Tag: PayPal

Google close to Paypal cloud coup

Posted on August 31, 2016 by - News

PAY-Lion-King-cloud-MAINGoogle is pushing into cloud computing and could be about to score PayPal as a key client.

PayPal is evaluating the other leading providers and hasn’t made any final decisions, but what is worrying for Microsoft and Amazon is that it has put Google into the running.

PayPal has some existing business with AWS, namely its Braintree and Venmo products, which the company acquired in 2013. In moving infrastructure to the cloud, big companies often start with test and development workloads before touching critical customer information, and that’s likely where PayPal will begin.

But cloud services would open up new technical capabilities that are difficult inside their existing infrastructure. If there are big shopping days, Paypal could obtain some servers on the fly.

There is a lot at stake, Google wants to prove that it’s a legitimate player in the rapidly expanding cloud infrastructure market and to do that it has to kick the leaders Amazon Web Services and Microsoft firmly in the nadgers.

Google has also been allocating cash to its cloud technology as well as the sales, marketing and support needed to meet enterprise standards.

But it looks like this particular battle will be settled by cost. AWS has dropped the price of a storage product by 47 percent, the 52nd time Amazon has slashed prices.

Google may use its cash mountain to start a pricing war which is an area where Amazon would not be keen to go.  Microsoft might be able to use its own cash reserves to take on the rival.

But technically Google needs to match or beat AWS in terms of speed and reliability while also winning on price against a company that’s grown up thriving on razor-thin e-commerce margins. It has a long way to go before it can give AWS a run for its money. AWS generated sales of $2.9 billion in the second quarter, almost six times the amount Google makes in an entire year, based on RBC’s estimates.

However, there are signs that things are getting better. At the beginning of the month the Synergy Research Group claimed that Google’s cloud revenue surged 162 percent in the second quarter from a year earlier. The company still only commands 5 percent of the market, but it is growing fast.

It has also poached some good clients including Snapchat, Spotify, Home Depot and Walt Disney. Getting PayPal would represent another feather in its cap.

Paypal dumps cloud supplier for not spying

Posted on June 22, 2016 by - News

paypal-logoGermany’s Seafile cloud suppler  claims it was forced to stop using PayPal because it refused the payment company’s illegal demands to spy on its users’ data.

Seafile is a Dropbox rival and it told its customers that they would no longer be able to pay for the service using PayPal—the only payment method that the company had in place.

CEO Silja Jackson said the outfit was looking into alternative payment services, but currently it was running a cloud service and not being paid.

Seafile was founded in 2009 by students at Tsinghua University in Beijing, and has gained enough traction in Germany to form a subsidiary there. It offers an open-source file-synchronization system that organisations can install on their own servers—for a fee, if they want enterprise features—and last October the firm decided to also start offering a paid version that’s hosted on Seafile’s German servers, for individuals and small businesses.

Jackson said PayPal contacted Seafile in early June with a questionnaire about its service, and by posting a notice on Seafile’s PayPal account to say it was violating an unspecified part of PayPal’s terms of use.

Jackson thought that PayPal classified Seafile as a service for illegal file sharing. She told them that since it did not offer free accounts and that customers needed to disclose their address when signing up.

PayPal then demanded that Seafile monitor its customers’ data traffic and files for illegal content, and send the payment firm detailed statistics about the types of files synchronised over the service.

Jackson said that would violate privacy laws as giving PayPal statistical information would violate customers’ privacy rights.”

Legal experts have confirmed that had Seafile done as it was told it would have been taken to the cleaners under EU and German privacy laws. When Jackson told PayPal that Seafile was being required to break EU privacy laws, the outfit dropped them like a hot potato.

Paypal fined for aiding arm sellers

Posted on March 27, 2015 by - News

Cover1-600x400PayPal has reached a $7.7 million settlement with the US Treasury for ignoring US sanctions and allowing money transfers to accounts linked to Iran, Cuba, terrorism and weapons of mass destruction.

