PayPal to Roll Out Buyer Vetting Service
In a move designed to attract more online sellers to accept its virtual payment service, PayPal this year plans to roll out a voluntary service designed to warn merchants if a transaction presents a fraud risk.
Merchants who adopt PayPal's "payment review" service -- to debut in beta form this summer -- would be alerted if a certain transaction raises red flags. PayPal then would ask the seller to delay shipping the item while PayPal reviews the case. If PayPal ultimately deems the transaction to be safe, sellers would be covered 100 percent for any fraud that should stem from the transaction. The service would be available to all merchants who accept PayPal, not just eBay sellers.
In an interview last Thursday, PayPal Chief Information Security Officer Michael Barrett said the verification process will be a speedy one. "We believe it's safe enough so that if anything does go wrong with it later, we're not going to hold the seller's feet to the fire."
Barrett said PayPal soon may decide to expand the rollout of its "security key," a small key fob that every 30 seconds or so generates a random, new six-digit passcode, which users are required to enter in addition to their user name and password. PayPal currently sells the optional tokens for $5 each, but Barrett said the company is strongly considering giving them to people whose accounts have been hijacked.
Update, 3:25 p.m. ET: An earlier version of this blog post incorrectly stated that the PayPal security keys are free to business account customers. That is no longer the case: Late last week, eBay began charging all customers a $5 fee for the tokens.
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