5 ms·

> The reason for the dispute was listed as “other fraud card absent” (the real cardholder said someone else used their credit card number). That is a regulatio

by bambax 6y ago

> The reason for the dispute was listed as “other fraud card absent” (the real cardholder said someone else used their credit card number). That is a regulation problem. If a card was used fraudulently, but the restaurant correctly delivered the order, then the restaurant shouldn't be held responsible for the fraud. The bank, or Visa, should be. Refund the customer, let the restaurant keep the funds, have Visa take the fall.

sokoloff 6y ago
If restaurants complain about 3% processing fees now, they will definitely be unhappy with the new fees...
- rtpg 6y ago
  That is what the 3% is for! It’s the point of the fees! The whole reason for everything is fraud and points By the way fraud at current levels are covered by like a few of 0.25% IIRC I imagine that whatever app isn’t using 3D secure like it should be, cuz then the bank/card processor is liable in fraud cases. But this is far from a new problem in principle.
- oliwarner 6y ago
  3%?! Wtf America? That's double what the rest of the world is paying. I've seen 1% for some industries in the UK. This is home delivery. Why isn't there an AVS layer to acknowledge fraud risk? Or 3DS to better authenticate payments? If either fail, let the restaurant refuse it. Taking trusted payments can't be this hard. It's bad for everyone.
  - vkou 6y ago
    > 3%?! Wtf America? That's double what the rest of the world is paying. I've seen 1% for some industries in the UK. Does your credit card give you 1-3% in cash-back? Because mine does. That cashback is why the merchants are paying 3%.
    - maccard 6y ago
      Nope. Cashback cards are (for the most part) non existant in Europe. There's two amex cards in the UK that I'm aware of, and they're not widely used at all.
      - geoah 6y ago
        Natwest has a reward credit card in the uk that gives you 1-2% back. Hsbc has a similar point based one. Pretty sure other banks have then as well.
      - ThePadawan 6y ago
        Both my (Swiss) credit cards (Mastercard, Amex) from one of the biggest banks are at least 1% cashback.
    - apexalpha 6y ago
      You do understand that that "cash back" is simply your money right. This literally only benefits CC companies, who take more profit. This is why it's illegal in most other countries.
      - lotsofpulp 6y ago
        If you’re getting 2% or more cash back, it’s other people’s money who aren’t getting that cash back. Also, merchants are free to not pay the processing fees and just choose to accept debit cards and/or cash, and/or charge 2% more for credit card purchases. In fact, many merchants do do that. Typically, I see surcharges at governments, utilities, large commercial supplies merchants, etc. But general retail/restaurant merchants have calculated they make more money from people spending with credit cards, so they want to incentivize it even though the processing costs are higher. Otherwise, there’s no reason HomeDepot or Dollar General or the grocery store doesn’t charge an extra 2% for credit card purchases. But they know people paying with credit cards will spend more, canceling out the card processing fees. I was actually surprised to see Aldi, the famous low cost grocer who used to only accept debit cards and cash start taking credit cards. The only reason they would have done that is if they figured that they will earn more money accepting credit cards even after paying the processing fees.
floatingatoll 6y ago
Do the restaurants agree otherwise when they sign up for delivery platforms?
TuringNYC 6y ago
Is there a way to swipe/confirm the card on pickup?
ianhawes 6y ago
The card network is never liable, in your proposed scenario the bank would be the closest party. However that’s not how it works in credit card processing. The merchant always eats fraud charges unless you’re doing 3DS or chip processing. Standard “type your card number in” will always see the merchant taking full responsibility for fraudulent transactions.
- bambax 6y ago
  > that’s not how it works in credit card processing Let's change that, then.
  - foolmeonce 6y ago
    While I think it's wrong to add additional risks beyond the loss of value itself (i.e. raised fees for too many charge backs.) I would rather the merchant stay liable for the loss itself. I think it is an equivalent example that if no business was responsible for the risk of accepting bad notes, convenience stores would have a policy of not investigating and actively hindering prosecution on obviously counterfeit notes.
    - curryst 6y ago
      > I think it is an equivalent example that if no business was responsible for the risk of accepting bad notes, convenience stores would have a policy of not investigating and actively hindering prosecution on obviously counterfeit notes. That's not how the incentives align. If Visa is responsible for eating fees from fraudulent charges, they're going to start removing vendors with higher than usual fraud charges from the network. Businesses will still have an incentive not to allow fraud, because they won't be able to process credit cards otherwise. This already exists for chargebacks, and businesses hate them because too many chargebacks increases the percentage the processor takes. Counterfeit notes are different. There is no information asymmetry. What makes a dollar bill a dollar bill is widely published, so validating the authenticity of one is rather easy. There are tons of companies that make machines that will tell you if your dollar is real or not. Credit card charges are different in that there is a huge information asymmetry. Your credit card network knows who you are. They have your address. They have a copy of your usual spending habits. They know who lives in your house. They have a ton of information they can look at to see whether a given charge makes sense. They can add additional security measures. You know what your merchant knows about you? That you want to buy X, and you're paying with Y credit card. They don't have any meaningful information to make a judgement about whether this purchase is legitimate. I struggle to think of how a merchant legitimately has the option to stop fraud. You can pay one of those anti-fraud sites, but at that point you're really just paying so you can get access to the same information that the credit card processor already has. Some of the CC processors even already have an anti-fraud service. It sure seems like they're the best poised to offer it, they just want to be able to charge you more for using it and still avoid any liability for fraudulent charges that do occur.