According to DCIno, The Treasury Department’s Office of Foreign Assets Control (OFAC) detailed a damning string of instances in which the company accepted and processed 486 transactions totalling approximately $43,934 over a five-year period.

“PayPal’s management demonstrated reckless disregard for US economic sanctions requirements in deciding to operate a payment system without implementing appropriate controls,” the Treasury Department said in a statement.

PayPal allowed a bloke called Kursad Zafer Cire, who was named by the US State Department in 2009 as an associate of Abdul Qadeer Khan, the Pakistani scientist who provided nuclear know-how to Iran, Libya and North Korea.

Cire’s name was added to the Treasury Department’s list of “specially designated nationals” who have been specifically named as being under sanctions by the US for their involvement in terrorism, programmes involving weapons of mass destruction, drug cartels or other major illicit activities.

Between October 2009 and April 2013, PayPal processed 136 transactions totaling $7,091 to or from an account registered in his name.

First, PayPal failed to identify the account as being related to a specially designated national, but later in 2009 the account was flagged five times. Each time PayPal risk operations agents dismissed the alerts without requesting additional information to clarify whether the account did indeed belong to someone under sanctions.

In 2013, PayPal requested additional information from its customer, and received a copy of his passport. The name, birth date and place of birth exactly matched the person listed on the specially designated nationals list, but PayPal again approved the transfer.

It wasn’t until it was flagged for the seventh time, on April 3, 2013, that the account was blocked and reported to the Treasury Department.

PayPal allowed transactions to proceed although they contained specific references to countries under sanction, such as “Iran,” “Cuba,” “Tehran,” “Khartoum” or “Sudan.”

PayPal brought new management into its compliance division in 2011 to strengthen its controls, which also counted as a mitigating factor.

The company said that over the last two years it has built a new payment scanning system that allows for “real-time scanning of potentially sanctioned payments before they are processed.”

 

Samsung starts mobile payments

Posted on February 19, 2015 by - News

Samsung advertising in TaipeiSamsung has bought US mobile wallet startup LoopPay, which is seen as an  intention to launch a smartphone payments service.

Mobile payments have been slow to catch on in the United States and elsewhere, despite strong backing. Apple, Google, and eBay PayPal have all launched services to allow users to pay in stores via smartphones and the stores themselves are expected to release a new standard of their own.

Most of the problem is that retailers have been reluctant to adopt the hardware and software infrastructure required for these new mobile payment options to work before a standard is sorted out.  There was no point in investing in BetaMax when VHS kills it.

LoopPay’s technology differs because it works off existing magnetic stripe card readers at checkout, changing them into contactless receivers, they said. About 90 percent of checkout counters already support magnetic swiping.

“If you can’t solve the problem of merchant acceptance…, of being able to use the vast majority of your cards, then it can’t really be your wallet,” said David Eun, head of Samsung’s Global Innovation Center.

Injong Rhee, who is leading Samsung’s as-yet-unannounced payments project, said the Asian giant will soon reveal more details of its envisioned service. He would not be drawn on speculation the company may do so during the Mobile World Congress in Barcelona.

He said new phones such as the new Galaxy would support the service.

Samsung had invested in LoopPay, along with Visa and Synchrony Financial, before its acquisition.

Rhee said in an interview that the company intends to roll out accompanying services that go beyond merely turning the smartphone into a wallet, such as by allowing users access to information such as spending.

Paypal boss cashes in his chips

Posted on February 5, 2015 by - News

paypal-logoPaypal executive Don Kingsborough, who helped get the outfit to move into physical retail stores, stepped down in January.

Kingsborough was instrumental in PayPal’s attempts to push innovations such as in-store ordering and pickup and physical-checkout payment at chains.

His exit comes as the company competes with the likes of fast-growing startup Square to get its payments system adopted in more retail chains across the United States.

The company increasingly has had to contend with rivals such as Square, which is popular with smaller businesses, and the Tame Apple Press thinks that it will have to surrender ground to Apple Pay, even if take up from that is proving sluggish.

