FriendlyPay: An Interview With Timothy Thomas and James Holland
Today I am interviewing Timothy Thomas from FriendlyPay and his associate James Holland.
(Q) When was FriendlyPay established, and what were the aims of the company at that time?
It was established in 2003 by Timothy Thomas of Canada. In the web marketing arena there were 3 dominant players; Paypal, Stormpay and Intgold. Paypal had been around long before this. The biggest complaint at the time was the practice of e-currency companies to suddenly and without warning lock their member’s accounts and freeze that member’s funds. Many times the member never got back their money and it was confiscated, with no legal means of pursuing the e-currency provider to get it back. Members simply lost their money.
We recognized this unscrupulous behavior and how they were allowed by governments to get away with it. We set out to never have this occur and treat our members with respect and honest treatment. In short we sought to provide fair and honest service to web marketers, and never treat them in such a way.
(Q) If I open a personal account for sending money to friends… and my friends are all over the globe, how much will I be paying in transfer fees to send others personal money?
As a free member, sending to other FP members is free to the sender, the receiver is charged a 1% fee. As a paid member, “Low Fee” account member, it is free to send or receive. However, we make it possible for a member to send money in many formats. As a member you would be able to convert your dollars to 8 other forms of currency, including E-Gold, and transact funds to international associates this way. We accept members from all over. If there are any countries we do not allow they will be listed in the terms and conditions.
(Q) Is that fee cheaper then most of your competition?
Yes. Most are around 2.9%.
(Q) Who would you consider to be your main competition and why?
When it comes to payment processing, PayPal. Since they have been around a few more years and have secured this arena, it does make it tough to get in there, but we are. What we have that PayPal does not is the E-currency exchange. We allow members to deposit and withdraw by way of many other E-currencies such as E-gold, E-bullion, Pecunix, Liberty Reserve, 1MDC.
(Q) I see that Friendlypay offers its users a very nice escrow payment option. This type of protection should be popular with sellers. Can you tell me more about this feature?
Escrow is a standard escrow service. If you are the one to send the money then only you can approve it be completed to the receiver. However only the receiver can cancel it. If need be FriendlyPay can step in as a 3rd party to help settle any dispute.
(Q) The company is based in Canada. What currency are the account denominated in?
In US or CAN dollars.
(Q) Account holders can withdraw funds from a FriendlyPay account into any variety of other digital currencies including: Liberty Reserve, e-gold, e-Bullion, 1MDC. Do you also offer the withdrawal of funds by any other methods?
You can withdraw funds to your US or Canadian bank account. Or by check and Wire.
(Q) Do you offer direct withdrawal to a US bank account?
Yes we do, and this is a favored feature to our members. Our members can link direct to their US or CAN banking institution and perform direct deposits or withdrawals. This combined with our exchange functionality makes it especially easy to earn money in other forms such as Egold, and convert those earnings into US or CAN dollars that can be deposited to the member’s bank acct.
This has always been a particular problem for web site owners who are not earning large enough sums to use a direct merchant account with the major credit cards. They choose the alternate forms of ecommerce to make sales but are forced to go thru extra trouble to convert that alternate income to dollars.
(Q) If I were to open an account, I’d probably choose the ‘Low Fee’ account because I’m a cheap guy. Besides lower fees is there any difference between the ‘Regular Account’ and the ‘Low Fee Account’ ?
No, not much difference. The same functionality is present for both types of accounts, the difference is in the cost of each function. Someone who expects to perform many transactions with FP is much better off to go with the paid account because it saves them money in the long run.
(Q) I’m very familiar with UseMyBank, which is a Canadian outfit that offers the direct bank account payments in Canada. Is FriendlyPay similar to UseMyBank?
In a way we are, as we do allow Bill Payments, however we do not offer debit card payments (interac online) as that is not secure enough for us.
(Q) FriendlyPay offers a ‘Bill Pay Feature’ is that popular with your users, is this available outside of Canada?
NO this is not available outside of Canada but we hope to soon.
(Q) From your web it says that account holders can ‘verify’ a bank account. What does it mean to ‘verify’ a bank account and what is required?
This is necessary to validate the identity of the FP member if they wish to link to a US or CAN bank. This involves sending FP documentation that substantiates the member’s identity. Most online currency providers and banks with this kind of access require several documents of current identity such as current phone or utility bill, photo copy of license or Soc. Sec. Card, and similar type verification documents to make sure the applicant is who they say they are.
(Q) Does FriendlyPay have an Anti-Money Laundering policy?
We make every effort we can to put in policies. If using your bank account or requesting a check withdraw you do need to have a verified address and name on the account. We ask for photo ID by way of Passport/Driver Licence (sometimes both), as well as some form of address verification like utility bill. We do what we can to verify the person.
(Q)What guidelines do you follow in order to prevent suspected money laundering, terrorist financing, and threats to the security of Canada (Fintrac)?
We do report known fraudulent activity to the appropriate division.
