racoma.com.phJ. Angelo Racoma on technology, economics, writing, problogging, and getting things done

One of the benefits of blogging for advocacy is the attention one gets from the movers and shakers. My being part of the PayPal for the Philippines campaign has caught the attention of execs in the electronic payments industry, as well as business owners who are into e-commerce (either planning to start selling online, or already have ongoing e-commerce setups). In fact, whenever I attend EBs and blogger get-togethers I’m usually referred to as the PayPal guy. It’s good to be identified with something.

I had dinner–and a few beers–with the top honchos of YES Payments last night to discuss the possibility of their offering P2P e-payment facilities in the country. This is my second meeting with them, so far, and it was great that we were able to exchange ideas freely. I related the needs of the freelance/problogger/developer community in the country, and they told us about the issues that e-payment providers continually face in the line of their doing business.

It’s All About Risk!

The foremost concerns of any business doing e-payments are security and fraud. When money is involved, there is always the chance of one party defrauding another party, or one party defrauding the system itself. So there is always risk. And the issue is determining which party bears the risk, for the system to work. In some cases, it’s the seller that bears the risk. In some, it’s the operator of the e-payment facility.

Fraud can be perpetrated a number of ways.

* Buyer uses stolen card/card details. Card owner disputes. Chargeback is paid (paid back by seller). If the seller has already sent the goods, it’s his loss.
* Seller does not send the goods or goes under. Card owner disputes. Chargeback is paid by the facility. It’s the facility’s loss.
* Buyer uses legitimate card to pay for transaction. Seller sends the goods. Buyer receives the goods, but claims otherwise. Buyer files a dispute. Seller pays chargeback thru the facility. It’s the seller’s loss.

There are even more ways–don’t get any ideas from me! The point is that there are loopholes that can be exploited. So there the system has to consider the trust factor.

For the most part, dealing with the risk is a big headache to the e-payment facility because of regulatory requirements. I never realized that the banking system asks so much of these companies–there are big guarantees, there are limitations, and there are requirements for compliance with several laws, both local and international. And even the card companies like Mastercard and Visa require a lot, such as security of transactions, regular auditing and subscription costs–something in the range of $15,000 per year (or is it monthly?), which, while affordable to big companies, can be a steep amount for small players.

Social Engineering

On top of these risks, there is one difficulty faced by e-payment businesses particularly in countries like the Philippines without a strong judicial system. Fraud is not so difficult to detect. YES cites cases where fraudulent transactions were flagged, but allowed to push through so the perpetrators can be caught in the act. The problem is once the criminals were caught, the inefficient and corrupt judicial system was not capable of warranting adequate punishment.

Hence, perpetrators can expect be let go with just a slap on the wrist. I can also imagine cases where either the judges or the police personnel could be bribed.

We come back to the issue of risk. E-payment facilities may not be so keen on setting up shop here because they know the risk of fraud is high. Even worse, the risk of fraud not being properly addressed by the law is even a bigger threat. Fraud can be minimized if the legal system is good enough to be a deterrent to people planning to commit crime. But if one knows the system can be gamed, then people will go lie, cheat and steal their way to getting a fast buck.

A Problem of Circularity

So which came first? The chicken or the egg? (Sorry for using a cliché–it sucks, I know.)

I earlier made a bold claim that having good e-payment facilities here in the country–particularly PayPal–would be beneficial to the Philippine economy. However, it turns out that most players (probably PayPal included) would only be open to servicing the country if they can be mitigate or minimize the risks of fraud.

Perhaps for large players like PayPal it’s a bit easier. For small players, it could be a challenge.

Facilities for SMEs and Individuals

YES is considering opening a facility for P2P transactions for the purpose of business and commerce. While they don’t have such a system in place right now, they do have YES Payments for SMEs and YES Pinoy for remittance. None of these services can be used by individuals like myself for receiving payments for goods or services rendered, though. YES Payments works for businesses (well, this does not preclude individuals or groups of individuals from registering as a business). YES Pinoy, meanwhile works for P2P transactions between people with existing relationships–you have to prove you’re related to the person sending money, whether he/she is a family member, relative or friend.

I had been mentioning existing services that could do P2P, like Xoom, which fellow problogger Abe has been recommending, and which I’ve also been using. YES is positioning itself as a strong player in the country because of its presence and support. They actually do have an office here, and they do accept support calls. I think that’s an advantage. I actually tried calling Xoom support once thru their 1-800 number, but since they’re based in California, their office hours are quite off when calling from the Philippines.

What’s Next

If–and once–YES gets their planned P2P service up and running anytime soon, would there be people willing to be part of a test group? Just tell me, so we can make the necessary arrangements.

