German cartel office initiates proceedings against PayPal | Hacker News Reader

German cartel office initiates proceedings against PayPal

reuters.com

127 pointsisaacfrond98 comments

From the article:

"The regulator is investigating in particular rules that say merchants may not offer their goods and services at a lower price to customers who choose a cheaper payment method than PayPal."

That does sound rather uncompetitive.

isn't that the same as credit cards not allowing to charge extra for using them?

which btw is now also not allowed by EU rules.

That's also pretty anticompetitive ant it's crazy that this behavior has been tolerated for so long. Regulators have been asleep at the wheel.

I do not think it was ever allowed. EDIT: I did not realize you were talking specifically about Germany.

In France you had a lot of "minimum 10€ to pay with CC", now this is mostly gone after COVID.

I think that rule disappeared long ago in the US because apparently people spend more with CC.

It's still alive and well in Washington State. It's sporadically used, mostly by gas stations and small stores when you use a credit card they will add a 50 cent fee or charge an extra dime a gallon for gas, things like that.

It is also convenient for the vendor. Checks are a major hassle, check fraud apparently still a thing and cash comes with additional security implications. Don't let the vendor tell you that CC fees reduce their margin!

True. Also sounds uncompetitive to me.

but this is what the EU seems to want. based on EU regulations surcharges at least for credit cards are illegal. the price for the consumer must be the same. for some reason it does not cover paypal though.

Because the member states of the EU, and countries in general, want a paper trail. This reduces lost taxes due to underreporting.

As such it would be foolish to allow shops to deincentivise that

> The regulator is investigating in particular rules that say merchants may not offer their goods and services at a lower price to customers who choose a cheaper payment method than PayPal.

In the US this is standard behavior for credit card companies (and is reprehensible). Is it not the case in Germany?

more than that, based on EU regulations, charging extra for credit-card use is now illegal in germany. but confusingly this law does not apply to paypal transactions

Wait, charging extra for credit card use is illegal?

Yes, which makes some sense given that the EU has also capped interchange to 0.3% for credit cards.

Sure, I don't know the details about Germany but I'm pretty sure it's the same in the UK. https://www.gov.uk/government/news/card-surcharge-ban-means-...

It’s standard now but not the law as lots of places do charge a fee. Id actually even say it isn’t standard, as a lot of court houses charge a processing fee when you use a card over cash (or did before the pandemic, haven’t been to one since)

> It’s standard now but not the law

In fact, surcharges are now prohibited by EU law (as long as the card is covered by the interchange cap): https://europa.eu/youreurope/business/finance-funding/making...

We’re talking about in the US here

The comment you're replying to is asking about the situation in Germany, and TFA is about Germany as well.

I only heard about Mexican cartel.

I love PayPal. It might be another be-evil type corporation. But it is just sooo convenient. I am just curious if there is some alternative to it in Germany. I don’t want to give my bank account number to every random online shop. Credit card yes, but I am too lazy for entering the numbers every time.

Edit: I am not kenn on saving my credit card number somewhere digitally. Browser, password manager or a text file are not my preferred options.

Not Germany, but here in The Netherlands the banks just developed an online payment system together 18 years ago, and everyone uses that.

https://en.wikipedia.org/wiki/IDEAL

And Belgian have their own system too: https://en.wikipedia.org/wiki/Bancontact_Payconiq_Company

Which means that everyone uses PayPal since it's the solution that you know is going to be accepted everywhere instead of having to juggle between 10 different services.

> Which means that everyone uses PayPal

At least in the Netherlands this is not true at all. Everyone here uses iDeal, and if that doesnt work its back to a SEPA bank transfer

iDeal is (maybe) nice for people targeting the Dutch market. But what about somebody targeting larger parts of the European market or global. Or even if just attracting tourists who want to order a Pizza for delivery. Do they have to implement all the different national systems? - PayPal "solves" that.

In Germany, there is "giropay" [1], which is a service offered by most banks. The Wikipedia article states that it's similar to iDEAL.

Giropay is some kind of federalized solution where you enter your BIC on a landing page and get redirected to the interface of your local bank to complete the purchase.

It isn't well supported, except at some unexpected sites like Ali Express.

[1]: https://en.m.wikipedia.org/wiki/Giropay

giropay is a merger of three different bank-developed systems. And it shows.

