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Comment by byoung2 | Hacker News Reader

I've often wondered why the credit card companies haven't gotten into this business already. My bank (Bank of America) offers a program called ShopSafe, where you can generate temporary credit card numbers to use online. You can set the limit and expiration date, even for recurring transactions. The numbers are only valid for the first merchant that authorizes a charge.

I wonder why there hasn't been a credit card company that offered a version of this with the option to prepay or link to a bank account or existing credit card. That way people could shop online and merchants who are already set up to accept credit cards wouldn't have to modify their code to interface with yet another payment API. The credit card companies would still get money from the fees charged to merchants, and they could also earn interest on the balances users keep.

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The iDEAL system is very good also. It works like this:

1. You click checkout

2. You are sent to your bank's website

3. You login

4. You get a screen that shows the amount you have to pay, you verify this

5. You get an SMS with a code that you have to enter

6. Purchase completed

The nice thing about this is that it's very quick and the seller doesn't get your credit card number; steps 2-6 happen on your bank's website. And there is no intermediary: it's just the seller's bank and your bank. There is nothing to set up, you just have to have a bank that supports it (almost all banks in the netherlands do) The nice thing for sellers is that chargebacks are not possible. This is a much saner way to do online payments.

What about for people without SMS?

They either buy a $10 phone, or they use another payment method. Or perhaps there are banks that don't require SMS authentication, but I don't want to be a customer.

We have the same thing in Sri Lanka called a "Web Card". You don't even need to have a bank account to get a Web Card - just pay some amount, and get a card for that value. Then you get a temporary VISA number which can be only used in internet transactions. It's actually quite convenient actually.

The generic name for this is a prepaid credit card. They seem to exist around the world, but I've never seen them being sold in any shops where I live.

3V Cards in Ireland by Visa, one of the Irish banks and a company (3V):

https://www.3v.ie/about_3V_vouchers.html

AFAIK, this was one of the first ever 'disposable' credit cards to come out. It's pre-paid - you get a new credit card number whenever you top-up. Great way to make a large, once off purchase (e.g. a new MacBook mmmmmm) that is over your existing card's credit limit.

I find it easier to overpay the credit card account, so that you generate positive (or negative, depending on how you look at it) balance. The bank's usually unhappy about it, but it works.

This was one of the cheapest ways of turning my cash in my Irish bank account into cash in foreign countries. By loading up my Bank of Ireland credit card, I could withdraw cash from ATMs at Mastercard's exchange rate, and no other fees (or with no loss at all if in Euro). Since the cash advance isn't actually a loan, BoI doesn't charge interest on it. Unfortunately, the same trick doesn't work for most banks in other countries; almost every other bank charges interest on cash advances even when the bill is already paid, much less paid before due.

Citi and AOL tried something called C2IT between 2000-2003 http://www.finextra.com/news/fullstory.aspx?newsitemid=10099 I suppose it's all about 3rd party support and building an eco system, and that starts with a solid offering.

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