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

http://news.cnet.com/8301-1023_3-57615080-93/paypal-president-david-marcus-bitcoin-is-good-nfc-is-bad/

by a3voices • 13 years ago

53 64 13 years ago

news.cnet.com

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• 13 years 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• 13 years ago

My Android phone unlocks with two taps, iPhones nowadays unlock with a fingerprint swipe.

JimmaDaRustla5• 13 years 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.

brownbat• 13 years 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.

JimmaDaRustla5• 13 years 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.

VLM2• 13 years ago

"a reality that people don't want to go to a payment terminal at all"

I had to read that section about three times because I interpreted that as "amazon app, box arrives on doorstep in two days, cheaper than in store (store aka showroom)"

That's pretty much how I shop now. Going out and paying more is already an inconvenience, waving something around, or not, is already a rounding error of the total sum of inconvenience.

btbuildem• 13 years ago

Or, you know, BTC transactions via NFC..

mrb• 13 years 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• 13 years 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.

skloubkov2• 13 years ago

Would be cool to be able to tap to pay instead of scan to pay.

calpaterson• 13 years 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.

canistr2• 13 years 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• 13 years 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 [2]: http://www.bbc.co.uk/news/business-18265388

bnastic• 13 years 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.

VLM2• 13 years 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.

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.

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!

swombat• 13 years 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• 13 years 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.

hdevalence• 13 years ago

Speak for yourself, I have an NFC debit card and it's quite convenient, and has none of these problems.

nwh• 13 years ago

I've been using NFC for years now, and I've never once had a charge or fee for the privilege.

jrockway• 13 years 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.

icebraining2• 13 years ago

I think VLM's talking about phone payments through NFC, not NFC cards.

trekky17003• 13 years ago

In Canada, NFC is pretty much everywhere and I have never, nor have I heard of anyone making a mistake. I use it as often as possible because of how fast and convenient it is, much better than chips and pins or the really old signature methods.

Nursie4• 13 years ago

Do you commonly mix up swipe and chip cards too?

Plus NFC is only for small amounts (usually) so the snow-blower thing is pure nonsense.

dcc1• 13 years 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• 13 years 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• 13 years 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.

rthomas64• 13 years 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?

Nursie4• 13 years ago

Why would ebay switch away from Paypal? ebay own paypal!

etanazir• 13 years ago

Why not use 'litecoins' or create their own virtual cryptocurrency? That is the achilles heel to bitcoin - bitcoin 2.0 an infinitum.

cs702• 13 years 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/

gasull• 13 years 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• 13 years ago

Really? For your savings? Bitcoin is many things, but a low-risk investment is not one of them.

bonemachine• 13 years ago

Wow.

Been working on a pure-BTC retirement portfolio fund that I'd luuuv to sell you. Step right up...

chalst• 13 years 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.

canistr2• 13 years ago

David Marcus basically wants the IBM RFID payment solution:

https://www.youtube.com/watch?v=eob532iEpqk

wellboy• 13 years ago

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

dingaling• 13 years 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• 13 years ago

Quite ironic.

skloubkov2• 13 years 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.

trekky17003• 13 years 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• 13 years ago

Care to elaborate on how it's faster and more convenient than swiping?

MAGZine• 13 years 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.

trekky17003• 13 years 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• 13 years 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.

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

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