Payment Talk

PayPal - Round and Round We Go

2025-03-14T11:01:00.000-07:00

Full disclosure, I am a shareholder in PayPal and believe that that is a sound position.

However, what happened this morning reminded me of the bad old days of PayPal's journey.

One of the companies that I do expert consulting calls for uses PayPal to pay me. I received a notice that the money had been credited to my PayPal account. All I wanted to do was transfer the money to my checking account so I went to the app. I had to poke around for a minute or so to find that choice. I was first asked if I wanted to sign up for a Venmo debit card which I chose to skip over. No matter how appealing the deal, I am not interested.

This reminded me of the old days where in order to back a PayPal purchase with my credit card I needed to bounce around and switch from the default ACH method. This was very annoying and caused me to hesitate to use PayPal for all but very rare situations when I was totally unfamiliar with some no name merchant. Then miraculously PayPal finally made it possible to make the credit card the default funding backing choice. Once that annoyance went away I was less likely to choose another method.

So, I am torn, as a shareholder I admire their objective to make money and get a deeper relationship but once again I am likely to choose another payout path if the consulting agency offers it. All the other agencies I do business with push my payment directly via the ACH to my checking account.

PayPal, if you want to market to me, and I am opted in, send me marketing emails or texts but please do not get in the way of me doing the simple transactions I want to do. PLEASE! THANKS

"concentrating on the potential next big things in payments from your perspective would spark conversation"

2025-03-06T11:46:00.000-08:00

OK, I get asked this a lot. I have had the benefit of being in the industry as it experienced; a) transformation from zip zap machines/warning bulletins to electronic authorization/capture, b) the emergence of the internet as a commerce platform and c) the mobile revolution. I could share stories that would make your hair (for those of you who still have it) go on fire. Back in the day at Verifone, ...... nah - your going to have to buy me lunch or a beer. OK, so back to the question. The pundits have said it was going to be crypto, fed now, the metaverse, BNPL, Social commerce, QR Codes, and of course now AI. The next time I hear someone proclaiming their thing is a Game Changer, I am going to scream (again and again and again).

The honest answer is I do not know but I do not think it is any of the seven things I have mentioned. But of course, I have to at least take a guess, right? The most challenging market to make this prediction is here in the US where cards, cards, cards continue to dominate and IMO will for my lifetime. Note - I have put my money where my mouth is, I own Stripe, Adyen, Fiserv, Visa, MasterCard, Block, Google, Apple, etc. In other markets like Asia, Latam, and Europe, there have been massive transformations such as Alipay, UPI, PIX and Open Banking.

AI itself is a tool so the question is what truly transformational change can it be utilized for and when I say truly transformational I am not talking about a tenth of a percent uptick in authorization optimizations or fraud reduction.

OK, since success in payments, for all parties, is about risk management, I would say that the winning opportunity to really change the paradigm would be for the industry to fully embrace PassKey/Fido authentication across all channels. Combining this with full Network tokenization that is already nearly fully deployed would truly be a game changer. Authentication rates would skyrocket, fraud would be mostly eliminated, the Interchange premium for CNP "could" be eliminated albeit that might require Durbin like legislation, and many associated costs for Merchants, Issuers and Acquirers could disappear.

Thoughts?

I asked, you spoke, so here we go....

