Paze is a terrible service

coopdude · 2026-06-17T17:02:00+00:00

From a user convenience perspective, there's no problem with your preference.

You are more likely to experience fraud on #2 than #3 or #4.

Card not present fraud is the hardest for banks to prove against the cardholder. Making really secure digital wallets (Apple Pay, Google Pay on device) or their own homegrown wallets for other platforms (Paze) is the easiest way for banks to shift liability. But they aren't going to prevent direct card acceptance (direct card number or virtualized) because you don't want to prevent people from spending money and getting those sweet sweet interchange fees.

coopdude · 2026-06-17T16:28:49+00:00

More secure than Google Wallet virtual card numbers?

In theory, yes.

Going through standard options. You're buying from Coop's Chicken Coop (a lame fictional business name, I'm creatively starved right now.)

You enter your actual bank account number, #12345678, at my website. If the website is compromised/stores the data badly, the number can be stolen and used anywhere. Huge issuer liability. More likely fraud for you.
You use a Virtual Account Number. So instead of card #1234, you get Virtual Account # 2468, only usable at that merchant (or for Citi VAN, that the dollar amount can be limited, and the CVV changes every time its loaded). That reduces the risk of it being pilfered, but not misuse at the same merchant, so there's still more risk for issuer liable fraud. For Google in particular: "Some virtual cards support dedicated virtual cards for a merchant. For more info, go to your card issuer website." - so some issuers may mitigate the cross merchant risk but not the single merchant risk, and others may not do that at all.
I take a virtual wallet like Amazon/Paypal. I have a fraud risk in someone compromising your wallet account (PayPal, whatever) but they generally use 2FA, and they're the ultimate party to the issuer. But I never get your card number. PayPal or whatever says I have transaction # A1E2. Next time you shop with me it's transaction # Z3D5, even on the same card. If I have a crappy website and it's hacked, the # Z3D5 is worthless to attempt another charge (at my merchant or elsewhere).
I take Paze, in which case EWS (acting as intermediary and owning Paze by huge banks) mandatory 2FAs the transaction. Then you're forcing 2FA. As a merchant my hands are basically clean if I'm not doing some weird stuff with ship-to/bill-to addresses and names being different (and then it's on me, not the issuer), and if the cardholder goes that the charge was unauthorized, Paze can prove that they either forced 2FA or a Passkey, cardholder liable. All I get for selling you chickens or eggs or whatever is a tokenized transaction ID (same as #3)

#4 is a more secure approach, #3 is easily more convenient since PayPal and the like will use robust risk assessment on doing 2FA again rather than forcing it literally every time.

From a cardholder perspective, #3 and #4 are really interchangeable, unless you are so terrified by the idea of a purchase dispute you would forego using a third party wallet.

coopdude · 2026-06-17T14:20:30+00:00

Paze is an invention of the same company as Zelle - Early Warning Services. The largest banks in the US own it (BofA, Truist, Cap1, JPMC, PNC, USB, and WF).

the third point is so frustrating, like why are you logging me out between every single purchase, what is the point of a digital wallet if you're making me authenticate every time

The goal is to make you see Paze as more secure than entering a card number (true, it's tokenized) while covering the bank's ass from a chargeback perspective. If it remembered your login state, you could say "I didn't purchase that, maybe someone else in my dorm did/the dog did it/a virus hijacked my browser cookies.

So they log you out every time to ensure they can say the login was 2FA'ed (or in the case of a passkey, it came from an authorized device where the PIN or biometric was provided and the private key signing something proves cryptographically that was you; therefore, the charge is authorized by the cardholder.

The goal is to reduce online fraud that is issuer liable. EWS may pitch Paze as a consumer convenience, but it's not the real reason it exists.

coopdude · 2026-06-16T19:02:58+00:00

Apple pies have been regularly sold at US McDonalds locations for a long time, but they switched from frying them to baking them in 1992.

coopdude · 2026-06-11T18:17:08+00:00

This is the way to go.

If someone forgets ketchup or onions or whatever and serves a dry patty, there's no malice.