The thought is that Paypal is slowing. eBay said it enjoys “a strong foothold in offline retail,” but analysts say it has been difficult for the tech companies vying for checkout space to contend with the simple convenience of debit or credit cards.

No one is saying why Kingsborough is leaving.  It seems that he might have been frustrated that he could not so as much as he wanted.

One quote attributed to him was “!I think we were able to move the needle, but I have to say I leave a little frustrated in that I wish we as an executive team would have done more.”

eBay is also preparing to lay off some seven percent of its workforce, or 2,400 jobs, including PayPal employees, before the two companies split in the second half of 2015.

Ebay does deal with Icahn

Posted on January 22, 2015 by - News

Faustian_BargainOnline auction outfit Ebay has done a deal with its activist investor Carl Icahn that will give investors a greater say in its PayPal payments unit once it is spun off.

Ebay said it exploring a sale or public offering of its enterprise unit.

The deal clears the way for a future buy  of eBay and PayPal by companies looking to gain a foothold in the e-commerce and online payments markets. Alibaba, Google and Amazon could all be interested.

Meanwhile Ebay is going to cut its workforce by seven percent, or 2,400 jobs, in the current quarter. While the company is making a pile of money, its outlook for the 2015 first quarter and full year fell short of what the cocaine nose jobs of Wall Street expected, so its workers will have to pay the price.

The planned job cuts will be across the board in all parts of the company except the board. Payments and enterprise divisions will be hit, eBay said. Restructuring and separation costs are expected to be between $210 million and $240 million in the first quarter and $350 million to $400 million for the entire year.

Also under the deal with Ichan, Icahn Capital executive Jonathan Christodoro was named to eBay’s board. He will have the ability to transition to PayPal’s board once the spin-off occurs.

Two Wall Street bankers has been added to its board, because you always need a board full of bankers.

PayPal agreed to adopt a number of measures proposed by Icahn, which the billionaire said enhance corporate governance at the fast-growing payments arm. The provisions are intended to give shareholders a larger voice in important decisions, particularly an acquisition bid.

They include a provision that any “poison pill” designed to ward off acquisition attempts be ratified by stockholders or expire after 135 days, and that holders of 20 percent of its shares be allowed to call a special meeting of stakeholders.

EBay plans to split its marketplace division from PayPal in the second half of this year. PayPal will be a standalone publicly traded company, which some analysts say will be worth $40 billion.

 

Ebay boss will get $23 million golden handshake

Posted on December 19, 2014 by - News

Scrooge-Porpoise EBay Chief Executive John Donahoe will get an exit package worth an estimated $23 million after the company splits from payments unit PayPal next year.

Chief Financial Officer Bob Swan will get an exit package worth about $12 million. The figures could change depending on the performance of eBay’s share price.

That is good money considering that they do not really have to do much work to collect the cash other than just leave. After eBay announced its planned split with Paypal both of them said that they would be clearing out their offices.

To be fair, involvement with a much smaller company would be beneath them and EBay and Paypal would need CEO’s and accountants who were a little lower down the IT Industry food chain.

eBay spokeswoman Amanda Miller said in a statement that Donahoe’s transition package is closely tied to the performance of the company during the separation period and the company’s stock price at the time of separation

The terms were approved by eBay’s board on December 15. Other executives may also step down after the company splits its marketplace division from PayPal. Those other executives who leave will get benefits including a cash payment equivalent to 1.5 times their annual base salary, the filing said.

It is a Luddite world, claims PayPal co-founder

Posted on October 9, 2014 by - News

LudditePeter Thiel, a co-founder of PayPal, said that we live in a world where science is hated and real technological progress has stalled.

Thiel told the Gartner Symposium/IT this week that there is little innovation out there and he blames the fact that we are living in a financial, capitalistic age.

He said that this is a period in history when  people generally dislike science and technology. Movies “all show technology that doesn’t work, that … kills people, that it is bad for the world.”