(Q) Buy Now buttons have become extremely popular with digital currency merchants. I’ve seen from your site you provide this great feature, what other tools do you offer to FriendlyPay merchants?
We also provide a full shopping cart system. This is particularly useful to sites with large inventories of redundant products that can be purchased in multiples. It also allows the shopper to pick an item, then continue shopping for other items until they are finished. Then they go to the “cart” they have filled and proceed to “check out”.
(Q) How fast can I get an account set up?
Account set up is instant.
(Q) Do you require me to send ID?
Not for initial account set up but depending on how you transfer money then we may require ID.
(Q) What are the limits on depositing or withdrawing through another e-currency?
At this time we do not have limits.
Q) How long does it take to ‘verify’ my US bank account for fund withdrawals?
Normally this is done between one to three days.
(Q) I don’t see a debit card on your web and since there are plenty of withdrawal options I suppose you don’t really need one. Does FriendlyPay have any plans to offer users a Canadian issued debit card?
We do and are in the process of adding one (it may be ours or it may be a 3rd party card as we have some options). Look for it near the end of this year if not sooner.
(Q) What does it mean to ‘upgrade’ an account?
This is when you change from the “free” option to the “low fee” member account.
(Q) From your ‘news’ page I found FriendlyPay acts as escrow agent for some real estate investment? What is PPREI and how did FriendlyPay get hooked up with an ‘investment’ company?
Yes this is PPREI, or “Paradise Property Real Estate Investments”. They came to us and we wouldn’t allow them unless they used the Escrow system to protect the members.
(Q) I was reading your User Agreement and it talks about credit card account funding and it sounded similar to PayPal.. Credit card funding seems to be one of the most popular with online shoppers, however on the client account I did not see that as an option, did FriendlyPay used to offer this service? If so, why was it discontinued?
It was stopped due to fraud.
(Q) A lot of readers may see your company and want to know, do you allow HYIPs or autosurf programs? If so, what restrictions may apply?
We do allow them. While we try to protect the FriendlyPay member, they (the member) needs to realize that HYIPs are for the most part scams. We do review them and if we cannot gather the proper due diligence we will not allow them. In my opinion stay away from HYIP programs.
I’d like to thank Tim and James for taking time to answer my questions. If you have not tried FriendlyPay, I encourage you to test their service it has many options unavailable on other systems and a fine track record.
Tags: 1MDC, DGC, digital-currency, Digital-Gold, e-bullion, e-gold, Friendlypay, GoldMoney, james-holland, Online Payments, Pecunix, timothy-thomas, WebMoneyRelated Stories
POSTED IN: Boosting Online Sales, Online Currency, Online Payments
8 opinions for FriendlyPay: An Interview With Timothy Thomas and James Holland
Mark Herpel
Apr 14, 2007 at 2:11 pm
This interview appeared on some other webs and one of the questions asked in comments was,
“Would you ask them if they are registered with FinCEN? Also, please ask them if they looked into the US State licensing issues and what they found out.”
Thanks,
Sharon
Is it possible James, to get an answer to these items? Thanks.
Mark
JD
Apr 14, 2007 at 5:32 pm
I checked out the FriendlyPay site and started the process of opening a free account. I was shocked to find the sign-up page, which collects your personal information - including login name and password - was not secure. I abandoned the sign-up process quickly.
Mark
Apr 15, 2007 at 9:00 am
Much discussion has taken place on a private email list I’m a part of, its filled with DGC old school guys and they have experience and knowledge in the industry so I’m publishing the content without their identifying information (name, urls, emails etc)
(XXXXX -person’s name)
They[FriendlyPay] are violating the May scale by providing an easy bridge between DGCs (hard money) and bank deposits (soft money).
This will have two effects. (1) Provide a way that crooks can use to convert loot they have in DGCs to fiat cash. This will lead to regulatory and legal problems that will either shut them down or cause them to introduce a draconian GM style KYC system. (2) Provide a pathway to escape with stolen funds from the banking system or the FriendlyPay system into comparatively hard, anonymous and liquid gold. This will attract massive fraud. They will be blamed for the theft of customers funds, chargebacks and visible flow of illicit funds into their system and will, again, be either shut down or forced into prohibitive bank-like KYC policies.
XXXXX’s principle: the (potential self sustaining) activities of the (always numerically small) cohort of crooks determine the evolutionary dynamics of any social system. The form, operation and business policies of DGCs have been and will be dominantly shaped by the effects of crime. This is a corollary confirmed by observation (for an example look no farther than the recent changes in 1MDC).
(anon person)
Today, FriendlyPay is pretty friendly. It is located in Canada, which tends to time-lag the USA in State control by a few years. But Spencer has me convinced: with an ACH connection, the potential is there. Darn shame, that, because all the other features and services of FriendlyPay look very tempting.