2025-03-05T13:51:00.000-08:00

Yesterday on LinkedIn I posed the question - In 2008 I launched a blog called PaymentTalk. I am contemplating revving this back up. I would welcome a show of hands if there is interest and also welcome topics that would be desired. I had nearly 30 respoonses. Here is an example; >>>>>>>>>>>>>>>>>>>> I would be interested if there were topics on on/off ramps for Ripple, 3dsecure, and payment rails. >>>>>>>>>>>>>>>>>>>> I'd read it and share it. Go for it! You are voice of reason Steve. >>>>>>>>>>>>>>>>>>>> Forward looking stuff, the evolution of Wallets, fraud in payments, payments in specific countries, Open Banking payments, payment processors..So much to cover! >>>>>>>>>>>>>>>>>>>> Take my money! don’t think you’re ever retiring Steve >>>>>>>>>>>>>>>>>>>> would love your reality check on unstable and stablecoins, AI driven fraud mitigation, and quantum banking / payments please. You make it all make sense. >>>>>>>>>>>>>>>>>>>> ...the topic I would say is honest facts about PCI Compliance >>>>>>>>>>>>>>>>>>>> ...concentrating on the potential next big things in payments from your perspective would spark conversation. >>>>>>>>>>>>>>>>>>>> Would love your take on the implications of Apple opening access to SE and NFC. >>>>>>>>>>>>>>>>>>>> I'd challenge you to provide commentary on an area of payments where you either feel less certain of the future or are less familiar. >>>>>>>>>>>>>>>>>>>> Yes! As long as you bring your sense of humor that we see so often on LI. >>>>>>>>>>>>>>>>>>>> How about cross-border payments/money movement, instant/real time payments, pay by account…so much evolving stuff in payments. Topics of high interest to NYPAY members from 2025 survey. >>>>>>>>>>>>>>>>>>>> I would be very interested; wallets, agentic AI, and identity are all topics I am interested in >>>>>>>>>>>>>>>>>>>> Thanks to all who responded. I will start writing soon! (in between travel, tennis, pickelball and walking my dog)

Partnerships in Payments

2025-03-04T10:52:00.000-08:00

Almost a year ago to the day my session on Partnerships in Payments was published on PaymentsOnFire; https://glenbrook.com/payments_on_fire/episode-234-partnerships-in-the-payments-industry-steve-klebe/ Discussing this topic never gets old.

Surcharging

2024-05-25T15:34:00.000-07:00

So I walked into a Dr's office yesterday and there is a sign saying that as of May 1 they are adding 3.5% whenever a patient chooses to pay with a Credit or Debit card. This doc happens to be a personal acquaintance so I choose to do a little calm education by sharing one of many blurbs I found with a simple web search stating very clearly that surcharging is not allowed on Debit, even Signature Debit. She was quite surprised and said her processor assured her it was allowed. She reached out to them and got back more BS trying to justify their position. Now sadly as often is the case with legislation there are unintended consequences and since most merchants pay a blended rate they don't get the benefit of reduced costs on Debit cards, their PSP does. Arguably if the PSP didn't get that extra margin all the blended rates likely would have risen in recent years. Stay tuned as this story unfolds. She asked me to talk to her PSP. p.s. they offered me the option to pay with Venmo without any surcharge which I did. A day later - I spoke to their PSP who is actually an old school ISO. The person I spoke to seemed genuinely surprised that he and his company did not understand the rules. He promised that they would try and find a POS solution that would not surcharge Debit cards.

Zelle and Fraud

2023-03-07T09:55:00.003-08:00

As someone who is intimately familiar with Reg E, the Electronic Funds Transfer Act, reading news like this - https://www.finextra.com/newsarticle/41920/senators-urge-regulators-to-take-action-on-zelle-fraud - is thought provoking. The actual fraud losses by consumers relative to the total amount transacted is very, very small. However, if you are one of the people who loses their life savings due to one of these scams, that does not matter very much. As a user of Zelle, Venmo, CashApp, PayPal, etc. I have noticed a significant increase in messaging about how to prevent one of these scams from occuring which is great. I also appreciate that for the most part consumers are not charged for these transactions and hence why the FIs and non FIs (ie; PayPal, Venmo, CashApp) are reluctant to reimburse their customers. However, this was the same for ATM transactions in general and REG E was imposed and the systems not only survived, they thrived. So, I think a balanced solution is needed. REG E or something similiar should be implemented to protect consumers using Zelle and these other services. The money the service providers save by having these TXs done electronically is massive and either already or over time paid services will be added making these systems profit generators. But consumer confidence is critical and therefore the regulation is a necessity.

Nostalgia

2022-12-30T11:28:00.009-08:00

As we draw 2022 to a close I thought I would share a link to a few photos I have in my archive which I lovingly call the Klebe Payment Museum. Happy New Years to All! Lets hope 2023 is a better year for the world and the world of payments! Peace Steve

Crypto and Mainstream Payments

2022-11-30T09:33:00.003-08:00

hi! it has been a long while since I have posted anything but since I am in semi-retirement mode, I thought I would start it up again. I keep reading the press releases about this site and that ecommerce platform adding crypto payments to their platforms. What am I missing? I emphasize the context of the post - "mainstream" payments. I see ZERO reasons how this adds value in this context. I define "mainstream" as your typical retail purchase transaction for physical goods or services. This article generally sums up my perception of the situation. If properly regulated, the costs added to be regulated and the customer service requirements that would entail would likely signifcantly diminish any economic benefits. Thoughts?