Terminator, The Matrix, Avatar, Elysium and Gravity. The message of Gravity is that “you never want to go into outer space”. The movie industry is reflecting and feeding a public bias against science, he said.

Thiel added that technology has a much different meaning today than it did in the 1950s or 1960s. During that period, it meant computers and rockets, underwater cities, new forms of energy and all sorts of supersonic airplanes. Since then, there “has been this narrowing” view that technology is mostly information technology, he said.

While advances today may be enough to dramatically improve business efficiencies and create great new companies, “it’s not clear it’s always enough to take our civilization to the next level,” said Thiel.

Thiel thinks that there is a lack of any conviction. If you have conviction around getting certain things done, a very short list of things, that’s how you really push for progress,” whether in a corporation or government.

He said that the Manhattan project, which built a nuclear bomb in 3.5 years, and led to the moon landing in the 1960s was a complex coordination around a well-defined plan, which is very out of fashion.

Birt gets hosting job

Posted on December 2, 2013 by - News

BBC HQHost Europe Group said it has appointed Lord Birt of the BBC as its non-executive chairman.

Birt said that Host Europe, which has over a million customers, and offers cloud hosting  and managed hosting, is in a good position to act fast to the needs of its customers. “I am honoured to be invited to join such an industry leading team.”

Euro private equity firm Cinven bought the Group in July and wants to grow it to be the number one in Europe.  It has already bought two companies, Telefonica Germany Online Service and domainFactory.

Birt was the director general of the BBC between 1992 and 2000, and has held a number of other positions including chairman of Paypal Europe.

He is a cross bencher in the House of Lords.

Cinven partner David Barker said that his appointment chimes with rapid growth in the European hosting market. Barker claimed the Group is in a strong position to capitalise on the growth.

Mobile payments explosion might be a damp squib

Posted on July 12, 2013 by - News

google-walletFor months now we’ve been reading very optimistic reports on the future of mobile payments and m-commerce, but one outfit is apparently looking beyond the hype. Research firm eMarketer has slashed its growth estimate for proximity mobile payments in half.

Last October eMarketer forecasted that mobile payments would hit $2.13 billion this year, but in its latest note it puts the figure at $1 billion. Although the number of mobile transactions has more than tripled over the past two years, growth is apparently slowing down, plagued by a multitude of issues.

The firm pointed out that delays and adoption issues are hampering growth. The fact that there are already several competing platforms isn’t helping, either. However, it is still looking good in the long run. By 2016 mobile transactions should hit 2016, roughly a year behind the previous eMarketer schedule. Just a year later, in 2017, mobile payments should hit $58 billion.

Aside from the usual hardware teething problems, mobile payment outfits need to address security concerns and streamline the process itself. At the moment, the user experience still involves too much friction, according to PayPal CTO James Barrese. The ultimate goal is to come up with a one-touch payment scheme that would be a lot simpler and quicker than the good old card swipe. That probably won’t come about soon, and maintaining a level of security deemed acceptable by consumers might be very challenging.

In addition, the fact that there are several players vying for their slice of the pie, using their own systems and infrastructure, means that there is plenty of room for consolidation, reckons Venture Beat. However, big players aren’t very open to consolidation, or even cooperation, hence it is very unlikely that a single platform can break out of the pack and transform itself into an industry standard.

Mobile wallet market worth billions by 2018

Posted on July 1, 2013 by - News, Products

google-walletThe mobile wallet market is about to get big, huge even. According to a new report published by Transparency Market Research, the global mobile wallet market will reach $1,602.4 billion by 2018. In EMEA it will grow at a CAGR of 30.7 percent from 2012 to 2018 and EMEA will be the largest mobile wallet market in the world by 2018.

EMEA accounted for about 40 percent of the global mobile wallet share in 2011, but the Asia Pacific region is expected to see the fastest growth over the next five years.

The staggering figures sound optimistic to say the least, but Transparency Market Research is basing them on a few emerging trends that hold a lot of promise. The outfit found that affordable NFC enabled phones and POS (point of sale) systems will be the main drivers of growth over the next few years.