As for PayPal for the Philippines, it’s a continuing advocacy. PayPal may have already set up here, but it’s still very limited. We can only use the service to pay or send money online, and not receive (not even to load up the account). We’re still pushing for full functionality. If you have not yet signed up, please do so. We would also appreciate any support (such as linking to us and/or displaying our banners).

I’ve been offline since the morning of Thursday, September 28th, 2006 due to the typhoon Milenyo. Our power was cut off 7:00 a.m. and the phone line came down a few hours after that. I just heard this evening that the power and DSL connection are already up, so I can hopefully be able to get online later this evening. I’m just checking up my email inbox to see if I missed anything important.

Isulong SEOPH

I’m at Ortigas, by the way, having some coffee and dessert in the aftermath of the Isulong SEOPH contest awarding. Our entry placed fifth!

Too bad we didn’t get to win the iPod Nano raffled off, though.

The crowd at the awarding wasn’t the usual blog meetup crowd. Well, okay, it was about 50% of the bloggers’ crowd, and the other half comprised the SEO people who were (likely) not really into blogging.

I’ll write about this later on, with some pics to boot. Right now, I’ll be enjoying a cup of coffee and some cake with my lovely wife.

(Just had to get online after three days’ being off the grid.)

Update: No power again!

Looks like I spoke (or wrote) too soon. Only a few hours after power was restored, it’s down again in our area. Must be some transformer that overloaded. Am now on battery connecting via dialup (trying to get in touch with Meralco via their website, but to no avail!). Sigh.

I’ve been using this nifty feature for quite some time now, and I think people will be interested, especially those who want to save up on telephone costs. Do you know you can sign up for a US and/or UK-based number that will route calls to your computer thru VoIP?

It’s as simple as signing up for an account with FWD, downloading a SIP-enabled VoIP client, and signing up for a DID (direct international dialling) account with IPKall or CallUK.

Earlier this afternoon, I perused a copy of the Philippine Internet Review: 10 years of internet in the Philippines (1994-2004) (thank you for the complimentary copy, Janette!). I haven’t finished up with the whole thing, but the writeups by Janette, Migs, and Danny (and as well the other writers) were all very enlightning, so far. However, one thing prevailed in my mind while reading: Where was I during all this?

I have always considered myself to be at the forefront of technology–or at least I try to keep abreast of whatever’s new and whatever’s happening. Back during the heyday of the BBS, I was quite active in the community (I even operated my own BBS and started a Fidonet-based network). When the Web as we know it was young, I also tried to get in the scene, being active in forums, message groups, and trying to learn Web markup.

Of course, I didn’t get anywhere near what those featured in the book had accomplished. And somehow, I think I never will, simply because I’d rather not be in the middle of things–I’d rather work behind the scenes, or even observe from the outside, looking at things from that excellent vantage point. Better perspectives? Probably.

In the online world and the Internet-related industries, I believe there are influential and accomplished people who are, and will be, prominently featured as movers and shakers. And my hat’s off to them. However, things tend to happen simultaneously, and there are also important things that happen in the background, behind the limelight, and on the sidelines.

I’d rather not forget the contributions of everyone else, though. In this world in which everything is connected, everyone has a part to play after all. We’re one big community of creators (and consumers). That’s probably a better definition of “World Wide Web.”

I know some people who truly are movers and shakers, but would rather not be named, and would rather remain in the sidelines, content that the work they begin meets success at the hands of others. They’re still truly the ones at the helm of everything, though.

It’s like being a covert operative connected to a group of other similar people within a super-secret organization–trying to shape world affairs without being noticed.

And in a way, I feel that I’m doing the same, in my own small ways. But then again, the smallest of snowflakes can start an avalanche.

So here’s to ten–or rather, twelve–years of the Philippine Internet!

Admit it, you’ve violated your service provider’s (email, hosting, blogging, photo-hosting, etc.) terms of services one time or another.

Nude photos on Flickr. AdSense on mature websites. Obscene photos on wiki encyclopedias. Corporate blogs on personal blogging services. We’ve seen ‘em all. Sometimes we click that feedback link and report the offense to the appropriate authorities, but in most cases, we just turn a blind eye. In most cases, after all, one wouldn’t expect a favorable response timely enough for our taste. Or perhaps we do enjoy the websites or content themselves, and would rather have them online than not.

I’d say it’s a bit more complicated than just “good” vs. “bad,” or even “right vs. “wrong.”

… the difficulty with ToS compliance is that we live in a world where companies tend to be biased and users tend to abuse–slightly or unknowingly, at least. Unlike the Force, which has a dark side and a light side, it’s a bit more complicated with all the in-between grey areas.

Quite a lengthy post over at ForeverGeek. Enjoy!