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You heard of Navinder Sarao?

You heard of Navinder Sarao?

Well, until this morning I had no earthly idea who he was either. But he is about to be extradited to US for having caused the 2010 “Trigger Flash fall” of the Dow Jones Industrial average. The online magazine Market Watch in their March 23rd article introduced Mr. Sarao as:

“The Hounslow trader accused of helping trigger the flash crash of 2010 sent 7.4 million “trade modification” messages – sometimes seen as a sign of abusive trading – on a single day, according to prosecutors seeking to extradite him to the U.S.

Navinder Singh Sarao’s trade modification messages on the CME market for E-mini futures sent on April 29, 2010, amounted to 42% of all such messages sent across the market, according to Mark Summers in opening arguments seeking to get Sarao sent to the U.S. for trial.

The U.S. authorities allege that Sarao’s trading of E-mini S&P 500 futures on the CME in Chicago contributed to the May 6, 2010, crash that saw the Dow Jones Industrial Average DJIA, -0.45%   fall 9% in half an hour before recovering.”

So you say what does SPOL has anything to do with Navinder Sarao? Well one of the objections against SPOL is the fact that it uses PayPal as a payment platform and hence this causes the merchant to not only pay merchant services charges but also PayPal charges. This is where Navinder merges with SPOL, you see there are thousands no millions of Navinders lurking around the world just itching to get their hands on your customer’s credit card information. If a guy from the comfort of his Mom’s kitchen could bring down the Dow Jones Industrial you think he cannot access the merchant services of your bank? And if he does who is responsible? You or the bank? I bet you that somewhere in the fine print your merchant services contract indicates that they have no responsibility toward the hacking of their merchant services. But by using PayPal, your company is assured of two things first is that PayPal executes thousands of transactions per day and hence has the wherewithal to plan for contingencies that thwarts attacks such as Navinder’s far more than any specific company with merchant services. And, if they are intercepted, it is not you the merchant that is liable but PayPal. This insurance policy just as any “insurance policies” has a cost associated and is not free but is well worth the cost. Secondly, in reality, PayPal is no more expensive than merchant services, it all depends on how much in form of transactions you as a merchant put through their system. The higher the amount the lower their per transaction fees becomes. So, the security and the ultimate reduction in cost that PayPal can offer make its usage by SPOL, a no brainer.

Now, you might say, why should we even offer online payment system to our clients let them just come by and pay as they have done for that last 100 years. Well the answer to that is, are you still selling 100 year old cars? And, with the new vehicles you sell do you not also introduce complexities that can make life a bit more complicated but far easier? What about that Internet thing? Remember it can allow Navinder’s into your life, but what else it awards you and are you willing to let it go just to avoid possible issues? It is very true that with each opportunity there are issues, it is up to us to mitigate these issues by choosing the best solution and SPOL is the one for automotive online payment system.


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