Comments on: A new way to pay: Noca's credit card alternative

New debit payment processing system dramatically undercuts credit card and PayPal fees.

[TinyApps_Org]

"In a live demo where Gupta was buying $10 worth of digital goods from early Noca customer Klatcher, the system asked for a mobile phone number, sent a PIN to it, and required the user to enter that PIN on the transaction form. I didn't see how that added any security at all (the buyer could give out any mobile number), but Gupta told me that if the transaction had been for more money or for physical goods, the verification process might have incorporated Yodlee's system of challenging the buyer to produce personal information from financial records, such as selecting an accurate previous address or amount of the buyer's regular mortgage check."

So in many instances, a buyer only needs to know a name and routing/account number?! The Nigerians are going to *love* this! At the very least, there should be an account verification process (similar to PayPal's) just to sign up. Otherwise, anyone who has ever received a check from you can go to town. And good luck trying to get your money back from the bank:

http://www.dfi.wa.gov/consumers/education/debit_faq.htm

"Under the EFTA, a bank has 10 business days to investigate the matter (20 business days if your account is new) and report back to you with its results. If the bank needs additional time, it may, under certain circumstances, temporarily give you some or all of the disputed amount until it finishes its investigation. Generally, a bank is allowed up to 45 days of additional investigation time (90 days for certain transactions). 'But until the dispute is resolved,' said Creamean, 'you should be prepared to pay your mortgage, car payment, credit card bill and any other obligations that may come due.' Also, she said, if the bank's investigation finds there was no error, theft or loss, it can take back the money it put into your account, after notifying you."

[victormess]

SMS verification is only for digital goods and/or micro-transactions. For actual goods/services i.e. things that need to be shipped the users need to verify their bank account. This can be done either in real time or in batch mode using two micro-deposits.
ACH regulations require account verification and thats the way Noca is doing it.

(Disclaimer: I am affiliated with Noca )

[TinyApps_Org]

Thanks for the reply, victormess!

"SMS verification is only for digital goods and/or micro-transactions. For actual goods/services i.e. things that need to be shipped the users need to verify their bank account. This can be done either in real time or in batch mode using two micro-deposits. ACH regulations require account verification and thats the way Noca is doing it."

If ACH regulations require account verification, then why are digital goods and micro-transactions exempt? Is there some official cap? Regardless of the amount, not requiring hard-and-fast verification is a major mistake.

[victormess]

ACH has special regulations for non-profit/charities and micro-transactions. Hence the exception for digital goods (the marginal cost of digital goods is micro)

[richto]

I pay Paypal 1.4% plus 20 pence per transaction so the percentage fees quoted in this article are not accurate.

[cooperalex2004]

This is an american article, so I guess your getting a better deal overseas (maybe it has to do with the exchange rate).

[Sac Tinko]

"There's no reason to use IBM servers today" -- "Transactions are handled and encrypted by Noca's servers" -- Whether they are IBM's or Noca's, servers are still needed irregardless of this tool, so his point is a wash.

[idfubar]

I think he's referring to "IBM servers" as being indicative of a (well-known?) way of doing business which is arguably less cost effective than what he is proposing...

[C.Schroeder]

I have to agree with TinyApps_Org. As presented, I don't see how the buyer is protected from fraud on "small" purchases. Seems to me the cell phone# needs to be pre-registered and protected with a login password to prevent somebody with an illicit copy of the bank account info from making purchases. Don't get me wrong, it's an interesting concept, but this article has not presented enough depth on the security aspects.

[hawkeyeaz1]

"didn't see how that added any security at all (the buyer could give out any mobile number)"
At the very least, it creates a trail. If it allowed any cell phone number, and someone who was not authorized gained access and entered the pin, you could track who (knows about) the payment... It might not get you a specific person (prepaid phone), but it will get something.

[jeffyablon]

Let's also remember that for high-dollar transactions, PayPal through your checking account at $5 flat fee is cheaper.



Yes, VERY high transactions ($2000 and up), but vendors wanting to manage fewer relationships and also not overwhelm customers have to take this into account. Oh, and wait . . . PayPal allows your customers to use credit cards, and this service doesn't.



Guess where I'm staying?



[CNET editors' note: URL removed]

[ericrosoff]

How does this compare to https://revolutionmoneyexchange.com/ ????

Revolution offers FREE transactions. There are only fees for check withdrawals, check stop payments, paper statements, ACH returns, and overdrafts, but not for sending or receiving money.

[c|net Reader]

Yet another company to breach, it would seem.