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Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

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Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#171

Post by t0mas88 »

dkasper wrote: post #87
welder wrote: post #84

Earlier quoted context omitted.

Nobody uses physical cards anymore... even my kids pay with their toy watch when playing restaurant Edit: Tap pay is ubiquitous in the EU

Absolutely not true. Some places still don’t even take tap to pay and still use chip.

Is that in the US? Europe hasn't used the magnetic strip on cards for years. It's all chip based and those payment terminals all take NFC / Apple Pay.

It would be suicide for a shop not to take it, I know many people that don't carry their bank card at all. Only their phone for Apple pay.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#172

Post by hugs »

Nextgrid wrote: post #120
oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

A lot of the fraud hinges on the fact that all you need to drain an account is a static card number. A lot of hacks are subsequently piled on top of that to try and make it harder (SCA/3D Secure, captchas, etc), and a lot of busywork is spent tidying up the consequences of that (chargeback handling, etc). You could eliminate a lot of the fraud by moving off a mostly-static identifier to merchant, amount and time-limi…

> You could eliminate a lot of the fraud by moving off a mostly-static identifier to merchant, amount and time-limited tokens the user generates with their bank (or the merchant redirects them there). This would address a lot of the issues - the tokens are useless when leaked...

This almost sounds like a subtle recommendation for the Lightning Network. It's based on single-use invoices that are locked to a specific recipient and is usually limited to specific amounts.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#173

Post by analog31 »

oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

I use PayPal for my tiny business. On the one hand, I'd rather not pay them 3% of my sales. On the other hand, if the features of PP (security, buyer protection, ease of use) increase my sales by a palpable amount, then it pays for itself.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#174

Post by eps »

__MatrixMan__ wrote: post #170
levelz wrote: post #124

Unless you've worked for a payment processing company, or for a major retailer that does a lot of payment processing, you have no idea how much fraud or attempted fraud happens in transactions (you can even see it as a small retailer if you are getting sales online and say you'll ship international).

A credit card number is a symmetric secret that's printed on the outside of something that you hand to strangers all day. That's not exactly best practice. If we moved to a PKI where the private keys live in secure enclaves, you could cut that fraud down significantly. But that won't happen, because then how would they justify the fees?

3DS exists and it is widely supported.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#176

Post by farrelle25 »

blacklion wrote: post #115
oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

PayPal: In Netherlands there is system called iDeal which provide online payments via tokens, without giving any of your data to seller (recipient). It is supported by all banks. It is super-convinient, you scan QR code by bank app on your smartphone if you pay on other device (laptop, computer) or link is opened by your bank app on mobile and you approve payment. You don't need to enter anything, only select your ba…

Just back from Poland- they have a great system 'BLIK' that sounds like iDeal...

Most merchants have a BLIK button... you click it, enter a 6 digit code created on your banking app. Purchase complete. Takes a few seconds. No card numbers, CCV etc..

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#177

Post by aguaviva »

deepsun wrote: post #128
blacklion wrote: post #115

Earlier quoted context omitted.

PayPal: In Netherlands there is system called iDeal which provide online payments via tokens, without giving any of your data to seller (recipient). It is supported by all banks. It is super-convinient, you scan QR code by bank app on your smartphone if you pay on other device (laptop, computer) or link is opened by your bank app on mobile and you approve payment. You don't need to enter anything, only select your ba…

Same thing in Ukraine. And it's not because they face less fraud attempts, it's just their tech is years ahead of US.

Their tech is years ahead of US.

Can you elaborate? (Am new to the topic, so your perspective would be appreciated).

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#178

Post by Iulioh »

m463 wrote: post #154
miki123211 wrote: post #149

Earlier quoted context omitted.

Most countries that aren't the US basically did this, in one way or another. There are multiple ways of doing so, two-factor authentication (think 3d secure) is one, an oAuth like system where you log in to your bank on their website and consent to a wire transfer is another. There are variations on these ideas, the system we have here gives you a 6-digit code in your banking app which you can enter on any device, tr…

> Most countries that aren't the US basically did this, in one way or another. Most countries that ARE the US put the burden on the business and the credit card companies, and limit the liability to the credit card holder ($50 max, sometimes $500) I've known people in other countries that lost money and they were SOL in comparison. Maybe they have cheaper transaction fees.

Nah, that's just because in the US people usually buy with credit while in Europe is mostly debt.

If you buy with credit you are using the bank's money, with debt your own and you have less protections in the second case.

Trust me, i have meet my fair share of adults who don't own a credit card and if they want to buy something online just charge a prepaid card with the needed amount.

American express is not accepted in a lot of places because it is only credit and the processing fees are double that of debit cards.

Visa and mastercard debit cards are accepted just because you can't only accept debit cards, a lot of vendors fought for the ability to do so.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#179

Post by leros »

doctorpangloss wrote: post #156

Yes someone can disrupt this, but only really banks and Apple can do this in the US. All you need is stakes to lose besides money, like credit scores or even like Internet access, and robust, compulsory authentication.

You can't easily disrupt it because it's a two-sided marketplace between consumers and payment providers.

You could launch a Stripe competitor called CheapPayments but it would still have to pay standard Visa/etc processing fees so it can't be cheaper than Stripe.

You could launch a Visa competitor called CheapCard that has half the processing fees of Visa, but no merchants or payment processors would take CheapCard so people would continue using Visa.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#180

Post by __MatrixMan__ »

eps wrote: post #174
__MatrixMan__ wrote: post #170

Earlier quoted context omitted.

A credit card number is a symmetric secret that's printed on the outside of something that you hand to strangers all day. That's not exactly best practice. If we moved to a PKI where the private keys live in secure enclaves, you could cut that fraud down significantly. But that won't happen, because then how would they justify the fees?

3DS exists and it is widely supported.

Doesn't that just trade one symmetric secret for another? (your password)

I suppose it's a little better because you probably haven't written your password on the side of your card, but everytime I have to go through it it feels like I'm getting phished. Also, SSL seems kind of messy for the job. You've already got the processor as a third party, now the CA's are a fourth party, plus whoever gets to install certs on that device as a fifth...

You could just have the card sign the transaction and have the merchant send that signature to the clearinghouse. For online orders, your phone could just be the payment terminal, and still the secret on the card is the signing key.

But none of that actually helps unless you deprecate the insecure stuff.

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