Everybody agrees that consumer rights ought to be protected.

Everybody agrees that people ought to have full disclosure of their rights and obligations.

The question is, what does that have to do with the settlement system? and who should profit? And whether the country should go on another hundred years posting all our transactions at banks.

Eliot Spitzer should go out and enforce the fraud laws instead of coercing all kinds of costs back on the users of the card services infrastructure. Why do we need fraud losses to be insured by the settlement providers? PayPal uncoupled them. That should be left to consumer choice. Spitzer's action is tantamount to a ban on the emergent reputation and identity frameworks, by subsidizing fraud losses, making reputation of the seller the business of Banks not the buyer.

This is mostly it - PayPal has attracted the attention of the regulators, and it hasn't cleaned up its house in the meantime. Its fraud unit has always been thought to be particularly vulnerable to regulation, due to its sweeping freezes of many accounts - clearly actions of some disappointment to many consumers who have had their funds frozen because they once purchased from someone who was defrauded...

But, also, the warmth that PayPal is feeling could be a warning to others to ... get ready for more scrutiny. I think the fraud approaches of the (some) DGCs are more robust, but it will be interesting to see what regulators say on the DGCs' fraud handling.