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PayPal faces new antitrust lawsuit claiming it unfairly stifles competition with Stripe, Shopify and more

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PayPal has been hit with a class-action lawsuit by consumers represented by law firm Hagens Berman alleging that the fintech giant’s anti-steering rules stifle competition against lower-cost payment platforms such as Stripe and Shopify.

Specifically, according to an investigation conducted by the firm’s consumer rights attorneys, PayPal has subjected consumers to excess charges when purchasing from online merchants that accept PayPal or Venmo. 

The suit states that PayPal’s merchant agreements, which all merchants must sign to accept payments via its platform, leads to consumers paying more to make purchases. The attorneys charge that “if PayPal’s agreements were transparent, consumers would quickly see a price difference between PayPal and Venmo and its competitors.”

Specifically, per PayPal’s anti-steering rules, if a retailer accepts PayPal or Venmo payments, they agree not to offer any discounts or inducements to persuade consumers to use other payment options that have a lower cost. These discounts are treated as a “surcharge” on PayPal transactions and prohibited by PayPal’s anti-steering rules.

Merchants also cannot tell customers that other payment methods are more cost-effective or preferred, according to the complaint, which was filed in the U.S. District Court for the Northern District of California. Merchants are also not allowed to present other forms of payment earlier in the checkout process.

For example, the attorneys say that without PayPal’s anti-steering rules, a merchant could charge $5.83 for a box of Kleenex when PayPal is used as the payment method, and less than $5.83 when the consumer paid with credit card or other payment. Or, a merchant could maintain the same $5.83 price but provide consumers with a discount when they paid with a method other than PayPal or Venmo. 

“Either way, the price differential would result in consumers paying lower all-in prices,” the lawsuit says.

Calling the policies “draconian” and “illegally anticompetitive,” the attorneys compared Pay Pay’s anti-steering rules to those that Visa and Mastercard used to impose before they were sued by the Department of Justice in 2010.

In a statement, the attorneys representing the class said: “Consumers end up paying more for all transactions as a result of PayPal’s policies and industry-high rates. PayPal generated total revenues in 2022 exceeding $27 billion, most of it coming from these fees.”

Per the firm’s lawsuit, more than 400 million consumers have PayPal accounts, including 75% of all Americans. Nearly 1 million U.S. e-commerce websites accept PayPal as a means of payment, and PayPal processes 41 million transactions daily.

“If consumers were allowed to see behind PayPal’s pricing veil, they would see a clear and distinct difference between using PayPal and Venmo to complete their transactions and using its competitors,” said Steve Berman, managing partner and co-founder of Hagens Berman. “For a service named for its friendliness.”

TechCrunch has reached out to PayPal for comment but had not heard back at the time of publication.

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Grifin’s new model can automatically invest your money as you shop

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Investing app Grifin today officially launched its anticipated investing model called “Adaptive Investing,” which enables you to automatically invest in your favorite brands that you frequently shop from.

Grifin was founded in 2017 with the hope of making investing less intimidating and normalizing it for people who aren’t that financially savvy. To date, Grifin has raised more than $11 million from a notable list of investors, including TTV Capital, Rise of the Rest, Gaingels, NevCaut Ventures, Mana Ventures, Sidecut Ventures, Miami Angels and Playtap Media Ventures, along with Witz Ventures co-founder Austin Hankwitz and GGV Capital managing partner Hans Tung. The company says it sees about 20,000 unique new app installs per month.

Grifin’s new patent-pending technology is an evolution of its original model, which follows the premise of “Stock Where You Shop,” giving you a chance to explore the intimidating world of investing by aligning your shopping habits with stock choices.

“Investing, and even having a healthy positive relationship with money, is an incredibly difficult thing to do and achieve,” co-founder Aaron Froug tells TechCrunch. “The current system simply isn’t geared towards the individual, even with mobile access and 0% commission apps claiming to ‘open up’ investing to all. It still requires a lot of emotional energy, confidence and an understanding of how investing works. Most people still don’t feel like they have enough money to get started and even the most financially adept people I know don’t know what is inside most ETFs [exchange traded funds]. All of it is cloudy and complicated. None of it is centered around the individual.”

Image Credits: Grifin

The Adaptive Investing model aims to give users more flexibility by integrating new functionality into the app, including the ability to pause automatic payments, increase/decrease how much you want to spend and manually invest more money in a company. It also introduces a “Secret Cash” function, allowing for non-public purchases and putting more money away as cash for their future.

“This patent-pending technology builds on the original premise by integrating new functionality to allow for a more intuitive and adaptive approach to investing, centered not just around people’s daily spending habits, but how much they want to invest,” Froug adds.

By default, Grifin automatically invests $1 per transaction. For instance, when you buy a cup of coffee at Starbucks, the app withdraws $1 from your bank account, and you get $1 of SBUX stock. You can also manually increase the investment amount to a maximum of $99.

