Amazon/Apple/Braintree/Dwolla/Google/Square/Stripe/Whoever Payments—the facts …

Online or at physical point-of-sale, via plastic or mobile phone—from the merchant payee’s point of view—all of the non-financial institution providers suffer the same serious handicap that eBay’s clunky PayPal suffers: none have interactive access to buyers’ funds held in retail banking debit accounts, nor to retail banking credit accounts (as do have the “bankcards” MasterCard and Visa); their only reliable access to payers’ funds is as retail bank Credit Card Merchant Account operators (which is what “PreyPal” claims to be when it wants to appear not to be operating its unlicensed “pretend bank”) via their own retail banker.

Even if any of these middlemen make use of direct debits via the ACH system (as “PreyPal” prefers to do to more cheaply access payers’ funds), the access is not interactive: there is no immediate acceptance of the debit by the bank nor any guarantee that, the following day, the bank won’t reverse the debit due to an insufficiency of funds; direct debit via ACH certainly is not a suitable medium for physical POS transaction payments; the only safe route for a merchant for point-of-sale transactions (credit or debit) is via a retail bank Credit Card Merchant Account with its interactive linking to the retail banking system …

These “pretenders” are all parasitic middlemen, a superfluous additional layer that, in the main, rides—precariously—on the backs of the retail banks’ existing systems; they make their money out of the difference between what the banks/MasterCard/Visa charge them and what they then charge their merchant-payee customers; therefore, their services, invariably, are going to be dearer, or are unlikely to be cheaper; anyone that thinks otherwise has been drinking too liberally of all the disingenuous nonsense that continually flows from the eBay Dept of Spin …

“PreyPal”, however, is different in that it will hold onto payees’ funds: “PreyPal” operates an unlicensed “pretend bank”—the “bank” they have to unlawfully hold onto merchant-payees’ receipts, and the “bank” they don’t have when the banking regulator comes sniffing around. That “PreyPal” manages to skirt wholly around U.S. banking regulations while operating this clunky, unlicensed, unregulated, non-FDIC-insured, “pretend bank”, frankly, defies belief; possibly it’s due to the same bureaucratic laziness/corruption that allows eBay to knowingly and calculatedly facilitate, massive, blatant, auction fraud on the consumers of the world … bit.ly/11F2eas

Regardless, if any of these middlemen pretenders think that they are going to take other than micro-fractions, if any, of the payments market away from the “bankcards”, MasterCard and Visa, I think that they are pathologically delusional (like eBay’s Johnny Ho), and possibly they have accompanied Johnny Ho on one too many his many trips with Alice down the rabbit hole to Wonderland, from whence he undoubtedly developed his obviously flawed approach to commerce …

For buyers, “digital wallets” undoubtedly are the way of the future, particularly for online payments, and with the recent arrival of the professional mobile/plastic POS/online digital wallets from MasterCard (“MasterPass”) and Visa (“V.me”), all these pretenders—with the exception of where they are mandated/integrated into an online marketplace—are now effectively redundant …

And, with respect to physical point-of-sale transactions by such pretenders (Square excepted, as Square offers unique hardware solutions to particular merchant problems), can I simply invite readers to, next time they visit The Home Depot, ask a cashier how “Pay Here With PayPal” is going—LOL …