Technology PayPal sues US regulator over "confusing" prepaid card rules

14:55  13 december  2019
14:55  13 december  2019 Source:   engadget.com

Venmo will launch its first credit card in 2020

  Venmo will launch its first credit card in 2020 Today, Venmo announced that it's launching a credit card in partnership with Synchrony. The card should be ready in the second half of 2020, and users will be able to apply for, use and manage it through the Venmo app. Cardholders will get real-time, granular alerts and be able to easily split and share purchases. Synchrony already partners with Venmo's parent company PayPal, as well as many retail brands. As TechCrunch notes, adding a Venmo-branded card could help Venmo generate more revenue. Venmo launched a debit card last year, so it was only a matter of time before it added a credit card. It's actually surprising that it took this long.

New regulations impose disclosure requirements on prepaid debit cards . Prepaid card issuers contend it will result in fewer choices for consumers. The rules would require further Truth-In-Lending disclosures under Regulation Z, currently applicable to credit cards and other loans, if the prepaid

To us , it’s not clear how a plastic card fits that bill: It’s at most a convenience. The company is now In this move, the company appears to be trading ubiquity for simplicity, slimming down its confusing array of And then there’s a PayPal Prepaid MasterCard, which is a conventional prepaid card which you

PayPal is a hugely popular option for transferring funds, but the legal status of digital payment systems continues to be contentious. As reported by the Wall Street Journal, PayPal is suing the consumer protection agency for the financial sector in the US, the Consumer Financial Protection Bureau (CFPB). The company is challenging regulations introduced by the CFPB in April this year which required PayPal accounts and other digital wallets to guarantee the same consumer protections as prepaid credit cards.

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The issue is that most PayPal users link their credit cards to their accounts to facilitate payments, in what the industry describes as a digital wallet. However, users can also store money in their PayPal account, which regulators say makes the accounts similar to prepaid credit cards.

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Cookies help us customize the PayPal Community for you, and some are necessary to Confusing please read. I will try and make this short! when I made my river island purchase through PayPal they used what was in my balance and took the rest from my card which is fine but what I’m confused with

Paypal doesn't care about the seller, even though we make them their money and pay their paychecks. The buyer could send you a PS3 back instead of that XBox and you just have to take it. Just bring Paypal to smalls claim court and let the judge tell them to go **bleep** for you.

PayPal complains that regulations from the CFPB obliges it to make disclosures to its customers which are "misleading and confusing," such as the use of a short disclosure form which includes references to fees for balance inquiries from ATMs or for customer service, neither of which apply to PayPal. Some customers have the impression from the form that they will be charged to access their PayPay balance, which is not the case.

The company maintains that digital wallet systems like PayPal accounts are fundamentally different from prepaid cards and that they should therefore be regulated differently.

This is not the first time PayPal has clashed with the Consumer Financial Protection Bureau. In 2015, the CFPB filed a complaint against PayPal's credit service, known as Bill Me Later, alleging that the company was signing up users to credit without their knowledge. In the end, PayPal had to pay $25 million in restitution and fees to settle the case.

The current complaint has been filed with the US District Court for the District of Columbia. PayPal is seeking to vacate the application of the prepaid card regulations to its products.

Wall Street Journal

Tim Cook: Apple Pay transactions doubled year-over-year .
Aside from revealing that its wearables and services businesses keep on growing, Apple has also discussed its mobile payment app's success and its partnership with the US Census Bureau during its earnings call. Tim Cook, the tech giant's chief, said users completed 3 billion Apple Pay transactions within the fourth quarter of 2019. He added that Apple Pay had a bigger transaction volume than PayPal and is growing 4 times as fast, because the mobile app's transactions and revenue more than doubled year-over-year.Apple CFO Luca Maestri has also announced that the US Census Bureau is using iOS devices for next year's census.

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