Retail is currently the biggest application for mobile wallet services and the trend is set to continue, due to ease of payment using smartphones and initiatives to introduce new POS terminals in convenience stores. Vending machines are also a potent market. Mobile network operators are expected to play a pivotal role in future mobile wallet adoption.

Unsurprisingly, the key players in the market will be Visa, MasterCard, American Express, PayPal, Google and others from the list of usual suspects.

However, it won’t be just smooth sailing. Quite a few consumers still don’t know how mobile wallets actually work and we’re pretty sure that many aren’t even aware of their existence. Security and privacy remain sources of concern, too.

eBay gets ever so bullish

Posted on March 29, 2013 by - News

smartphone-shoppingeBay has driven up its share value after making bold forecasting claims.

In its forecast of annual earnings the net giant said it would push for an earnings growth  of 15 percent to 19 percent over the next three years.

Speaking to investors yesterday the company’s head honchos said this was mean a projected revenue of $21.5 billion to $23.5 billion in 2015, compared to $14 billion in 2012.

They said this would be made possible through the company’s global expansion as well as drilling down focus in local commerce areas.

They added that the company would also embrace the mobile trends more fully.

And there was a good news for the company’s marketplaces business, which hosts external merchants will bring in around $110 billion in sales in 2015, a huge jump from the $75 billion in 2012.

The bold claims have now seen its shares rise by more than four percent, a feat which is sure to impress shareholders and show that chief executive John Donahoe, who joined the company in 2009, has fulfilled part of his promise to get the company back on track after it fell on the wayside amidst strong competition from Amazon.

Industry thinks digi-wallets and NFC are overhyped

Posted on March 12, 2013 by - News, Opinions

google-walletThe payments industry is slowly starting to adopt new mobile payments technologies, but industry leaders believe that the digital wallet concept is overhyped, along with NFC.

The Payments Innovation Jury, an anonymous group of 25 industry leaders gathered in a hollowed out volcano, reckons the next wave of e-payment innovation will come from Asia rather than Europe.

The secretive Payment Innovation Jury features members from 14 different countries whose names are kept private, so they can speak freely. Most members are or have been high level execs in companies such as MasterCard, PayPal and Visa, reports Venture Beat. 

In their latest report, the jury concluded that NFC and digital wallets are overhyped, and we tend to agree. Most members don’t believe NFC will live up to its hype and many reckon there is no demonstrable need for contactless payments from consumers. However, it is worth noting that NFC has plenty of applications other than mobile payments. More than half of the group believe digital wallets will replace credit and debit card payments, but a sizable number don’t agree.

“The Jury offered their views on which payments innovation has the greatest hype rating and therefore the biggest risk that the business case will not be achieved,” the report said. “Hype is particularly prevalent in payments, with many organizations trying very hard to talk up their chosen innovation in order to achieve the necessary critical mass.”

In other words it is beast to tread carefully, just in case. Many outfits are indeed trying to talk up their solutions, but we are still a long way from widespread adoption and standardization. One jury member argued that progress in Europe is hampered by standardization initiatives such as SEPA, but a lot of innovation is expected from Asia and Africa.

Interestingly, the group found that cross-border remittance services have a lot of potential. Sending money abroad via mobile payment solutions could be the most profitable niche over the next five years. It is a rather big market. Plenty of countries in Eastern Europe, North Africa and practically the entire third world have sizable expat communities who send money back home on a regular basis.

PayPal launches iOS SDK

Posted on March 11, 2013 by - News

paypal-logoPayPal has released a new SDK for Apple’s iOS platform and the new kit is expected to speed up development, open up a host of new possibilities and make life easier for developers.

At the moment, iOS apps using PayPal have to redirect traffic to web based gateway systems, making the whole process more complicated, time consuming and slower. However, the new SDK should help integrate services in apps themselves, greatly reducing developers’ workloads.

