Wednesday, January 30, 2013

Facebook Quietly Tightens Its PayPal Payout Policy, Now Requires Extra Authentication To Use It

The link to the full story is here

As Facebook continues to build out the App Center and its overall business as a platform for third parties, it’s also tightening up how payment policies work within it. In one of its latest moves, the company has changed how it pays out to PayPal accounts for new (not existing) developers who select that option. Specifically, Facebook now requires extra levels of authentication for new developers using PayPal, similar to what is required of those who ask for payouts to large emerging markets like China, India, and Brazil as well as some mature countries such as Australia, Japan and Norway.

The extra authentication comes in the form of identification such as incorporation papers for the developer’s business or photo IDs, and is in line with what Facebook requires for those who request to be paid directly into bank accounts in the same list of countries.

As I understand it, the change has been made to help mitigate risk on payments out to those countries and help build out the credibility of the platform — rather than as a move to restrict payments via third parties, or in response to reported problems, or as a precursor to any moves for Facebook to launch its own payout service.

On the latter point, Facebook declined to comment on whether it planned in the future to take on any of the payments services that eBay-owned PayPal currently handles for developers, but getting security right and risk down on the payout service across the whole of its geographical footprint would be essential if Facebook did decide to pursue something like this.

Facebook holds money transmitter licenses in several states in the U.S., as well as in individual countries internationally. These are required for companies that accept and transmit electronic currency, and so moves like this one are often made to get in line with regulations around those licenses. Other companies that hold such licenses include Amazon, Google and PayPal itself. A money trasmitter license is also necessary if Facebook ever did want to get into payments competing against PayPal.

The extra authentication is required for all new developers using PayPal, regardless of what country they are coming from. This is in line with what Facebook requires of developers when they ask to be paid into bank accounts in certain countries. That full list countries is Argentina, Australia, Brazil, China, Guadeloupe, India, Indonesia, Israel, Japan, Malaysia, Mexico, New Zealand, Norway, Philippines, South Korea, Switzerland, Taiwan, Thailand and Turkey, as well as the French regions of Guiana, Martinique and Reunion.

No comments:

Post a Comment