4 ms·

The risk of fraud is covered by the merchant. The fees should be much lower than 3%.

by danieltillett 9y ago

adrr 9y ago
Only online transactions(CNP) where you ship the product to address other than card's billing address. If the merchant uses 3D secure for online transactions, issuer is fully liable for fraud. For card present transactions, issuer is fully liable for chip based transactions. Merchants only bear risk if its a stripe or a manually keyed in transaction. High cost of for credit card transactions is because merchant pays for the 60 day interest free loan on the money that the bank is giving the consumer to make the purchase. Debit network transactions are a lot lower, 0.5% for durbin amendment cards(90% of cards out there).
- danieltillett 9y ago
  I am in Australia where the rules are different, but does 3D secure protect you against the CC owner claiming the item is not as described or was not received?
treyfitty 9y ago
It really depends on a lot of things (do you have a chip terminal? If not, are you a gas merchant and based in the US, and the total transaction is under $50? Are you enrolled in 3D Secure? Are you on the Full Fraud Recourse list?...etc.) How you answer those questions determine chargeback eligibility. Even if networks do issue a chargeback, you can provide a 2nd presentment with evidence supporting your claim that it wasn't your fault. Finally, if all else fails, you can go the Good Faith Credit route. Which leads me to say that the burden of fraud really falls on the network, not the merchant, since they have to abide by definitive chargeback policies set forth, and be willing to accept 2nd presentments for the sake of maintaining merchant relationships. Your conclusion still holds true- swipe fees should be less than 3%- probably closer to 1%... let's just say I work in the industry, and see how the proverbial sausage is made.

4 ms·

The risk of fraud is covered by the merchant. The fees should be much lower than 3%.

by danieltillett 9y ago

The risk of fraud is covered by the merchant. The fees should be much lower than 3%.

adrr 9y ago
Only online transactions(CNP) where you ship the product to address other than card's billing address. If the merchant uses 3D secure for online transactions, issuer is fully liable for fraud. For card present transactions, issuer is fully liable for chip based transactions. Merchants only bear risk if its a stripe or a manually keyed in transaction. High cost of for credit card transactions is because merchant pays for the 60 day interest free loan on the money that the bank is giving the consumer to make the purchase. Debit network transactions are a lot lower, 0.5% for durbin amendment cards(90% of cards out there).
- danieltillett 9y ago
  I am in Australia where the rules are different, but does 3D secure protect you against the CC owner claiming the item is not as described or was not received?
treyfitty 9y ago
It really depends on a lot of things (do you have a chip terminal? If not, are you a gas merchant and based in the US, and the total transaction is under $50? Are you enrolled in 3D Secure? Are you on the Full Fraud Recourse list?...etc.) How you answer those questions determine chargeback eligibility. Even if networks do issue a chargeback, you can provide a 2nd presentment with evidence supporting your claim that it wasn't your fault. Finally, if all else fails, you can go the Good Faith Credit route. Which leads me to say that the burden of fraud really falls on the network, not the merchant, since they have to abide by definitive chargeback policies set forth, and be willing to accept 2nd presentments for the sake of maintaining merchant relationships. Your conclusion still holds true- swipe fees should be less than 3%- probably closer to 1%... let's just say I work in the industry, and see how the proverbial sausage is made.