When I last covered payment service provider Payoneer, the company had announced the collection of $3 million more in funding and the addition of iStockPhoto to its client roster. Today, the company is announcing the initial rollout of “Payoneer Virtual US Account,” a new offering that simplifies payment cash out for international payees.
The new offering allows Payoneer card holders that live outside the US to receive direct Automated Clearing House (ACH) deposits/payments without the necessity of actually having a US bank account.
Here’s how it works: Payoneer maintains a bulk of sub-accounts under its main account, which is held in an American bank. When an ACH transfer is initiated, each of these sub-accounts is referenced using its own routing and account numbers. When the funds are credited to one of these sub-accounts, Payoneer loads the funds to the associated card.
Contrary to their name, these accounts are not virtual at all. Payoneer’s thinking here is to call them virtual accounts because they only serve as channels for loading money onto their cards. The accounts cannot be used for wire transfers, they don’t bear interest, etc. I may be splitting hairs, but the name could be a bit snazzier.
The Payoneer Virtual US Account might not seem all that exciting to some, but I assure you, this is a huge deal if you are an international payee. Take the following scenario as a case-in-point:
Let’s say you’re an affiliate marketer living in Russia and you’ve just had your monthly commission deposited to your PayPal account. With Payoneer, it works like this now: you can perform an ACH transfer directly from your PayPal account to your Payoneer Virtual US Account. The funds will be immediately available on your Payoneer Debit MasterCard balance, ready for cash withdrawal from an ATM in Moscow, or available for charge at any MasterCard point-of-sale station (department stores, supermarkets, etc.).
Payoneer’s Virtual US Account program is still in pilot mode and only available to a select group of cardholders, for whom Payoneer can accurately verify the source and destination of funds.
While the program is clearly valuable to international payees, things are a bit stickier with the PayPals, LinkShares and iStockPhotos of the world whose “blessing” is necessary for the program to take off. The crux of their concern is a fear of issues related to money laundering compliance. They would prefer to avoid the matter completely rather than risk getting themselves into hot water. Their “blessing” is necessary because they may already (or can easily in the future) update their terms and conditions to stipulate that ACH transfer to payees from certain countries are barred.
The fact that Payoneer’s systems and methodologies are designed to deal head-on with international compliance issues should help it on this front. If Payoneer has been given the green-light to broaden its offering to include Virtual US Accounts, it has probably handled compliance issues to the satisfaction of its bank, which must have kept a particularly close eye on it from day one.
Many, if not most, Internet startups focus on the American market and its users. Often times this leaves international users without the access to products and services that US users find common-place. So it’s good to see a company like Payoneer simplify payments and cash outs for international payees. It might not be easy, but the rewards could be substantial.
Barrons is all breathless about Amazon getting ready to step up its game in the payments arena. Eric Savits writes:
Cantor Fitzgerald analyst Derek Brown asserts in a research note this afternoon that Amazon “may soon launch a PayPal-esque Payments service for use by consumers and merchants across the Web, potentially siphoning growth and/or profit from eBay’s crown jewel.” Brown says that Amazon could launch such a service as soon as late summer or early fall of this year.
But wait. Amazon already competes with eBay’s PayPal. It’s called Amazon Payments and it lets you:
—send money to anyone’s email address or mobile phone.
—make online purchases at other participating Websites
—buy Amazon products using your mobile phone.
It launched the current version of Amazon Payments last year. Also, last year Amazon launched its Flexible Payment Service as a Web service in limited beta so that developers could integrate Amazon’s checkout into their own sites (customers use their Amazon login, and the Website gets paid by Amazon, after a fee).
The article notes that both of these services exist, but does not explain how Amazon could go beyond their current offerings. So it is not exactly clear what further steps Amazon will take to beef up its current Amazon Payments service into a full-fledged competitor to PayPal. In terms of functionality, it is already pretty close. It even looks the same as PayPal. (Click on screen shot above).
Even if it does push the service harder, Amazon won’t find it easy to displace PayPal, which is deeply entrenched as one of the preferred payment mechanisms on the Web. But competition does keep everyone honest. So good luck to Amazon.
Developers who are building apps that use PayPal to handle payments usually require the application to send a request to the PayPal service. The URL’s used in these requests are all on the paypal.com domain name, and there is a test environment setup on a URL at www.sandbox.paypal.com. In Google App Engine apps, requests to either of these URL’s returns a generic ‘download’ error with no specific details.