(anon person 2)
NETELLER did a good job interfacing the “soft” ACH system to a reasonably “hard” peer-to-peer and customer-to-merchant transfer system. They were enormously successful and hugely profitable. Their recent legal troubles had nothing do with fraud nor criminal activity — but rather a ridiculously dated and WTO-non-compliant Wire Act, and the politics of gambling and industry protectionism.
To me, DGCs are a victim of their idealism. They have a misplaced attachment to lack of identity verification and fraud controls, and a devotion to a nonrepudiability ideal that is crippling in practice. Tell me, how is blocking/freezing accounts not a violation of nonrepudiability? So the scammer gets to keep the victim’s money, it’s just becomes unusable?
(anon person 3)
Hard-money (DGCs) to soft (ACH) is not a violation of the May scale at all.
What you are really inferring here is a truth most people don’t want to admit: that DGCs are not “hard” money, DGC transactions are not nonrepudiable in practice; DGCs are not “cash”, are not a “currency”, all money is not green, all digital gold is not created equal. So an exchanger accepts a DGC payment with the faith that it is a “cash”-like nonrepudiable payment, transfers money out of the system without any identity verification nor fraud controls (why should you need any?), and then finds their account frozen for facilitating the transfer of funds that were ill-gotten (scammers,hackers,ponzis). This has happened with e-gold, e-bullion and DMT in notable cases.
However, if we admit this unsavory fact and deal with it, fraud controls and identity verification will still allow a business to transact DGC->ACH and properly manage the risk. DGCs however are an uncooperative counter party in this process.
I would expect you to claim ACH->DGC is a reason for this “dead on arrival” prophesy, and not the reverse. However, again with very stringent identity verification and fraud controls, this can be accomplished. Some people just find this philosophically inpure.
FriendlyPay in their Privacy Policy claims the right to request copies of the following information: drivers license, utility bills, bank account statements, credit card statements, credit cards, voided checks, IP address, photo identification, and notarized authentication of identity.
Beyond fraud controls, they need to charge fees that cover the fraud rate they will inevitably suffer. Merchants accept “soft” payment in exchange for “hard” goods all day long, many don’t even ask for identification. How do they stay in business? Easy, they may lose 4% of their sales to credit card fraud but their gross profit margin is 15%, net 11%. A financial company making a profit of only a few percent will of course need to ask for ID. NETELLER reported an ACH chargeback/fraud rate of 0.2%.
Now what *will* threaten the existence of FriendlyPay is a protectionist and authoritarian monetary control regime in the U.S. that enforces no liability upon traditional “regulated” financial institutions (the protected industry) for the activities of their customers, and imposes full liability upon any new competitor for the activities of their customers. A drug dealer (DOJ-paid informant) does an ACH from Citibank to FriendlyPay, Citibank is held unresponsible and FriendlyPay has all their U.S. assets frozen.
That said, I hope such a service can survive. I don’t know anything about FriendlyPay in particular. Anyone use them? Their website says 2003-2006 but I’ve never heard of them until today.
(anon person 4)
How is Netteller hard money again? I thought it was just a dollar system. So that would be like just moving around dollar sin various forms right? That is a soft to soft system.
James Holland
Apr 19, 2007 at 10:05 am
I have read your comments and many propose serious thought and I must admit much from my associate Tim. He is the best authority to address these more technical questions about the biz.
I will soon post replies to all of your concerns.
If you would rather pick up your dialog with me or Tim by all means contact me at my given email address.
james
james holland
Apr 27, 2007 at 5:54 am
Regarding bank accts.
We do not allow bank account TO FriendlyPay in the US or Canada due to the possible fraud involved.
We do NOT allow the bank account to FP using the ACH of EFT network.
However, we DO allow FriendlyPay “TO” bank accounts, but not from bank accts to Frieindlypay.
I may have stated this incorrectly in my part of the interview.
james
Dominic
May 2, 2007 at 9:17 am
Be careful transferring big amount with Friendlypay. I have had made several withdrawal request with friendlypay and got no reply from them whatsoever. I’ve followed their exact instruction. I’m starting to worry about being scammed.
Josh
Aug 14, 2007 at 4:19 pm
At some point during the week beginning July 8th 2007, this message was placed on FriendlyPay’s front page:
“Dear Members!
FriendlyPay is undergoing the management change. During this stage, basic operations are halted until all proper paperwork is in order. Along with new management, many new features are planned for FriendlyPay in the near future. We anticipate this change to last no longer than two to four weeks. Once the change is complete, you will receive a Welcome e-mail from new management with important information about your accounts and plans for new FriendlyPay. We sincerely apologize for any inconvenience. Please refrain from e-mailing us during this transitional stage as we may not be able to address your concerns in a timely manner. We appreciate your patience.”
I’ve had a withdrawal pending TWO weeks prior to this. Had I known they planned such lengthy downtime I would not have directed my funds to them. It is now roughly five weeks since they posted the above and they still have not bothered to update their members.
What Happened To FriendlyPay?
Aug 27, 2007 at 4:08 pm
[…] in April I concluded an email interview with FriendlyPay. The piece generated some good questions and input about the […]
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