Hacker News Reader

Comment by kevinchen | Hacker News Reader

I know how it used to work -- I've been following Square from the beginning. I just don't think it would cost that much to outsource verifying a DL and bank statement that I upload to their website.

View on HN

"I am sorry, but our automated verification system cannot process your information, if you wish to continue, we would need to bill you a 25 dollar verification fee to cover additional information gathering."

Its certainly better than their response.

Their response could be better, but you can bet that one would result in an HN post complaining about it too.

That sounds great. Bill, wait for money, and return it after the identity is verified?

Well, if their identity verification services are a sunk cost, then no, don't return the money.

If they verify the identity and know they are going to make it back in fees or however square does business, then sure.

This does not solve the problem "Fraudsters will appeal their denial, happily pay the $25 fee using a stolen credit card, and then skip town with their first $X,000 in payments."

If the fee is to pay for better checking, then it's a fake $25 payment that results in a denial. And in this case square is still accepting them to make payments but not receive them, so there should be no problem with the $25 bouncing. In the general case perhaps they could demand cash for the verification fee.

You'll generally not find out that a credit card was used for a stolen payment until weeks after the payment goes through. At that point, it's too late for Square.

Sorry did a bit of editing as you replied. But I think you misunderstood the idea. The $25 is not to prove them trustworthy, it's to incentivize square to do a better investigation into whether someone is trustworthy.

It doesn't matter very much that someone could use a stolen credit card for that $25 payment, because square would deny such a person during their deeper investigation and lose less than $25 dollars total. And there is little reason for the criminal to do this because it will get one of their nice card numbers blocked faster.

Or ignore the second paragraph and charge cash for the service of doing a better investigation with responsive customer support.

$25 gets, what 1 or 3 hours of unskilled labour? How good investigating can that get you?

Again, fair argument, the 25 dollars was just me throwing out a number. If you want to get better identity checking the underlying idea is you can push the burden of cost onto the user and make them pay for it, because they are going to make money for themselves by using your service.

So what would be a fair cost? $1,000? Imagine what this blog post would be like with that 'cost': "Strip won't let me sign up unless I pony up a shake down fee of a grand!"

You can automate the DL verification process using Jumio. You hold your DL in front of your computer's camera, Jumio reads the info, and verifies the information. IIRC, Western Union uses Jumio for this very purpose.

...what? I as a consumer would not trust handing over any identifying information to some paid-by-hour/contracted schmuck in a internet cafe in Asia.

Of course not, but you might trust them to the same verification outsourcing companies that already handle your identifying information whenever you apply for a new job or sign a new apartment lease.

Reply on news.ycombinator.com