A number of developers complained in a Google App Engine forum discussing the issue (also on Hacker News), where they also found a way to bypass the restriction by using a third-party proxy (like TinyURL). Then, early this morning, a Google employee named Marzia Niccolai wrote a comment, saying that the error was caused by their anti-phishing protections:
Thanks for the report! This is a bug, and we have located the problem. There was an error in our anti-phishing protections that was blocking some specific URL domains from being fetched using the URLFetch service. This was an oversight on our part, and these specific domain restrictions will be removed in the next few days.
Normally something like this wouldn’t raise too many eyebrows. But there’s too much bad blood between Google and eBay not to question this, and Google’s anti-phishing blacklist does not, of course, list the paypal.com domain as a phishing site.
Most developers who have commented on this so far strongly believe that this was a deliberate block by Google. So far, we can only take Google at their word that blocking Paypal was an accident because of the way their anti-phishing rules work. But with so many phishing sites involving Paypal, you would think that when implementing their rules they would at least check that the real Paypal site still works. Besides, the Google.com phishing test shows that Paypal is considered a safe site.
Why would it be different for App Engine? To make things more suspicious, that phishing test tool was launched last month.
We have emailed Google for a comment and will be updating this post as news comes in.
Update: In the post we mentioned that some developers were using a third-party server and/or domain to proxy requests to PayPal. It turns out that even those proxy requests no longer work (they did at some point), leaving one of the developers on that thread to conclude ‘I guess they are blocking PayPal at their (Google’s) gateway..’.
Ebay Australia currently allows merchants to accept credit cards, direct debit, money orders and checks for purchases, but from June 17 they want to allow only PayPal or cash on delivery. When the Australian Competition & Consumer Commission (ACCC) asked for public comments on the proposal a lot of of people responded. But an anonymous 38 page document that is highly critical of Ebay’s move was submitted on May 26, leading to speculation on who the author might be.
It turns out, the title of the document, hidden in the PDF metadata, gave a very good clue “Microsoft Word - 204481916_1_ACCC Submission by Google re eBay Public _2_.DOC.” An Australian named David Bromage first discovered it.
The document is still available on the ACCC’s website (and is embedded below), with the title stripped out. But the Australian newspapers are all over this now.
Google’s competing product to eBay, Google Checkout, is only available to merchants in the US and UK, so they don’t directly compete yet with PayPal in the Australian market. Apparently, that hasn’t stopped them from trying to keep their options there open.
In the document, Google says Ebay’s actions are anti-competitive, that the public benefits claimed by Ebay are “illusory” and that the proposal will result in significant public detriment. They also request that the ACCC ban Ebay from the action under the Australian Trade Practices Act.
Will eBay retaliate? Last year they temporarily pulled all Ebay advertising on Google after they announced a Google Checkout party at an Ebay event. If they get that mad over a party, I can’t imagine how they’ll respond to this 38 page treatise on the evils of PayPal.
The full document is below. And in other news, PayPal was finally able to fix that drop down menu bug that plagued users for over ten days and was ignored until the press and blogs started to pay attention.
Sometime around May 16 a bug appeared in PayPal’s subscription payments page that stops people from paying if they live in a different country than the site collecting the money. The original complaint and discussion about it are here. More discussion here.
We’ve been hearing about it for a few days now, but bugs generally aren’t big news and we don’t cover them except in unusual circumstances.
Here’s what makes this different - it’s been going on for nearly ten days now, and the bug appears to be nothing more than a small issue with a drop down menu (see video above). A couple of days ago PayPal took the time to note the bug, but still no fix. People are starting to get really angry about it.
It appears that they simply aren’t storing the value of the country when a user changes it, a very simple thing to change, perhaps a single line of code. In fact, it probably took them longer to write the blog post noting the bug than it would have taken to simply fix it. The most likely explanation for the ridiculous amount of time it has taken to fix it: it’s probably stuck in a bug queue, and has to wait its turn. Meanwhile, PayPal merchants are losing money.
One merchant comment sort of says it all:
It’s staggering that PayPal has not fixed this most basic payment issue immediately. I contacted support when I received the first customer complaint about five days ago and PayPal support already knew about the error but could not provide an estimated time to fix it. Clearly PayPal cannot be relied upon to provide a stable payments system.
eBay through Paypal has acquired fraud detection provider Fraud Sciences Ltd for $169 million.