Because banks generally don't support all features, only the ones they already used to support.

My bank, for example, does not support person-to-person transfers, only online payment at web shops.

The Dutch are pathologically practical. Love it.

Every time I need to send mail I’m jealous of that whole “write 9 digits in a grid to serve as a stamp” system.

writting a code replaceming stamps do exist in Germany as well :P

That works as long as you need a standard stamp. It fails the moment you need to send a letter to overseas.

Oh I have no doubt the US is uniquely behind several countries on this sort of quality of life innovation!

What makes it "uniquely" behind as opposed to other countries that aren't part of that list of "several"?

Being dramatically richer than all of them, mainly

you can also be richer if you just tax people more. it's a solved problem

Every country has its flaws.

I googled "dutch number stamp" and got nothing. How does that work?

I've never used one so someone else can explain better, but my understanding is that you get an envelope and you can use your phone to pre-pay postage online (or maybe set up your card to be charged based on what's required?) and you'll get a 9 digit code back. On the corner of all the envelopes is a 3x3 grid where you write the code and that is read by the postal system as the stamp.

In Dutch: https://www.postnl.nl/versturen/postzegels/postzegels-kopen/...

You buy a code that you write down in the location where normally the stamp would be.

Just for fun, seems easily susceptible to a man-in-the-middle attack. Just take a postcard, copy their code, discard the original card, or just send the original later than the copy. :)

Yes, but then you are stealing mail. Which is bad. For a relatively small payoff.

stealing mail is also punishable with jail time basically everywhere. they take that stuff seriously

iDEAL is truly tremendous. I keep my Dutch Neobank account just to be able to pay stuff with iDEAL. It never fails and works like a charm. Never had a failed payment with it. I don't understand why Germany is incapable of implementing such an easy solution.

"I don't understand why Germany is incapable of implementing such an easy solution."

The main problem in Germany is that banks "for the masses" (oversimplified) are "state owned" or cooperatives. Both are organized on a city level. Both are notorious for not cooperating. Plus the state owned banks usually have politicians at the top (E.g. the major of the city the bank is in).

For a system that works across Germany you would need a high level of cooperation.

In the 90s when I was a Sparkasse ("state owned") customer studying in Baden Wurttemberg but having my Bank in Bavaria, I needed to go to Bavaria to get money and account statements every time, the Sparkasse in Baden Wurttemberg would not cooperate with the one in Bavaria.

Not sure, it might be an outcome of federalism which is (was) a way to prevent the 4th Reich.

I don't really buy it, the situation in Switzerland is similar but that doesn't stop bigger banks from driving innovation.

For instance if the Cash Group banks came together behind a mobile and online payment solution, the Sparkasse would need to follow suit.

> I don't understand why Germany is incapable of implementing such an easy solution.

Because the interpretation of cartel law and the banking structure makes that complicated.

They created "giropay" which is quite complicated as a dealer has to pick a bank to contract with and they get different rates and stuff as they couldn't simply create a shared company running it or something ...

I believe the Austrian equivalent is compatible with German banks, but somehow it never took off.

https://bluecode.com

Germany did that too, multiple times and nobody used them. So they all died. The only really successful system was the EC-Card, which for decades was as popular as Credit Cards in other countries. But it will be dead in some months for reasons, probably because it's too old school?

EC cards, when they first came out, were revolutionary and way better than the credit cards of old. Eventually, though they became increasingly unusual, mostly thanks to the internet (no way to pay with them there. They had a hidden creditcard-like number, but you would never know), and are now dying because enough banks have started handing out creditcardesque debit cards which work on the internet. Of course this also meant we lost some 20 years of digital advantage of an universal global payment system.

Lessons learned: Technical leadership is nice, but don't think once you are ahead, you'll stay ahead.

> way better than the credit cards of old

They were more secure (no surprise there). The lack of security was known, but the risk was with the vendor who generally accepted it as cost of doing business. With the more secure EC cards like with the new-ish chip-enhanced CC, the (lower, remaining) risk is with the customer. Not sure, whether that is 'better'.

I feel like we need to make a big overview map of what payment is like around the world.

Because I believe you. But I also have only ever experienced PayPal as an entirely unnecessary middleman. So I think there may be regional differences in play.