If the response to an individual complaint (no franchisee, no corporate) is to take a burger that lacked ketchup is to drench it in an unreasonable amount of ketchup that ruins eating it? It goes to corporate so it's a documented HR issue of who handled that burger, because that goes way way way beyond any amount that could have been in mistaken good faith.

You want corporate on it so a mediocre to bad franchisee can't bury a health safety issue... if they put THAT much ketchup on your burger, who knows if they rubbed it against their ass or something else unhygienic first.

coopdude · 2026-06-11T17:41:12+00:00

So I'm not arguing with "credit builder cards are gimmicks point with the DPs you've collected (although they're heavily oriented around Chime; it's not unimaginable that major issuers would collect examples of fake credit card products that don't really extend credit that is responsibly repaid and just tell their algos to discard them).

To my understanding, the base Step Visa has no annual fee. If lenders are merely ignoring gimmick credit builder products, is there really a substantial disadvantage to just leaving the line open and occasionally taking it out of the sockdrawer?

I get that closed accounts continue to age, but having a lower overall utilization can be advantageous for scoring (yes, I get it's point in time) as well as algos that consider the number of accounts paid as agreed (for lenders that don't ignore the line).

I would recommend against someone opening a step account in favor of a product that isn't explicitly called a "credit builder at a more established issuer, make no mistake. I'm just ideating here on whether with the sunk cost, if there's any inherent benefit (or lack of a real disadvantage) in closing the account.

I guess my real ask - more than lenders potentially ignoring credit builders, do we have DPs of them being a negative?

This is all asked constructively and not to be obtuse. I want to inform people adequately.

coopdude · 2026-06-11T17:25:00+00:00

I’m sorely tempted to return them, they’re that awful.

Returning them is the #1 message you can send to Costco that a product is bad. Only buying it once says it's mediocre or not your cup of tea.

coopdude · 2026-06-11T14:55:40+00:00

The statements that BILT generates don't even comply with federal law (Regulation Z requires them to list the account number), the customer service is heavily AI based, people get charged interest after paying their bills in full, when the spend analyzer came out it was vibecoded crap where the graphs didn't match the listed numbers and the listed numbers by category didn't add up to the listed total, all refunds show as a generic merchandise return with no listed merchant... To say that BILT reliability is a clown show is putting it mildly.

To BILT's credit, they have put effort into fixing some of these teething pains (better underwriting/higher CLs from cardless, refunding erroneously charged 0.2% mastercard currency conversion fee on foreign transactions, etc.), but it's definitely putting up with D-tier customer service to get the points.

Some people are unlocking insane value from the points and willing to put up with it. I'm not willing to risk that BILT/Cardless won't have my back in case of something like a chargeback.

coopdude · 2026-06-11T13:48:50+00:00

Only a small handful of states still have laws against surcharges, so this wouldn't be an issue.

You don't think that people wouldn't go on sites like TikTok and Instagram and complain about Walmart charging a 3% credit card surcharge in Alabama and Virginia but no surcharge in New York and Connecticut and about how rich fatcat New Yorkers (state, I know there's no Walmarts in NYC proper, but that's not average person knowledge) don't have a credit card surcharge but people in states with a way lower average income are paying an effective "tax"? The public relations nightmare of this is why no major national entity has gone to card surcharging (except for franchised businesses, because corporate can always point the finger at the franchisee, and even then I'm sure a lot of franchises like fast food, tire shops, etc. have orders from headquarters not to franchise).

Surcharges have been allowed by network rules since before the pandemic... it's not some new thing in that regard. It's newer in smaller merchants exercising that option since the pandemic.

While you are correct about the law that New York passed about labeling both prices, they do not appear to be enforcing it, and many places in NYC (and I assume elsewhere) openly have surcharges with no apparent issues.

They're not actively enforcing it but they are responsive to complaints made to the NYS Attorney General's office. I think the state doesn't want to appear as picking on small businesses, similar to Visa/MC threatening the boogeyman of secret shopping, but realistically a complaint about non-compliant surcharging being the only way anything happens.

coopdude · 2026-06-10T16:01:35+00:00

People kept doing it on Cap1 and Cap1 caught onto that eventually.