Israel and Palo Alto based Fraud Sciences offers automated anti-fraud systems including SpotLight VFX and SpotLight T2T, merchant solutions the provide transaction verification with fraud prevention. In an October 2007 profile, Israelplug said that Fraud Sciences products “help online retailers verify the identity of buyers and accept orders that they would have seen as suspicious in the past - thus enabling them to increase their sales.”
eBay said the acquisition will assist them in significantly improving trust and safety across its sites in 2008. Fraud Sciences’ risk tools will be integrated with PayPal’s fraud management system.
Personnel from Fraud Sciences, including Yossi Barak, Fraud Sciences’ COO, and founders Shvat Shaked and Saar Wilf, will join PayPal’s technology and fraud management teams.
This acquisition is expected to be completed within 30 days.
Paypal has suspended an account belonging to a Ron Paul supporters group resulting in the groups inability to pay for a recount in New Hampshire.
The Granny Warriors had fund raised the $55,600 required to be lodged with the New Hampshire Secretary of State yesterday but had their account suspended by Paypal at the last minute. The inability to access the funds resulted in a missed deadline and no GOP recount in New Hampshire.
Ron Paul support groups are urging Paul followers to contact Paypal directly to protest the decision.
We don’t have word from Paypal as to why they suspended the account, but what ever the reason we know they’ll regret it as their mail servers are inundated by a group of people who pursue their support of Paul with unprecedented zealotry.
See Ron Paul’s stance of tech issues at TechCrunch Tech President Primaries here, and our July 2007 write-up of the Ron Paul online campaign here.
Steve Case wants to make some new friends on Facebook. Today, his startup Revolution Money launched a friend-to-friend payment application on Facebook called MoneyExchange (as of this writing, it is still waiting to be added to the Facebook Application directory, but click on the link above and it should take you there if you are a Facebook member). Just like PayPal, which already has an app on Facebook, MoneyExchange lets you send money to your friends or receive money from them. Of course, if they want the money, they have to sign up for the application, and link it to their bank account. But that’s exactly how PayPal went viral. Revolution Money is betting that putting a payment service inside a social network will multiply that viral effect.
Sending and receiving funds on Money Exchange is free (as it is on PayPal for funds between two PayPal members). Dave Cautin, the senior vice president in charge of Revolution Money’s online business explains, “It is an opportunity to very easily collect money from your friends and associates. It could be used by housemates sharing the rent, or friends chipping in to buy a group gift.” Of course, there are many other apps that do this on Facebook already, including ChipIn, CashFly, and PayFriends, which are all based on PayPal. OboPay, which lets you text money to your friends from a mobile phone, also has a Facebook app. None of these are particularly popular, however. PayPal has 65 active daily users on Facebook. ChipIn has 81. CashFly and OboPay each have 3.
Revolution Money sees an opening here. “Massive online communities will have a currency,” predicts Cautin. And he wants Revolution money to be it. “For us, social networking is our laser focus,” he says. The company is also working on integrating the payment service into AIM, and offers it through its own Website.
In truth, Revolution Money sees MoneyExchange as a loss leader for its real business, which is the RevolutionCard, its credit card that undercuts Visa and Mastercard. It has no intention of making money off of MoneyExchange by charging for transactions because in its eyes the online payment service is just a way to build up a valuable network of potential credit card customers. You can be sure that every MoneyExchange member will get an offer for the RevolutionCard. Steve Case is just seeding the market.
It must be the holidays. Just as it did last year, Google Checkout is trying to pay for market share in online payments. It is extending a “free transaction processing offer” until February 1, 2008. That means any merchant who uses Google Checkout, as opposed to Paypal, won’t have to pay any fees for items bought through Google’s payment service. Since Google is still eating the related Visa and Mastercard fees, it is clearly taking a loss here to gain market share.
This is a common tactic for Google, which has tried to to buy market share in other struggling areas as well, like its radio ads. With Google Checkout, the company is also leveraging the popularity of AdWords. After the free period is over, for every $1 that a merchant spends on AdWords, he will get $10 worth of Google Checkout sales processed for free. Google is using its dominance in search and search advertising to subsidize and break into other markets. That becomes easier to do as Google’s search market share keeps rising (comScore has it at 58.5 percent for October, Hitwise says 65 percent for November). Someone call the antitrust lawyers.
Below is an an e-mail sent to Google Checkout members yesterday:
Subject: Update on Google Checkout transaction processing fees
Hello,
We’re writing to let you know that Google Checkout’s free transaction
processing offer has been extended to February 1, 2008. At that time,
Google Checkout will be transitioning back to its standard fee
structure.