PayPal CTO James Barrese hopes the new SDK will give developers more freedom to focus on innovating rather than handling the complex task of sorting out mobile payments.

“We listened when our developers said they wanted better capabilities from us, and now we’re doubling down on our developer programs to deliver the best tools in the industry,” he said.

Since the PayPal payment service will not be integrated into apps, consumer will be able to complete their transactions without leaving the app, greatly streamlining the process. PayPal also released a new API that should enable developers to integrate a clever card digitization feature. The new approach will let users simply take a picture of their cards, letting the app scoop up all the details from the photo, which is much easier than typing them in.

Best of all, PayPal claims its new Java Script PayPal button can be integrated into apps with just five lines of code, which is roughly a fortnight in developer parlance.

Heavyweights hug mobile payments, but more work ahead

Posted on March 1, 2013 by - News, Opinions

google-walletA series of optimistic reports and forecasts on e-commerce seems to indicate that mobile payments are becoming increasingly commonplace and that we could soon ditch our trusty leather wallets in favour of smartphones. Sadly though, we won’t, at least not anytime soon.

The trend is positive and we are seeing a lot of growth, especially in m-commerce. In addition, a number of big players have made significant announcements in recent months. Last week Visa expanded its Visa Ready Partner Programme in an effort to get more vendors, developers and retailers on board. Samsung followed up with a service of its own, the Samsung Wallet, which bears more than a passing resemblance to Apple’s Passbook app. Samsung already managed to attract several partners for its new service, including Visa.

Then there is MasterCard’s MasterPass service, which allows retailers come up with their own applications and services, based on MasterCard’s infrastructure. PayPal is no newcomer to the market, but its PayPal Here service is. Launched in the US last year, it finally found its way across the pond to European shores. It offers a comprehensive solution, with a hardware dongle and cross-platform app support, and it allows users to pay using credit cards, cash, PayPall wallet or checks.

What about the elephant in the room? Well, there’s actually two elephants. Google Wallet has been around for quite a while, but it failed to take off. It was supposed to demonstrate NFC capabilities on Nexus gear, dating back to the Nexus S, which it did. However, much like NFC, Google Wallet never made much of a name for itself.

It might have something to do with the second elephant, Apple, as it never embraced NFC technology and it is still unclear whether the next iPhone will feature it. Apple has not made much noise on the mobile payment front, which doesn’t mean it is not looking into it. To the contrary, Apple has already filed several patents for NFC enabled devices and services. Cupertino doesn’t like spilling the beans on upcoming products and services, and unlike some companies, it tends to have excellent execution. It is also worth noting that Apple bought AuthenTec, a maker of fingerprint sensors and security solutions, for $356 million last year.

With all that in mind, nobody should be surprised by soaring m-commerce and mobile payments statistics. In fact, we should be seeing even more services, from brick and mortar shops to pubs, but we aren’t. Mobile payments and are still geeky turf, with little traction among mainstream consumers. The sheer lack of widespread support for m-commerce platforms and the fast pace of development means that many consumers don’t even know it exists. What’s more, many of those that do still have some reservations.

Privacy and security are valid concerns, but a recent survey by Intela revealed that the majority of smartphone users in the UK now feel comfortable with mobile payments. It is hardly surprising, as most smartphone users have grown accustomed to making micro transactions in app stores or through in-app payments. The difference between spending a few pence on an app and a few pounds in a retail shop is philosophical and not technical in nature. In fact, it appears that humble micro transactions have already done more for m-commerce confidence than all the fancy services rolled out by credit card companies and tech outfits.

In spite of that, smartphones will not replace wallets, at least not entirely and certainly not anytime soon. Cash can’t be hacked, it can’t be rendered useless by a flat battery or a few drops of lager. In some cases it is just more practical. The same pretty much goes for credit cards. Smartphones have their own set of advantages. Motorway tolls, public transportation, congestion charges and parking based on GPS information are some that come to mind. Phones are an excellent payment platform, but they will complement cash and cards, not replace them.