PayPal ones can be. So buyer could cancel the purchase and keep bitcoin with merchant being unable to do anything.
trekky1700 13y ago
Of course the president of PayPal would prefer a digital method of payments that he can capitalize on to one that works in physical shops. I use NFC as often as possible because it is so much faster and more convenient, especially for small purchases.
- andrewfong 13y ago
  Care to elaborate on how it's faster and more convenient than swiping?
  - MAGZine 13y ago
    tap done. No handing cards, picking up terminals, signing receipts, checking signatures or any other nonsense. It's also secure--tapping is chip compliant. You can also have more than one card on your phone.
  - trekky1700 13y ago
    I give my card to the cashier, they swipe it, I then wait for a receipt to print, wait for the cashier to hand me a pen and the receipt, sign the receipt, hand it back to the cashier with the pen. If they're doing it right, they compare the signature to the one on the card, but in most cases I am then done. versus I wait for the onscreen prompt, I tap my card, hear a satisfying beep and am done. It's pretty obvious the difference.
gcb0 13y ago
Reason: they can assimilate bit and become the major exchange because they are already a mane brand. While with nfc the phone manufacturers have full control and they will be dead in the water while Apple/Google process all the transactions.

53 points by a3voices 13y ago

Um, what? He makes NFC sound inconvenient to customers - how can you be more minimalistic in approach other than just pressing two devices together and having the transaction complete seconds later? I think he may be on to something - there is the current development of presenting cards by an NFC enabled device, like a phone. This is a huge process to get the virtual card to the customer securely - one of the abstract approaches, which I don't think is really being taken seriously, is virtualizing the card communication in a cloud, so the card is never downloaded or emulated on the device, like an Android phone. This is kind of leaning towards an "invisible" transaction he speaks of, where a secure payment could be done as an after thought without an actual device or interaction?

a3voices 13y ago
You still have to unlock your phone and press some buttons on it. It's arguably not any easier than pulling a credit card out of your wallet and swiping it.
- mrjatx 13y ago
  My Android phone unlocks with two taps, iPhones nowadays unlock with a fingerprint swipe.
- JimmaDaRustla 13y ago
  Context was NFC, no swiping, just tapping and done. I was just using a phone as an example for virtualized cards, which kind of feeds his thoughts on an "invisible" transaction because the interaction between terminal and card is becoming emulated and not two physical devices communicating between each other.
  - deleted 13y ago
    [deleted]
brownbat 13y ago
"It's not a question of whether people at a payment terminal would prefer to tap or swipe, he said, but a reality that people don't want to go to a payment terminal at all." I think this is right. The amazing future doesn't change what I get out of my pocket. The amazing future lets me walk into a store and just walk out with things without stopping, while some computers in the background just make sure all accounts are settled.
- JimmaDaRustla 13y ago
  Truth be told, merchants don't want that risk. Merchants don't even want NFC - they want payment to be made securely and not have negative impact on their customers.
  - seiji 13y ago
    Apple Stores allow you to walk in, scan an item with your phone's camera, pay, put the item in your backpack, then walk out without talking to anybody. There's a limit ($200 max on phone self-checkout), but they don't seem concerned with shrink.
    - ceejayoz 13y ago
      Incidentally, it's really freaky to see this happen.
    - JimmaDaRustla 13y ago
      I work in the smart card payment industry for a large north american bank. I've been in conferences with actual merchants voicing their concerns. I didn't make my observations sitting at Starbucks.
      - seiji 13y ago
        Starbucks is a great example of another company that allows payment without a card or NFC, though you still go through the checkout person.

btbuildem 13y ago

Or, you know, BTC transactions via NFC..

mrb 13y ago
I thought about this and it would be a great idea. Today's solutions typically involve scanning a QR code and the Bitcoin wallet sends the transaction over the Internet. But when you have poor signal, this does not work well. Instead, a Bitcoin wallet could send the transaction (a few hundred bytes) over NFC. This gives an extra advantage: the point-of-sale would broadcast the transaction to hundreds of Bitcoin p2p nodes itself, hence reducing the risk of accepting a zero-confirmation transaction!
- 00rion 13y ago
  If it takes approximately 10 minutes to confirm a transaction, it seems like you would be putting merchants at risk. Perhaps some sort of bitcoin insurance would mitigate this risk for a small monthly fee.
skloubkov 13y ago
Would be cool to be able to tap to pay instead of scan to pay.