Keep an eye on the pie chart

2020-12-19T14:55:00.002-08:00

I was reading this article today; https://seekingalpha.com/article/4395431-apple-pay-payments-systems-are-getting-and-attention and it reminded me of something I have been projecting for a long time. As electronic payments make up a larger and larger portion of overall payments, heavier regulatory scruitiny is ineveitable here in the US. In Europe and Australia there has been significant regulatory influence and of course the Durbin Amendment was a sign of things to come here. Open Banking mandates in India, Singapore and Europe are further examples. Covid will probably have now accelertated the move towards even more regulation even sooner. If you look at a state like California and how PG&E is regulated, you get a sense of where this will eventually be.

ETA EXPERT INSIGHTS: MOBILE PAYMENTS ON CONSUMER DEVICES – DRIVING ADOPTION

2017-10-10T13:41:00.003-07:00

http://www.electran.org/publication/transactiontrends/eta-expert-insights-mobile-payments-on-consumer-devices-driving-adoption/

Bitcoin

2017-10-10T13:08:00.002-07:00

So, I have an interesting BitCoin story. Back in April of 2014 when the craze was just starting, of course, I had to try it out. So, I opened up a CoinBase account and bought $100 worth. I spent $20 at Overstock.com just to see how the user experience was, which was fine and then basically tuned out and forgot about it. Recently the frenzy caught my attention so I went and checked on my account. The remaining $80 had turned into between $600 and $700 depending on which way the wind blew on any given day. So, I spent another $50, again at Overstock, which went smoothly. Just checked today and after having spent $70 of my original $100, I have a balance of $690. Not bad!! Maybe I should have invested my entire 401k? NOT! As I felt from the beginning and continue to feel the volatility and the lack of regulatory protections are going to keep this in the corners of the payments world for many years to come. Let me know what you think!

Speculation reaches a fever pitch

2014-09-07T15:26:00.000-07:00

The entire industry is waiting with extraordinary anticipation regarding Apple's entry into the "mobile" payments realm. Whatever it is, it is likely to be less than anticipated but hopefully meaningful and constructive as a rising tide should lift all boats. Unlike Apple's late entry into the MP3 world, the world of payments is extremely fragmented with incredible inertia to overcome.

NFC vs. Mag Stripe

2011-10-06T11:12:00.001-07:00

Who cares? Did you ever go to a Mag Stripe conference? Why are there so many conferences now focused on NFC? Stupid question! Because it is the latest bandwagon and therefore conference organizers jump on it. What really matters? It isn't the technology. It is the simple fact that the mobile phone is adding more and more value to our lives and regardless of the technical bridge used, it is obvious that using our phones as a proxy for our payment credentials has great promise. Freeing consumers from having to carry around a lot of cash or providing (hopefully) responsible consumers with a credit facility is what matters. This matters to both consumers and merchants. So, lets all stop worrying about which technology is going to win and give the consumers and merchants what they want. Bar codes, mag stripes, NFC, OTA are all going to co-exist for a very long time. Damn, I was at a resort recently and they still used an old knuckle buster to capture my credit card info. p.s. They had advanced to the carbonless version of the sales draft!

Micropayments?

2011-10-04T15:01:00.000-07:00

I am in the midst of reading a new (& well written) whitepaper on Mobile Payments from the Smart Card Alliance.

I came across this defition of transaction sizes; "2.4.1.2 Transaction Size
Transaction size affects the choice of mobile payment technology and approach. Mobile payments typically fit into one of two transaction size categories. Micropayments (less than $10-$25) are typical for paying for ring tones, music, parking, transit, coffee, and items in convenience stores. Macropayments (over $25) are typical for all other transactions, such as person-to-person domestic and international remittances, charitable donations, Web site purchases, bill payment and retail POS."

I see things here a little differently. I have always thought of micropayments as $1-$2 in size, minipayments as $3-$7 and normal or as they say macropayments as $8+.

What are your thoughts?