I can’t remember the last time I typed in a credit card number. Giving it to PayPal seems like a less secure option, given how free from consequences companies are. And the credit card company is completely on your side. Though maybe that’s because of local laws? Getting a chargeback through PayPal is pulling teeth and their fees are ridiculous.

As a customer, you can still use your credit card at Paypal and file disputes with your issuer as usual. The merchant just does not get your card number directly, which anecdotally many users perceive as an advantage.

As for German regional effects: Paypal allows payments via SEPA Direct Debit there too (~ACH), which are free but very risky for merchants. Many customers don’t have any online-usable debit card, so that is often their only way to pay online. Paypal takes on that risk for a fee.

I am in the UK.

As an anecdote - not passing on my credit card details is one reason why I use paypal and then pay Paypal by credit card to get the good disputes process and I trust paypal more than a unknown random place on the web. I now do prefer to use Apple Pay in this case as I trust Apple more than paypal.

I do make larger purchases with my credit card to make any dispute easier.

For plumbers and others who don't take credit cards I use the direct bank payment.

Many European countries have secure quick payment solutions which interface with the banking system without giving away sensitive information. All that I've used require you to use your phone or an OTP device/printed card to authenticate.

The downside is that it's not as fast as having username and password filled in like you can do with PayPal, and that these only work for the specific country.

SEPA, Google/Apple Pay, Klarna, a Debit Card from Visa/Master Card, the multiple Paypal-Clones which died one after another...in Germany you have many options. Just depends on the Shop which are actually offered and are working.

In Poland also:

- Blik: https://en.wikipedia.org/wiki/Blik (similar to payconiq in Lux, and I assume there are similar systems in the other countries)

- Pay by link: was very popular since forever in Poland. Seems quite safe, and lower fees than CC/paypall (I don't have a good wikipedia link in English, maybe it's called differently in different countries. The payment gateway asks you to log it to the bank—it redirects to the bank webpage, it's not scraping—and bank then asks you to confirm via app/sms and issues an instantaneous transfer). PayU is quite a popular gateway for that https://corporate.payu.com

Amazon Pay is very convenient.

There’s PayDirekt, the would-be homegrown PayPal alternative. Only nobody cares.

Thank you, I will check it.

Your browser doesn't save your card information?

For money transfers, here in Canada we have e-Transfers from every major bank.

For a small fee, businesses can verify their identity and it makes sending them money as simple as transferring money between your Checking and Savings accounts. For everyone else, your money is sent as an email requiring password verification.

It's quite popular. Most contractors I've worked with prefer it. However, it has been prone to theft arising from intercepted emails using weak passwords for money transfers.

Poland has BLIK, a system where you request on your mobile app "I want to get paid X PLN". You get a number. You provide this number to the one who will pay. They input it in their app, the app shows the amount, you confirm and the payement is done.

We have Paylib in France, i did not try it yet but it seems that they want to do something similar. It is just that this is France and it will be impractical, limited and painful - as our banking is usually.

SEPA Lastschrift is very safe, you can easily revoke any charge. So giving out your account number here is not a significant security risk. And otherwise credit cards and Paypal are the main choices. You can probably just save your credit card information in your browser or something if that's the only thing preventing you from using the credit card.

1Password (or even plain Keychain) can auto-complete all your debit/credit card numbers. But yes - I prefer not to type it in. For security reasons I am only entering cards directly if the website is using a bank payment gateway. Otherwise I am just generating a random one-use debit card through my bank app.

It's just very nice layer of abstraction. I don't want every shop I buy from to know which Bank I use or my credit card number, because that's sensitive information.

Also when my credit card number changes because my bank randomly decides I'm at risk for fraud I have to login to every service and enter my new CC.

In 10 year of Paypal usage I have never once had an issue with my account being locked. Yes there are some cases here and there of people, but personally I didn't have that problem and I just it a lot also for Craigslist etc. Never an issue. I didn't even have to contact Paypal support once.

And since it's very popular in germany almost everyone online has to support it or they are losing business.

No. If you use 1password or similar your credit card details are in one place only.

You do not allow merchants to save your credit card details.

PayPal has started serving me tons of captchas and verification SMS (sometimes multiple of each within less than ten minutes) that it has honestly become infinitely more convenient to use GiroPay and whip out my bank card + TAN generator.