calpaterson 13y ago

I think NFC payment is more compelling in countries like the UK where you cannot swipe a card, you have to insert it and then enter your PIN (all or nearly UK bank cards are two-factor). For payments smaller than ~£15 though, you can just use NFC, which is a lot quick, especially for crowded pubs.

canistr 13y ago
I disagree considering that in Canada, we already have PayPass (by Mastercard) and Interact Flash for simply tapping and paying on the go. It's faster than logging into my phone and keeps the simplicity of credit cards. And the risk is on the credit card companies for small payments (<$50).
treerock 13y ago
You can do this with bank cards[1][2] in the UK. I've seen them used in Gregg's. [1]: https://en.wikipedia.org/wiki/Contactless_smart_card https://en.wikipedia.org/wiki/Contactless_smart_card [2]: http://www.bbc.co.uk/news/business-18265388 http://www.bbc.co.uk/news/business-18265388
bnastic 13y ago
Most debit/credit cards in the UK are now contactless, and the number of retailers deploying contactless card readers seems to be steadily increasing. It is easy and convenient, I see no need for NFC as it stands right now.

VLM 13y ago

The goal of NFC seems to be profit off mistakes. Whoops finger slipped and that went on the corporate card; well, there's a $25 charge to transfer an accidental charge. Or Whoops finger slipped and that spouse christmas gift went on the shared expenses card. Well, if you don't want her to find out early, there's a simple $25 convenience fee to transfer to a different account. Or Whoops paid for the new snowblower in "cash" using direct debit from the checking account instead of the credit card. Woo hoo thats ten bounced checks at $50 pure profit, err, I mean, "fee", each!

hdevalence 13y ago
Speak for yourself, I have an NFC debit card and it's quite convenient, and has none of these problems.
swombat 13y ago
I've been using NFC to make various purchases for some time and have not made one single mistake. Even if I did, where exactly do these $25 charges come from? Who charges them? I've not been charged any extra charges for using NFC. The goal of NFC seems to be to make it easier to spend small amounts of money.
- sjtgraham 13y ago
  I agree. In the event I did make a mistake I can log on to online banking (or open the app on my phone) and make a almost instant transfer the money to another account using faster payments for free. Even if these fees were assessed, it strikes me as an incredibly inefficient way to generate revenue.
nwh 13y ago
I've been using NFC for years now, and I've never once had a charge or fee for the privilege.
jrockway 13y ago
Unfortunately, the "near" in NFC really makes that difficult. The antenna on the reader and the antenna on the card need to be about a centimeter apart. Only if you're really lucky will it work through a wallet, and with multiple cards in the way? Unlikely to work.

dcc1 13y ago

Uhm f&k paypal, they regularly screw over sellers and businesses no matter how long you sell with them using paypal (or on ebay) or how low your chargeback rate is or how high your rating is. f*k em, paypal are driving themselves to irrelevancy On bright side 2 years ago when paypal screwed me and my company it pushed me to look at alternatives and i bought a pile of bitcoins when testing how it works, this turned out to be the best decision ever, thanks paypal for making me $$$

ck2 13y ago

And taking 14% of every sale on ebay must be awesome for them. Was kinda hoping Bitcoin would finally be the micropayment system that kneecaps them.

tomasien 13y ago
Paypal hangs on for 2 reasons: 1. Foreign countries, where credit cards aren't common (but banks are) 2. People in the US who hate entering CC info for every payment 3. Merchants without alternatives People have felt for a while that there's nothing that can solve all 3 of those things, but I think there is.
rthomas6 13y ago
All ebay has to do is accept bitcoins. What is stopping something like this? If Ebay uses a service to convert directly from BTC to dollars, there's no volatility risk. Is it fear of bad press? Fear of angering existing players like Paypal? Is it logistics? I'm biased, but why wouldn't Ebay accept an additional form of payment for free?
- Nursie 13y ago
  Why would ebay switch away from Paypal? ebay own paypal!
  - rthomas6 13y ago
    Ebay doesn't have to switch away from anything to accept Bitcoins. They just add another payment method.
    - icebraining 13y ago
      And cannibalize itself? Why would they do that?
      - waps 13y ago
        You're assuming ebay wouldn't take 14% of bitcoin sales. Hell, since they don't owe the credit card tax they could probably make it 10% and still make more per-transaction.