Try it, you'll like it (or maybe not)....

2011-07-15T08:17:00.000-07:00

I read press releases everyday about what are pitched as the latest and greatest innovations in payments. But, then, I go behind the "lines" and sign up (if necessary), and actually try the product or service. You need to do that too, before rendering an opinion.

I have (or had if they have gone four paws to the sky) the following accounts; Serve & the predecessor Revolution Money , Obopay, BlingNation, PayPal, Square, Mazooma, Kwedit, Rixty, Starbucks, PaybyTouch, Mobibucks, ClipperCard(BART NFC), Safeway echeck, Google Check-out, itunes, BillmeLater, Click n'Buy, Verified by Visa, Amazon PayPhrase, TwitPay, etc., way too many to name (but I tried).

There is one thing to keep in mind, though, when you do this. In a prior phase of my career, it was important for me to have a credit card from every brand and every major bank since I was calling on all of them and it was awkward to take someone from Visa out to lunch and pay with an Amex card. Once when applying for a mortgage, everything was excellent in my application but the one hit I took was having too many accounts. :-)

First NFC Payment Completed!!!

2011-06-17T14:57:00.000-07:00

Wow! I actually found a merchant to use my NFC enabled Discover Card to pay for a recent purchase. It was at Mickey D's. (BTW - I have been showing off my Discover NFC decal which I have applied to the back of my iPhone to everyone!)

NFC (or Mobile Payments depending on your preferred spin) - My real life story

2011-05-13T13:24:00.000-07:00

So, I was in NJ on business this week. I stopped in at a supermarket, picked up a few items and arrived at the check-out. There was a Verifone (still brings a smile to my face everytime I see one considering my tenure there during their formative years)terminal with the necessary NFC attachment so since my iPhone was already in my hand (playing Words with Friends while waiting to pay) and is equiped with my recently received NFC decal from Discover, I thought GREAT, I finally found a place to use NFC.

I started tapping my phone on the NFC reader. The clerk looked at me like I was from MARS. He had no idea what I was doing - "dah, have never seen that before". Well, it did not work, so out came my credit card and a simple swipe and I was done.

I contrast that with my experience (previously written about) at Starbucks using the iPhone 2D Bar Code app. Bravo!!!!

The point is, it isn't about the technology. It is all in the execution. And, the challenges of a successful execution at the very diverse and complex POS are staggering. Under the best of circumstances, this is a 5-10 year evolution. For God's sake, people are still writing checks at the supermarket register.

Ouch, another major breach! (Not an issue for Direct Carrier Billing!!!)

2011-05-04T08:14:00.000-07:00

One of the major benefits of DCB (Direct Carrier Billing) is that the merchant is not burdened by having to handle or store any sensitive information that could be used to create subsequent fraudulent transactions and therefore there is no PCI.

We talk often of the benefits to consumers;
- no username/passwords to remember
- everything they need to transact is in their heads and their hand
- no enrollment
- for someone to put a fraudulent charge on their bill, they would have to have their mobile phone in their hand at the exact moment of the tx and depending on the carrier, also have to know their billing Zip Code. (note - this add'l 2nd factor of auth will be available on two of the four major carriers within a month and three of the four by late summer).

But this is a major benefit to the merchant!

Alternative Payment Systems Innovations Conference, San Francisco, 3/29-3/30

2011-04-08T08:26:00.000-07:00

I attended and moderated a panel at this conference on Alternative Payments. The emphasis of the conference was Mobile, dah! Isn’t every conference these days? This was the 2nd annual version of this event and I would rate it a 7:10. It attracted a very high quality group of speakers (present company excluded!). It was missing a critical mass of attendees and especially prospective buyers in the form of merchants. That is a common problem with most payments conferences, other than the Direct Response Forum and Merchant Risk Council which are both primarily merchant grass roots driven.

The most profound thing that came out of this conference was a quote from a former colleague and now esteemed consultant, Richard Crone. Richard stated; “the one who enrolls, is the one who controls” and further that “the carriers have the consumer’s payment info and access to leverage their device for security” and "are therefore in the best position to win in mobile payments". I could not agree more with Richard and that is the why I came to BilltoMobile. We are an extension of the carrier’s platform and leverage that existing enrollment and the ability to validate not only the phone but a 2nd factor of authentication, the billing zip code as well.