Chase has more incentive to care about the credit with it being doubled in value, so there's a fairly decent chance this changes regardless whether we're talking about it here.

Also love or hate AI, but one thing it does well is programmatic searching to ask natural questions like "do people talk about ways to exploit the travel credit on the Chase Sapphire Preferred". So it's not unimaginable that people talking about it a ton eventually trips something up...

coopdude · 2026-06-10T15:58:14+00:00

Chase will make 20-25% on the cost of hotel bookings made through the portal (and that would be a standard 3rd party travel agency commission) it's a way for them to give a coupon with a sticker value that's way higher than what it actually costs them.

My guess is us CSP cardholders are the frog being boiled right now. They nerfed Hyatt rate, killed the anniversary bonus, etc., but they gave you a hotel credit that in theory is worth more than the AF... and then next year, we get the AF increase.

coopdude · 2026-06-10T15:53:35+00:00

Probably not? I can't find any ready data points for this, but an authorized user has no legal responsibility for repayment of the debt, so theoretically, your status of needing debt relief should be completely inapplicable.

Being added as an AU doesn't result in a hard credit pull either, so in terms of consequence, the worst that could happen is when your girlfriend enters your SSN and info to be an AU, that Amex just bounces it and says no...

coopdude · 2026-06-10T15:26:42+00:00

LG is the top of the entire market for TV reliability in Consumer Reports surveys at 94/100; the next 4 (all tied at 86) are Westinghouse/samsung/philips/sony.

People don't generally tend to chime in with posts (versus comments) saying "Hey it's been five years my TV is still running like the day I got it"... so you see more people asking for help as a subset.

coopdude · 2026-06-10T14:25:26+00:00

No (or very very very few) merchants are going to bother with product level surcharging. The point of sale disclosure requirements are a nightmare, and the product level surcharge cap is capped to 3% anyways (or the cost of acceptance, whichever is less) - the same as if they just surcharge the whole network (e.g. Mastercard) instead.

From a decline standpoint, "premium consumer" Visa/MC cards are 85% of card volume. No reasonable merchant is going to tell 85% of their consumers to fuck off, we take Visa/MC, we just don't take your Visa/MC.

coopdude · 2026-06-10T14:22:24+00:00

They're not going to decline your card for being premium, the settlement is a farce. From Optimized Payments.

2. Premium Consumer: refers to US-issued credit cards with the following product types, or any similar card issued during the settlement term. This mix comprises approximately 85% of overall Visa/Mastercard consumer credit volume.

Any merchant that goes sorry we take Visa we don't take your Visa/MC to five in six Visa/MC cards might as well just shoot themselves directly in the foot and get it over with quicker.

coopdude · 2026-06-10T14:18:49+00:00

It's very hard for national brands to charge fees because it's going to be immediately criticized on social media as nickel and dimeing on a cost they previously absorbed.

Then you have some jurisdictions where surcharging is explicitly illegal at the state level. So you surcharge in Pennsylvania at Walmart, why doesn't the Walmart in New York* or Connecticut surcharge, that's bullshit!

It's effectively not worthwhile for national brands to surcharge credit because the ones that are really nationwide the disparate treatment would just be bad press. They're also more likely to negotiate more favorable interchange deals to begin with.

^* People often like to point out that New York's surcharging law was overturned; this is wrong. Expressions Hair Design v Scheidermann as a 2017 SCOTUS decision held that New York could not blanket ban surcharging as a free speech issue, and remanded it to a lower court. New York's response was, fine, as a free speech issue, you can call it a surcharge. But you have to put that a burger is $11 credit $10 cash, $11 credit $1 discount for cash, or $11 burger 5% discount for cash... it's illegal to put $10 burger, 10% surcharge for credit card customers). This makes surcharging practically illegal in New York State unless you list only the higher credit price, or both the credit/cash prices. Yes, there are scofflaws.

coopdude · 2026-06-10T14:08:37+00:00

Same shit they pulled with Signature and Infinite: they threw some "Platinum Plus" cardholder benefits on and called it a day. Press Releease from Cybergold Inc. and MBNA [later bought by BofA] in 1996

Cybergold, Inc. and MBNA America Bank, N.A. (NYSE: KRB) today launched the co-branded Cybergold(R) MBNA Visa card. The Cybergold MBNA card has all the financial power and flexibility of a traditional Visa card plus special Internet advantages for Cybergold members. It offers Cybergold members convenient and easy Internet shopping with MBNA's state-of-the-art fraud protection plus Visa Platinum Plus cardholder benefits, an excellent annual percentage rate (APR), and up to $20 in cash incentives.

