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when in the UK? and what for? we're using Android Pay already. no appetite for this...

Hi Andrew, 

Not sure how I can get in contact with you to inquire about paper you mentioned. I also don't mind an introduction to them as I have some additional info which can be mutually beneficial. cheers,

oh yes.... 15 years later... this was offered to banks 15 years ago...

A bank in Belgium did the same which is to fully outsource to IBM. Then we saw a lot of Indians sponsored by IBM come is as longterm visiting workers. 

The TARGET card breach was a big wake-up call in the U.S.  Small Banks and Credit Unions have started offering the service that enables cardholders to turn ON or OFF their cards. Debit and Prepaid debit cardholders specially find it ideal to be able to control their own card accounts (their own money).

This service can also exist with fraud detection services. Credit cardholders are not specially worried about fraud since they just don't pay if they didn't authorize the transaction/s. So banks should still use fraud detection services for credit card accounts or for cardholders that do not want to use Card ON / Card OFF.

All these services can happily co-exist with chip and pin. It's a win-win situation for banks, their customers and merchants.

Sounds like Paypal is liking the business model of KLARNA.

"The ECB strong 2factor authentication for internet related payments has been signed by all FSA:s in Europe making it a regulatory compulsion from 2015"

What is a strong 2factor authentication? Given an amazon experience, one can say that their convenient 1-click already has the attribute of a 2FA. userid/password is what I know  and  my shipto address or ipaddress/geolocation is what I have.

A 'stronger' 2FA that removes this convenience would be a disaster for consumers and eCommerce. Indeed one can compare this to a missile targeting a fly..

"What about ECB requirement of strong 2factor authentication and user ID + password? Does this check out fly in Europe?"

The trend since Paypal and Amazon 1-cick is "LESS is MORE". Note that these 2 apply their own fraud detection and they take responsibility for their own transaction losses due to fraud. One would see that 'transaction losses' is one of the KPI basis reported in their financial statements. Paypal has been quite transparent with their transaction losses.

Back to your question... ECB requirement? Is this a guideline or requirement? Can this really be required?

"ODR vs CP - there is nothing to dispute with the latter... (from liability point of view)"

Yes but these are CNPs not CPs...  You can't make them CPs just by changing the interchange fees. 

"PP just rides them for now (i.e. is allowed to). That could (will) change..."

PayPal Europe has a Luxembourg banking license. PP is indeed riding the rails and they pay for riding these rails. VISA and MC and their issuing banks earn each time a card payment is done in Paypal. Paypal impacts the acquiring business. VISA checkout is more to 'placate' acquiring banks and merchants. Given all of the above, I can't see how and why Paypal would be banned from accepting card payments.

"Visa should be able to do better than that: they can treat e-comm transactions that go through V.me as "cardholder present". That would provide VERY strong incentive for merchants."

If they do that, which is quite doubtful since interchange is partly based on risk, then the likes of Paypal will also benefit from it.

"The same goes for tokenization. If that card is played smart, PP could be dead in a few years..."

Tokenization... is a big word. But does not quite do the job as we have seen with Bitcoin...  

If Paypal's strength was just convenience, then they would not have survived and succeed. Paypal offers more than just convenience to consumers. It was the first to offer ODR (online dispute resolution) which card schemes are just now looking into. Paypal also has a very sophisticated and effective fraud detection system which a PSP needs if it offers the convenience of just userid/password.

And Paypal is more than a userid/password. It is a wallet where a user can fund his payments from different sources.  Paypal's loading costs are lower because they enable and motivate their users to fund their payments with their bank accounts.  And finally, one money-making aspect of Paypal is cross-border / currency exchange. How will this be managed by the new VISA Checkout?

In summary, VISA's initiative to offer the convenience of userid/password is a step in the right direction. But does it offer the same security and guarantees to consumers?