In Europe we have working debit cards, so PayPal is redundant and hardly ever used.

??? the UK looooves paypal, both before and after brexit.

I love paypal, and I live in the UK. Paypal is essentially the default checkout option on most websites, and supported pretty much everywhere. It is very, very handy as a consumer, but never in a million years would I sell using paypal (too many horror stories about frozen account and kafkaesque support staff)

Yeah not my experience. Nobody in my social bubble uses PayPal when there is Visa/Master card with 3D Secure. No reason to. And after my experience with PayPal not even a will to work with that scam company.

I’ve never met anyone who has used PayPal in the UK. Why would you need to?

Not in Germany. Many large issuers still only provide debit cards that can only be used in stores and for cash withdrawals (Maestro or VPAY), and some even only domestically at that (Girocard).

PayPal fills exactly that gap for many merchants (by supporting SEPA Direct Debit, which is ubiquitous but has effectively no fraud controls or online amount pre-authorization).

I use a debit card / credit card for every online purchase.

I have probably used paypal twice? in the last 15 to 20 years in the UK. I'm not sure why I would want to use it outside of eBay, where fraud is apparently rife.

What? PP is huge in Germany. If they weren’t, this article wouldn’t exist.

Well, there is no way for person A to transfer money to person B using a debit card.

Paypal is indeed less use din Europe because we have wire transfers (that take three days, except if you get the "immediate one" which in France is premium (premium destinations (i.e. other banks), not price which is zero)

Ah, and we have cheques in France too. Yes, the paper ones.

Paypal is fairly common in France. It's less involved than SEPA, even when it's free and instant. Lydia has gained popularity recently and may replace Paypal for that purpose.

There's Giropay/Paydiret which is neat and offered by some small shops and even some bigger ones like Steam. Also, most banks support Klarna, which you can also use to pay without paying 30 days later or in rates.

Having to enter my card details have often stopped me from doing unnecessary purchase. That being said I memorised most of my cards and it takes not much longer for me to fill in a card payment form than log in to PP.

It’s only convenient until you’re locked out of your account with no recourse.

I thought Klarna was quite popular in Germany. Never used it though.

I don't know if it's popular in Germany but it's not like PayPal. It's more like a proxy for multiple payment methods as well as a billing and early-stage collections system. In Sweden we use Swish instead of PayPal, which is more like easy direct bank transfers using your mobile phone. Checking out with klarna allows paying with Swish. Normal bank transfers are also easy and free here but they can take a day or two to process, hence Swish (which is run by a consortium of the banks by the way.)

> It's more like a proxy for multiple payment methods.

That’s also what PayPal is. You can use PayPal to pay with many methods, including Klarna, GiroPay (which might be similar to Swish) etc.

I guess but the important difference is that you can't do transfers with Klarna but you can with PayPal and Klarna does invoices while PayPal doesn't. Also of note is that you can't have a positive balance with Klarna (unless maybe you overpaid for something.) I guess you're right though, they're both proxies but provide one or more of the sub-services themselves in-house, just not the same sub-service.

I thought the only reason to use Klarna is for payments by invoice, where they would do also a background check on you. Yuck.

How is the Wirecard investigation going? They'll get overwhelmed with the workload...

What does the Cartel Office have to do with Wirecard? That's BaFin's (and the courts') business.

The criminal investigation has been finished, Markus Braun and others have been sitting on trial since last December [1]. The political investigation by a special parliamentary committee has also been finished since mid 2021 [2].

The only one still running free is Jan Marsalek, probably he's being protected by Russia.

[1] https://www.tagesschau.de/wirtschaft/wirecard-markus-braun-p...

[2] https://www.bundestag.de/dokumente/textarchiv/2021/kw25-de-3...

There have been zero repercussions for government officials, yearning for a software giant in the GigantFAMily. And the fraudster swarms know that the honeydew of hope is still dripping, though hurt by reality not giving way.

Germany just cant get its stuff together softwarewise.

Would be better off, to subsidize die polish/chechoslovakian software giants and have them grow into germany. They are doing something right over there.

Ah the good old whataboutism.

(Wirecard is being investigated by relevant authorities, but unrelated to cartel office looking at others)

The cartel office is working financial fraud cases these days?

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