PayPal: Your Data Is More Secure in Our Mighty Cloud Than in Your Pocket
Visa’s global head of product, Jim McCarthy, criticized PayPal’s new in-store payments service at a Goldman Sachs conference in San Francisco on Wednesday, saying he believes there are “real issues” around security when it comes to the PayPal service.
MarketWatch reports that McCarthy then gave the example of someone watching a PayPal-paying customer enter private data into a payment terminal to complete a transaction — essentially exposing the data.
PayPal’s response? With PayPal, the company said as part of a lengthy statement, your financial information can’t be lost or stolen from your wallet, your card or on your phone — and it’s safer in PayPal’s cloud than in your pocket.
“PayPal is leading payments innovation for frustrated merchants and consumers limited by legacy systems and approaches. In the same way that PayPal drove innovation online over a decade ago by making shopping easier, we are listening and responding today to what merchants and consumers are crying out for — point-of-sale payments innovation that offers value, convenience and security anytime, anywhere,” the statement read.
The eBay-owned company went on to say that it processed almost $120 billion last year in global online payments volume, with the lowest loss rate in the online payments industry, and reiterated that it believes it can scale its services to meet the potential growth in transactions that would occur offline, too.
Visa’s assertions pertained specifically to PayPal’s new in-store payments system, through which PayPal customers can enter their PayPal payment info or use a PayPal credit card to purchase items at select retail stores.
At this time, Home Depot is the only merchant that has publicly announced it is using the system. The big-box retailer first began experimenting with the system late last year, allowing PayPal employees to purchase things at the store. Recently, the PayPal in-store payment options were rolled out to all paying customers with a PayPal account.
The jabs over payments security comes as many companies — from Visa to PayPal to Google — scramble to innovate in the mobile and Web payments space.
Visa recently unveiled more details about V.me, its upcoming “digital wallet” that uses a PayPal-and-Amazon-like payment system. Consumers will carry a balance in the digital wallet, using a variety of sources — a Visa, MasterCard or bank account — and it will enable them to check out using just a user name and password, rather than having to enter credit card information. American Express is doing this, as well.
But, as an analyst points out, PayPal is probably going to cause headaches for traditional credit card companies by undercutting fees that merchants currently pay to accept the traditional networks’ cards.
And PayPal pretty much confirmed that in its statement: “As PayPal delivers point-of-sale innovation, we intend to offer competitive pricing to merchants at greater value compared to the existing legacy providers and potential PayPal imitators.”