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A failure of security systems at PayPal is causing concern for German banks

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Re: A failure of security systems at PayPal is causing concern for German banks

#71

Post by rcbdev »

pbmonster wrote: post #66
fweimer wrote: post #11

Earlier quoted context omitted.

The existing giro system is the real Paypal competitor. Most Europeans had access to Paypal-style money transfers before they had email. Merchants probably want to rely on another party to maintain their integration, but there is no real need for another centralized service similar to Paypal. (The U.S. really is an outlier among developed nations in that its giro system is not widely used, and many residents would no…

> The existing giro system is the real Paypal competitor. Most Europeans had access to Paypal-style money transfers before they had email. Not at all, not even close! In most cases, that's wrong even today. Want to sell something online? A book you wrote, a game you made? There's no way for people to pay you via giro and automatically receiving the good on the page where the payment process was initiated. Giro is not…

Austria has the state-run EPS system. It's very ubiquitous here, I use it for most online payments.

Re: A failure of security systems at PayPal is causing concern for German banks

#72

Post by tgsovlerkhgsel »

nicce wrote: post #58
mrweasel wrote: post #27

Earlier quoted context omitted.

They never really had much of a reason to create a competitor. There where already plenty of alternatives once online shopping/payments became a thing. Here you could do "cash on delivery", credit/debit card, account transfers (yes even across banks, it not as big an issue as US banks makes it) or you could send stamps (not a popular options). There was never a need for PayPal or PayPal style services. These days it'…

> There where already plenty of alternatives once online shopping/payments became a thing. Let’s say direct bank transfers are not counted. What alternatives are not based on Visa/Mastercard on global scale?

The "global" is the problem here.

Each country had a local solution. Direct transfers, or better direct debit, was the common way in Germany. You literally just entered your bank account number and that was payment, the seller would debit it from your account. Zero authentication, and it worked - never had a fraud issue (in the background, I assume sellers checked the delivery address against some database before accepting this, as the seller would ultimately be on the hook for any fraud).

Aside from manual bank transfers (seller ships when the money arrives 1-3 business days later) there were also two systems based on direct bank transfers. One (Sofortüberweisung/Sofort) was essentially institutionalized phishing - you give a third party your banking credentials, they log into your account, snoop around a bit, wire the money to the merchant using your credentials and confirm to the merchant that your account has enough money and the wire is happening. The other was a similar service but by the banks, so you'd log in directly at your bank to authorize the transfer.

Most other European countries had other local systems that covered this need, but there was nothing global. Globally, your best bet for small amounts is unfortunately likely still PayPal unless your counterparty accepts crypto. For bigger amounts, there is Wise and similar services (note that I've had a horrible experience with Wise - KYC asking for things that didn't exist, luckily before they had my money to hold hostage). Wiring directly to accounts with Revolut also works reasonably well.

For transfers within the Euro zone, a regular SEPA bank transfer is easiest, with the only "downside" that you need to ask for the destination IBAN rather than just a phone number or similar that some of the other systems support.

Re: A failure of security systems at PayPal is causing concern for German banks

#73

Post by time0ut »

hibikir wrote: post #35
ronsor wrote: post #2

PayPal security is amazing. It randomly locks people out of their accounts and randomly closes their accounts too, but actual fraudsters and criminals are never deterred.

I never worked for PayPal, but I did for a competitor. Dealing with fraud is a red queen game: The fraudsters can keep trying until they find what gaps are there in your system, and will sometimes communicate with each other: Part of our defense system involved infiltrating some of those spaces and seeing the guides that were being sold to try to commit fraud in our platform. Meanwhile you will still have a false pos…

The average person has no idea how industrialized fraud has become. There are essentially entire companies with management, support staff, IT, and office buildings whose business is fraud. It is sad when you think about how many resources have been poured into it.

Re: A failure of security systems at PayPal is causing concern for German banks

#74

Post by rcbdev »

dcow wrote: post #65
raincole wrote: post #59

Earlier quoted context omitted.