by bambax 6y ago

sokoloff 6y ago

If restaurants complain about 3% processing fees now, they will definitely be unhappy with the new fees...

rtpg 6y ago
That is what the 3% is for! It’s the point of the fees! The whole reason for everything is fraud and points By the way fraud at current levels are covered by like a few of 0.25% IIRC I imagine that whatever app isn’t using 3D secure like it should be, cuz then the bank/card processor is liable in fraud cases. But this is far from a new problem in principle.
oliwarner 6y ago
3%?! Wtf America? That's double what the rest of the world is paying. I've seen 1% for some industries in the UK. This is home delivery. Why isn't there an AVS layer to acknowledge fraud risk? Or 3DS to better authenticate payments? If either fail, let the restaurant refuse it. Taking trusted payments can't be this hard. It's bad for everyone.
- vkou 6y ago
  > 3%?! Wtf America? That's double what the rest of the world is paying. I've seen 1% for some industries in the UK. Does your credit card give you 1-3% in cash-back? Because mine does. That cashback is why the merchants are paying 3%.
  - maccard 6y ago
    Nope. Cashback cards are (for the most part) non existant in Europe. There's two amex cards in the UK that I'm aware of, and they're not widely used at all.
    - geoah 6y ago
      Natwest has a reward credit card in the uk that gives you 1-2% back. Hsbc has a similar point based one. Pretty sure other banks have then as well.
    - ThePadawan 6y ago
      Both my (Swiss) credit cards (Mastercard, Amex) from one of the biggest banks are at least 1% cashback.
  - apexalpha 6y ago
    You do understand that that "cash back" is simply your money right. This literally only benefits CC companies, who take more profit. This is why it's illegal in most other countries.
    - lotsofpulp 6y ago
      If you’re getting 2% or more cash back, it’s other people’s money who aren’t getting that cash back. Also, merchants are free to not pay the processing fees and just choose to accept debit cards and/or cash, and/or charge 2% more for credit card purchases. In fact, many merchants do do that. Typically, I see surcharges at governments, utilities, large commercial supplies merchants, etc. But general retail/restaurant merchants have calculated they make more money from people spending with credit cards, so they want to incentivize it even though the processing costs are higher. Otherwise, there’s no reason HomeDepot or Dollar General or the grocery store doesn’t charge an extra 2% for credit card purchases. But they know people paying with credit cards will spend more, canceling out the card processing fees. I was actually surprised to see Aldi, the famous low cost grocer who used to only accept debit cards and cash start taking credit cards. The only reason they would have done that is if they figured that they will earn more money accepting credit cards even after paying the processing fees.

floatingatoll 6y ago

Do the restaurants agree otherwise when they sign up for delivery platforms?

TuringNYC 6y ago

Is there a way to swipe/confirm the card on pickup?

ianhawes 6y ago

The card network is never liable, in your proposed scenario the bank would be the closest party. However that’s not how it works in credit card processing. The merchant always eats fraud charges unless you’re doing 3DS or chip processing. Standard “type your card number in” will always see the merchant taking full responsibility for fraudulent transactions.

bambax 6y ago
> that’s not how it works in credit card processing Let's change that, then.
- foolmeonce 6y ago
  While I think it's wrong to add additional risks beyond the loss of value itself (i.e. raised fees for too many charge backs.) I would rather the merchant stay liable for the loss itself. I think it is an equivalent example that if no business was responsible for the risk of accepting bad notes, convenience stores would have a policy of not investigating and actively hindering prosecution on obviously counterfeit notes.
  - curryst 6y ago
    > I think it is an equivalent example that if no business was responsible for the risk of accepting bad notes, convenience stores would have a policy of not investigating and actively hindering prosecution on obviously counterfeit notes. That's not how the incentives align. If Visa is responsible for eating fees from fraudulent charges, they're going to start removing vendors with higher than usual fraud charges from the network. Businesses will still have an incentive not to allow fraud, because they won't be able to process credit cards otherwise. This already exists for chargebacks, and businesses hate them because too many chargebacks increases the percentage the processor takes. Counterfeit notes are different. There is no information asymmetry. What makes a dollar bill a dollar bill is widely published, so validating the authenticity of one is rather easy. There are tons of companies that make machines that will tell you if your dollar is real or not. Credit card charges are different in that there is a huge information asymmetry. Your credit card network knows who you are. They have your address. They have a copy of your usual spending habits. They know who lives in your house. They have a ton of information they can look at to see whether a given charge makes sense. They can add additional security measures. You know what your merchant knows about you? That you want to buy X, and you're paying with Y credit card. They don't have any meaningful information to make a judgement about whether this purchase is legitimate. I struggle to think of how a merchant legitimately has the option to stop fraud. You can pay one of those anti-fraud sites, but at that point you're really just paying so you can get access to the same information that the credit card processor already has. Some of the CC processors even already have an anti-fraud service. It sure seems like they're the best poised to offer it, they just want to be able to charge you more for using it and still avoid any liability for fraudulent charges that do occur.