cs702 13y ago

"I really like Bitcoin. I own bitcoins." - David Marcus, President, PayPal He adds: "People are confused. They think because it's called cryptocurrency it's a currency. I don't think it is a currency. It's a store of value, a distributed ledger. It's a great place to put assets, especially in places like Argentina with 40 percent inflation, where $1 today is worth 60 cents in a year, and a government's currency does not hold value. It's also a good investment vehicle if you have an appetite for risk. But it won't be a currency until volatility slows down. Whenever the regulatory framework is clearer, and the volatility comes down, then we'll consider it." I agree with him that Bitcoin is a ready-made solution for people living in less stable economies who want to diversify away from their (risky) local currency, particularly if they find it difficult or impossible to buy US dollars or euros through their local financial system. Would you rather own (a) savings in a bank account denominated in a "soft" currency (whether Argentine pesos, Bolivian bolivianos, Libyan dinars, North Korean wons, Syrian pounds, Venezuelan bolivares, or some other one), or (b) bitcoins, which, despite their recent volatility, are used globally[1] and do not require trusting a third party? -- [1] http://getaddr.bitnodes.io/251/ http://getaddr.bitnodes.io/251/

chalst 13y ago
I have the opposite view: Bitcoins are exciting and promising as a currency, but they are very flawed as a store of value. If for some reason, I had no confidence in any currency/bonds I could get my hands on, I would prefer gold to Bitcoins, because I expect that, while it is more volatile than a properly run currency, it is far less volatile than Bitcoin and I expect that to remain so in the future.
gasull 13y ago
I would rather have bitcoins than any other currency for my savings. For spending, you just need the local currency, since Bitcoin isn't accepted in most places yet.
- lukev 13y ago
  Really? For your savings? Bitcoin is many things, but a low-risk investment is not one of them.

canistr 13y ago

David Marcus basically wants the IBM RFID payment solution: https://www.youtube.com/watch?v=eob532iEpqk https://www.youtube.com/watch?v=eob532iEpqk

wellboy 13y ago

Erm, it is forbidden to buy Bitcoins with paypal btw...by paypal

dingaling 13y ago
Yes, it's a shame that Mr Marcus didn't discuss how he bought his Bitcoins. Did he have to play the two-step bank account shuffle like the rest of us?
oakwhiz 13y ago
Quite ironic.
skloubkov 13y ago
I think this comes from the fact that Bitcoin transactions cant be refunded, but PayPal ones can be. So buyer could cancel the purchase and keep bitcoin with merchant being unable to do anything.

trekky1700 13y ago

Of course the president of PayPal would prefer a digital method of payments that he can capitalize on to one that works in physical shops. I use NFC as often as possible because it is so much faster and more convenient, especially for small purchases.

andrewfong 13y ago
Care to elaborate on how it's faster and more convenient than swiping?
- MAGZine 13y ago
  tap done. No handing cards, picking up terminals, signing receipts, checking signatures or any other nonsense. It's also secure--tapping is chip compliant. You can also have more than one card on your phone.
- trekky1700 13y ago
  I give my card to the cashier, they swipe it, I then wait for a receipt to print, wait for the cashier to hand me a pen and the receipt, sign the receipt, hand it back to the cashier with the pen. If they're doing it right, they compare the signature to the one on the card, but in most cases I am then done. versus I wait for the onscreen prompt, I tap my card, hear a satisfying beep and am done. It's pretty obvious the difference.

gcb0 13y ago

Reason: they can assimilate bit and become the major exchange because they are already a mane brand. While with nfc the phone manufacturers have full control and they will be dead in the water while Apple/Google process all the transactions.