Yeah. I had always thought these AML/KYC stuff were just governments/people in power expanding their arms into normal people's lives. I still think they mostly are, but after learning how much fraud is happening, I'm not sure what a better solution would look like.

Strong digital credentialing—something the web has been surprisingly allergic to.

If you actually stop and consider the culture and ethos surrounding the advent and spreading of the Internet, it's not surprising at all.

Re: A failure of security systems at PayPal is causing concern for German banks

#75

Post by tpurves »

Arbitraging fraud has always been PayPal's game. For the mass market of small-scale sellers there's a threshold, whre the cost of onboarding, verifying, underwriting and eating fraud exposure is greater than the revenues you could ever expect to make from them at their low volume. So these segments went un-served, same with many other segments of transactions or transactors. PayPal's model has always been to accept a higher risk tolerance, then to have just-enough compensating controls and/or liability-dodging to make that work. At least just well enough to have net-revenues bps exceed their fraud-loss bps.

And when that balance is working, it kinda works, but when it doesn't...

And incidentally, it's not just PayPal with the fraud problems these days. It's everybody in the banking and payments space. AI is so far quite asymmetrically helping the bad guys more. It's bad out there.

Re: A failure of security systems at PayPal is causing concern for German banks

#76

Post by tnolet »

pbmonster wrote: post #66
fweimer wrote: post #11

Earlier quoted context omitted.

The existing giro system is the real Paypal competitor. Most Europeans had access to Paypal-style money transfers before they had email. Merchants probably want to rely on another party to maintain their integration, but there is no real need for another centralized service similar to Paypal. (The U.S. really is an outlier among developed nations in that its giro system is not widely used, and many residents would no…

> The existing giro system is the real Paypal competitor. Most Europeans had access to Paypal-style money transfers before they had email. Not at all, not even close! In most cases, that's wrong even today. Want to sell something online? A book you wrote, a game you made? There's no way for people to pay you via giro and automatically receiving the good on the page where the payment process was initiated. Giro is not…

ideal will handle that. But it’s only in NL.

Re: A failure of security systems at PayPal is causing concern for German banks

#77

Post by tgsovlerkhgsel »

n1b0m wrote: post #16
hirako2000 wrote: post #6

What's so specific to German banks ?

PayPal is the most important online payment service in the German market, with nearly 30% of online purchases made using the platform. The sheer volume of PayPal and direct debit transactions in Germany magnified the impact of the outage compared to other markets. With millions of potentially fraudulent debit requests appearing simultaneously, German banks chose to freeze all incoming PayPal direct debit payments. Th…

Also protect themselves (or rather, PayPal's bank). These were almost certainly SEPA debits. Consumers could reverse unauthorized transactions (think "chargeback" but on steroids - customer says to revert, it gets reverted, no discussion) and their bank would then have to try to get the money from PayPal's bank, which would then have to get it back from PayPal.

Re: A failure of security systems at PayPal is causing concern for German banks

#78

Post by jacquesm »

rcbdev wrote: post #74
dcow wrote: post #65

Earlier quoted context omitted.

Strong digital credentialing—something the web has been surprisingly allergic to.

If you actually stop and consider the culture and ethos surrounding the advent and spreading of the Internet, it's not surprising at all.

And if you stop and consider how corporations have been abusing that sort of thing every chance they got it is even less surprising.

Re: A failure of security systems at PayPal is causing concern for German banks

#79

Post by dev_l1x_be »

tpurves wrote: post #75

Arbitraging fraud has always been PayPal's game. For the mass market of small-scale sellers there's a threshold, whre the cost of onboarding, verifying, underwriting and eating fraud exposure is greater than the revenues you could ever expect to make from them at their low volume. So these segments went un-served, same with many other segments of transactions or transactors. PayPal's model has always been to accept a…

Ebay and Paypal are full of scam. Simply it is thei best interest to keep this up because it generates revenue for them.
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