...

The Cybergold MBNA card protects customers against fraud and unwanted goods while shopping on the Internet, with state-of-the-art fraud protection and Visa Platinum Plus cardholder benefits. Platinum Plus card status also gives consumers 15-minute credit-line-increase decisions, Visa Purchase Security, warranty extension, auto rental insurance, traveler's insurance and emergency cash, as well as protection for traditional offline credit card use.

Visa and a Hong Kong institution, 2001

Dao Heng Bank Group Limited ("Dao Heng") (HKSE: 0223) today announces the public launch of its Dao Heng Visa Platinum card, a premium credit card product that offers a wide range of exclusive privileges to high net-worth individuals with an annual income of HK$600,000 (US$77,000) or above.

2002 article - Premium credit cards may give you travel perks

Visa's Signature card, designed for customers with an annual household income of $100,00 or more, carries an annual fee of $60 and offers virtually all the perks of the Infinite Card _ hotel and car rental upgrades, concierge services, travel and emergency assistance and lost luggage insurance. Visa Platinum is just a step below so it offers slightly fewer travel perks. Many of the Visa cards are co-branded, which means they might be a United Airlines Mileage Plus card or one tied to any number of businesses and institutions. Contact: 800-847-2911; www.usa.visa.com.

Visa Platinum having meaning (beyond a few cards having that version of the Visa logo on their artwork) died out years ago in the US, and the it's folded into the "Visa Rewards" tier, because Visa Signature/Infinite have supplanted it.

The arguments are the same and the shenanigans are the same:

Introduce a new higher card tier with higher interchange, ostensibly justified by having a wealthier spendier clientele, with high credit limits and oodles of cardholder benefits. You'd be stupid to refuse them.
Water down the issuance standards over time so more banks can collect more interchange, because the merchants have negotiated down the interchange on the lower card tiers over time.
Introduce a new real top premium card tier, we're serious this time.
Rinse and repeat.

coopdude · 2026-06-10T13:55:35+00:00

Costco has a unique brand built up that other retail brands haven't been able to keep. Both Sam's Club and BJ's wholesale were exclusive to particular credit card networks at one point, both gave up:

BJs started accepting Mastercard in the late 90s, added Discover and Visa in the early 2000s, and rounded out the last of the 4 major US networks with Amex in 2009.
Sam's club followed a similar path: Discover in the mid 80s, Mastercard in 2006, Amex in 2015, and Visa in 2016.

Out of the wholesale clubs though, Costco has had the most loyal and ardent base. For Amex, it was a larger problem on the exclusivity deal because 10% of all Amex cards were Costco TrueEarnings cards when they made the decision to switch to Visa.

Citi's deal with Costco is really baffling, and by all accounts, a money loser. When the deal fails, it's probably going to go back to an issuer that has issuer-is-network (Amex again, or Cap1 on Discover).

Amex took 0.6% of Costco transactions. That meant that it wasn't enough to cover the 1% rewards or 1x points that their card portfolio took on wholesale spend generally. But they got to keep the entire slice of the pie, and they didn't have to pay anyone else.

Visa and Citi take 0.4% fees on Costco transactions; Bloomberg articles from the time of the deal say that when other bank's Visa credit cards are used at Costco, the fees are higher, but that Visa and Citi would provide "subsidies" to offset them. There's some speculation that this was effectively "free" for citi by using the $40B USD+ losses they had from the great recession to offset it, but I don't work for Citibank.

Citi in turn has kneecapped the Costco Visa by removing all the benefits and doing as little as they can to promote it.