Kindle Experience

2011-03-22T20:44:00.000-07:00

After 30 years having the Wall Street Journal delivered to my home and reading it every day, I switched to a Kindle subscription.
They offer a 14 day trial and I am on day two.
When I went to lunch today, I realized I did not have my Kindle with me but alas I had my iPhone which I had loaded the Kindle app on.
I thought, GREAT, I can sit and eat and read the Journal.
But, alas, it was not there. So, I emailed the customer inquiry link via the app and got a prompt answer back that newspaper and magazine subscriptions are only available on the Android Kindle app, not the iPhone Kindle app. If this sort of thing persists, it could make consumers switch to a more open platform where they can have uninhibited access to content that they have rightfully paid for.
This reminds me of a bygone era of closed systems (ie; Wang word processors and Sun servers that would only run Solaris, etc...) Well, we know what happened to Wang and Sun.
What does this have to with payments?
Well, this is a sensitive topic so I will leave it to your imagination.

Sprint Selects BilltoMobile to Enable Subscribers to Charge Online Purchases to Their Wireless Bill

2011-02-18T09:42:00.001-08:00

3 down, 1 to go!

Sprint Selects BilltoMobile to Enable Subscribers to Charge Online Purchases to Their Wireless Bill
— BilltoMobile, the leading provider of mobile payments for web purchases, today announced a Direct Mobile Billing Gateway Service Provider agreement with Sprint (NYSE: S), which will allow Sprint customers to charge online purchases directly to their Sprint bill. Once implementation is complete in the coming months, merchants and payment resellers using BilltoMobile's mobile payment service will be able to offer this payment option to Sprint customers.

Alt Payments Systems Innovations Conference

2011-02-13T13:39:00.000-08:00

http://paymentinnovations.net/
Hope to see you at this conference coming up in late March.
Last year was the first in this series and I went (hey it was 10 minutes from my house) with my normal skepticism.
Well, it was a very pleasant surprise.
And, since I am speaking this year, I am looking forward to contributing to its value.

meCommerce

2010-11-12T08:59:00.000-08:00

I thought, why not, it was almost Friday the 13th, how about coining a new phrase! So, here you go, meCommerce - the convergence of m and e commerce with a cute spin.

With all the spin about mobile and especially mobile payments, I thought I would have us think about what really matters and that is "me", the consumer side of me. After all, this is the "me" economy isn't it?

All that really matters to the consumer is that they have as seamless an experience as they can have across all the platforms and devices they utilize to maximize their time and money.

As ecommerce evolved, those merchants who figured out how to blend the benefits of bricks and clicks delivered the most value to their customers. Now, we have bricks, clicks and pockets (? - perhaps someone can contribute something better!!).

Mobile, with the proliferation of smartphones which are just computers in your pocket that happen to also sometimes work as phones, present enourmous possibilites for enhancing the overall experience for the consumer.

As it relates to payment, the only hang up is the explosion of "Walled Gardens 2.0" which serve to restrict the consumer from the freedom to pay how they wish and merchants the freedom to choose which payment methods they want to take and their ability to negotiate the best rates their volumes deserve. These perhaps serve a purpose during an initial formative phase but they will disintegrate as the power shifts from the few to the many.

Article on Direct Mobile Billing in Digital Transactions

2010-11-05T09:26:00.000-07:00

I am pleased to report that an article I authored is available in this month's issue.

If you click on this link and then choose the November issue, you can read it;

http://digitaltransactions.net/index.cfm?pageid=3

It is on page 22.

Would welcome your comments!

BilltoMobile Adds ATT (Only provider with both ATT & Verizon)

2010-10-29T10:03:00.000-07:00

This has been a big week for the advancement of carrier billing for ecommerce purchases! The company I work for BilltoMobile (powered by Danal Ltd, Korea) announced and launched support for ATT mobile users. This is in addition to our previously announced and launched support for VZ users. We now have 2/3rds of the US mobile user market covered and more to come! We are the only provider that can provide the superior capabilities (ie; dynamic pricing, real-time auth and verification, limit management, dramatically lower dispute rates) and lower costs of Direct Mobile Billing (carrier billing 2.0 versus the legacy PSMS approach used by others) on both Verizon and ATT!!!