Image Credits: Grifin

However, just because you enjoy a certain brand, it doesn’t necessarily mean it’s a smart investment. Grifin now added a new “Disable Company” feature, allowing you to stop or avoid investing in certain companies. There’s also an option to pause your investments for a week.

“We are also keenly aware that just because a person spends at a specific place, they might not want to invest there… By investing in small amounts, as low as $1 at a time, the aim is to help people to learn to navigate the world of investing without incurring too many negative consequences if they don’t get it right,” Froug says.

Plus, Froug argues that Adaptive Investing reduces the impact of single-stock exposure since it encourages a diverse profile as consumers usually spend money across a wide range of companies — phone/internet bills, gas, monthly subscription services and so forth.

“I’ve been personally using our app for a little over two years and I’ve invested in 115 unique companies,” he notes.

Additionally, Grifin is planning a redesign of its app, which will include a premium version as well as an AI chatbot to help people learn how to invest.



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Google Pay takes its QR soundbox to small merchants in India after trial run

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Google said Thursday it plans to roll out the SoundPod, its portable speaker designed to instantly validate and announce successful payments, to small merchants across India over the coming months. The Google Pay expansion in India, where the company is among the mobile payment market leaders, comes even as the firm winds down some of its payments apps in the U.S.

The company, which began a limited trial of SoundPod last year, received positive feedback during the testing and helped merchants reduce the checkout time, Ambarish Kenghe, VP of Products for Google Pay, wrote in a blog post.

The miniature jukeboxes, colloquially dubbed “soundboxes” domestically, have witnessed wide adoption in India, enabling merchants to find respite upon receipt of remuneration and contest any illegitimate claims.

Financial services firm Paytm currently leads the soundbox market and PhonePe is also increasingly expanding its device. More than 20 million merchants in the country already use one of these boxes, which industry insiders estimate costs about $18 to $20 to make. (Incidentally, Paytm is currently “fighting for its survival” as it navigates regulatory clampdown.)

The soundbox was invented to serve small Indian merchants unable to afford regular point-of-sale devices but accepting of UPI payments. (UPI, a payments network built by a coalition of retail banks in India, has become the most popular way for Indians to transact.) Now more popular than Visa, Mastercard and Amex combined, the devices last year prompted the payment giants to look at ways to take advantage of their reach.

It has also evolved into a lucrative subscription model over time as various players impose subscription charges on merchants. The real allure of the soundbox, according to one industry insider, extends beyond its auditory alerts — it provides invaluable insights into merchant behaviors, facilitating the offering of loans based on this data.

Google Pay is offering the SoundPod at a minimal cost — levying a one-time fee of $18 for one year, or a one-time fee of $6.06 per day for 25 days in a month. The company said merchants who use SoundPod to process 400 payments in a month will get $1.5 in cash back.

“To be able to play a role in India’s digital payments story is a matter of deep pride for us, providing invaluable lessons on how digital transformation happens in tech-forward societies, and we continue to stay deeply invested in this journey for the long term,” added Google’s Kenghe.

Reliance, India’s largest firm by market cap, also began testing a similar device at its campus last year, TechCrunch earlier reported. The company confirmed the device in a subsequent earnings call and said it plans to soon launch it to the market.



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NASA Opens Applications For Yearlong Simulated Mars Mission; Here’s How You Can Apply

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NASA has announced an extraordinary opportunity for those seeking extreme challenges: the chance to participate in its second yearlong simulated Mars mission, the Crew Health and Performance Exploration Analog (CHAPEA 2). Scheduled to commence in spring 2025, the mission will immerse four selected crew members in a 1,700-square-foot 3D-printed habitat located in Houston. Interested individuals can apply on the CHAPEA website until April 2.

Although it’s a paid position, NASA has not disclosed the compensation details.

The Mars Dune Alpha habitat at NASA’s Johnson Space Center mirrors the harsh conditions and limited resources future explorers may encounter on the red planet. Volunteers for CHAPEA 2 will engage in habitat maintenance, crop cultivation, and various other tasks during their tenure.

Additionally, the habitat includes a 1,200-square-foot sandbox for simulated spacewalks.

Applicants must meet specific criteria, including being US citizens aged 30-55, proficient in English, holding a master’s degree in a STEM field, possessing at least two years of professional experience, and having either a thousand hours of piloting an aircraft or two years of work toward a STEM doctoral program.

Certain types of professional experience may also qualify applicants without a master’s degree. CHAPEA 2 marks the second of three planned missions in the program, with the first launched on June 25, 2023.

SEE ALSO: Early Look At iOS 17.4: Easier Battery Monitoring, CarPlay Gets An Upgrade And More



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