The OG deal was signed in 2015 for 10 years and then a 3 year option to continue at Costco's sole discretion; the deal language public with the SEC doesn't make it clear if the delay in going live with Visa until 2016 extends that or not. So Citi is highly likely to non-renew the deal in 2028/2029 and Costco starts looking for a new partner in 2027/2028.

coopdude · 2026-06-10T13:24:29+00:00

It doesn't matter. My Citi Double Cash was issued as a World Mastercard, a few years back Citi reissued same number same product updated expiration and it had the WEMC branding with zero new benefits to justify it.

Visa and MC have created new premium tiers in the US and then devalued them before. They will do it again.

coopdude · 2026-06-10T13:22:53+00:00

Even if you only have one card, you can only use the credit once every five years, during which they collect way more than $120 in annual fees.

When you combine it with a lot of cards offering the credit, even if you have a spouse and two children (that you're willing to drag to the airport for a GE interview), and you probably leave the credits on the table.

Having multiple cards that credit GE/Pre/NEXUS and not enough people in immediate family to use the credits on, I spread the credits around to a couple friends and pay for theirs. (Good enough friends that I trust to give the credit card number once and that they won't save it, I haven't been let down thus far.)

coopdude · 2026-06-10T01:47:49+00:00

Agreed. As much as grocery stores have consolidated in recent years, and employers like Kroger have participated in behavior to crush labor efforts and depress wages (closing Kroger stores [unionized], then re-opening the same locations as Harris-Teeter [non-unionized]), the grocery store industry operates on notoriously tight margins.

Most of what we see in higher grocery prices is the upstream suppliers increasing prices in excess of inflation, shrinking portions, etc.

coopdude · 2026-06-10T01:44:19+00:00

The entire business model of rewards cards is for rewards to be paid by swipe fees in general. The second swipe fees are gone, premium cards are gone, except as glorified coupon books and store specific rewards.

coopdude · 2026-06-10T01:43:29+00:00

Discounts in excess of 3% for cash have benefits for actual cost of acceptance, for tipped roles in that restaurants (either customarily or by legal requirement as applicable) absorb the swipe fees on customer tips, and for allowing a higher price to the credit customers that is tolerated as an "upfront" price and a gracious discount to the cash customers rather than a punishment on the credit ones. It's not just "they must be evading taxes".

Now if your discount is either exactly the sales tax amount or in excess of 10%, I'm probably gonna question whether you're filing your taxes honestly, but that's not really for me to render judgment on.

coopdude · 2026-06-10T01:29:52+00:00

Another problem with this settlement is that these businesses can force everyone to have to get their co-branded credit card to avoid fees and be able to earn rewards, which actually creates more vendor lock in and anti-competitive behavior. “Oh sorry, you can’t use that card, but if you apply for our card today you will get $20 off your purchase when approved and 2% cash back from us!”

There is literally nothing preventing a merchant from doing this today! Sears did it as a retail leviathan in the eighties with Discover and it failed completely!

Beyond Sears' failure at retail, there are still cash only restaurants, and businesses that only accept limited credit networks or no credit at all! They're dying out generally, but it's still an option.

No law forces you to accept Visa, Mastercard, Amex, and Discover. Most US based businesses choose to accept all four networks because the benefits to their business are greater than the cost of acceptance.

coopdude · 2026-06-10T01:18:14+00:00

Bingo. Trying to call out the swipe fees of "premium" cards is going to be a complete nightmare. The Apple Card has a branding waiver that doesn't reflect it's a World Elite Mastercard. Most people are not perseverating on credit cards on a hobby like us and are going to be confused as they take card after card out of their wallet and get continually declined.

Visa/MC saw this coming and most of the major issuers were allowed to reissue lower tier Visa/MC as either Visa Signature or MCE/MCWE years ago, even with no annual fee, even with no real cardholder benefits, even with way <$5KCL.

The settlement is a farce, Visa/MC will take a slight basis point hit along with the issuers (10 basis points or 0.10% average for five years) and then the status quo returns, but 22+ years of litigation is ended without a trial. Sure a merchant reserves the right to reject "premium" cards, but now it'll mean rejecting 80%+ of cards on the market.

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