You will still be able to earn free transaction processing if you use
Google AdWords – for every $1 you spend on AdWords, you will be able
to process $10 of sales through Checkout for free. For additional
sales, you’ll be charged a low 2.0% plus $0.20 per transaction. Fees
are the same for all payment types (Visa, MasterCard, American
Express, and Discover) and there are no monthly, setup, or gateway
fees. To learn more about Google Checkout fees, visit
http://checkout.google.com/seller/fees.html
If you’re an AdWords advertiser, make sure you link your AdWords
account with Checkout to earn free transaction processing. When you
link by February, 2008, your AdWords spend from January will count
towards free processing in February.
For instructions on how to link your account, go to
http://checkout.google.com/support/sell/bin/answer.py?answer=80154&topic=13456
If you’ve already done so, you might want to check that you’ve linked
to the correct AdWords account. Just log in to your Checkout account
at http://checkout.google.com/sell/ click on the ‘Settings’ tab and
click on the ‘AdWords’ link at the left of the screen. Note that your
Checkout and AdWords accounts must be based on the same currency in
order to be linked.
If you’re not yet a Google AdWords advertiser, you can learn more or
open an account at http://www.google.com/ads/adwords_checkout/ Google
AdWords can help grow your business by connecting you with customers
just as they are searching online for what you sell. With AdWords,
you’re always in control of your budget and you’ll pay only when
people click on your ads.
Please visit our Help Center at
http://checkout.google.com/support/sell/?hlrm if you have any questions.
Thank you for using Google Checkout!
The Google Checkout Team
Google Inc.
1600 Amphitheatre Parkway
Mountain View, CA 94043
Paypal has launched the Paypal Storefront Widget, a web based widget that allows anyone to embed a store widget on a web site.
The Storefront widget offers a seamless e-commerce platform for those wishing to sell anything on their site, such as t-shirts, CD’s or other items
The widget (see pic right) includes:
An Index page that shows thumbnail images of all the items for sale through the widget
a product page that shows a larger view of the items/ products for sale
A shopping cart directly within the widget
About and policy pages mean that any conditions are also contained with the widget
Users can set the widget to “sold out” or “sorry we’re closed” from the central control panel, and comes standard with a sharing option; visitors are able to grab the html for the widget from the widget and display it on their own site should they so desire.
I spoke with Paypal prior to the launch and they emphasized that the product was focused on blogs and social networking sites. Paypal has a deal with SixApart that sees the widget being embeddable into TypePad blogs without the need to copy and paste, for everyone else though its no more difficult than any widget is to embed, presuming you know where to get at, and where to paste the html.
Initially there are some limitations with the service, for example you only get the choice of one size for the widget, and it currently only supports sales in US dollars. Paypal though will be seeking user feedback once the program takes off and they are open to expanding the options available in the future.
Paypal sees a lot of possibilities for the widget; for example it provides a seamless shopfront for bands on MySpace who may want to sell recordings. It may also be a substitute for donation buttons that are occasionally used by bloggers as well; Paypal admits that some of their previous embeddable shopping options haven’t been as user friendly as they’d hoped, where as the Storefront widget is focused on being simple to use for everyone.
I’ve had time to play with the setup features for the widget and there’s little doubt that Paypal got the easy part right. Drop down menu items for navigation compliment sample products to get users started.
There are some parallels to Tailgate, in that both are transaction on the page. The difference with the Paypal widget is that like any Paypal transaction payment is made on the Paypal website itself to guarantee a secure transaction; the widget is fully transactional only to the last purchase point. This is functionality usually delivered by often expensive merchant solutions where as Paypal is offering this service for free, except of course they get a standard cut from the sale itself.
I know when I first heard about Paypal’s Storefront Widget that my thoughts were: here we go, yet another widget offering, but this is impressive and quite unique in the marketplace. I’d think that this product will be warmly received by those with something to sell, or those who haven’t offered items for sale previously on their blogs or social networking pages due to the cost and technical knowledge required in doing so.
When I last covered payment service provider Payoneer, the company had announced the collection of $3 million more in funding and the addition of iStockPhoto to its client roster. Today, the company is announcing the initial rollout of “Payoneer Virtual US Account,” a new offering that simplifies payment cash out for international payees. 
Paypal has launched the 
Initially there are some limitations with the service, for example you only get the choice of one size for the widget, and it currently only supports sales in US dollars. Paypal though will be seeking user feedback once the program takes off and they are open to expanding the options available in the future.
There are some parallels to 
