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I operated an online store selling $2,000 pieces of computer hardware, and both credit card companies and banks alike refused to service us because fraud rates

by Taek 5y ago

I operated an online store selling $2,000 pieces of computer hardware, and both credit card companies and banks alike refused to service us because fraud rates were extremely high. If you think fraud rates are extremely low, you've never tried to sell $2,000 electronics online as a boutique electronics store. Bitcoin was the only option.

yunohn 5y ago
It’s not that I don’t believe there is fraud, I’m saying the vast majority of customers are well-intentioned. If this is not the case, could you point me to some sources and not just your anecdote? Regardless, how does Bitcoin solve this? There’s a lot of illegitimate users of crypto, how are you solving fraud with irreversible transactions?
- Taek 5y ago
  > If this is not the case, could you point me to some sources and not just your anecdote? It's difficult to find sources, but generally speaking you are going to go 'on warning' at around 1.5% and if you go too much over 2% chargeback rate you just get dropped by the credit card company as a customer. Credit card companies don't like dealing with high fraud customers and won't support you. https://chargeback.com/average-chargeback-rates-how-does-your-business-compare/ https://chargeback.com/average-chargeback-rates-how-does-you... https://chargebacks911.com/chargeback-rate/ https://chargebacks911.com/chargeback-rate/ Bitcoin helps in two ways. The first is that it gives you a way to accept money at all. As stated above, if your chargeback rate is above 2% for any extended period of time, all of your payment processors - including your banks - are going to drop you as a customer. You may be willing to pay 5% overheads for a higher chargeback rate, but your credit card company doesn't want that as a statistic and they just won't support you. The other way Bitcoin helps is that once your wallet (use BTCPay) says "2 confirmations" you've got a 99.97% guarantee that the money is yours and won't be reverted. And that's true whether you are receiving $2,000 or $2,000,000. Regardless of whether that money came from "an illegitimate user", you as the merchant can be confident shipping hardware out because you know that the payment is not going to be clawed back.

by Taek 5y ago

yunohn 5y ago

It’s not that I don’t believe there is fraud, I’m saying the vast majority of customers are well-intentioned. If this is not the case, could you point me to some sources and not just your anecdote? Regardless, how does Bitcoin solve this? There’s a lot of illegitimate users of crypto, how are you solving fraud with irreversible transactions?

Taek 5y ago
> If this is not the case, could you point me to some sources and not just your anecdote? It's difficult to find sources, but generally speaking you are going to go 'on warning' at around 1.5% and if you go too much over 2% chargeback rate you just get dropped by the credit card company as a customer. Credit card companies don't like dealing with high fraud customers and won't support you. https://chargeback.com/average-chargeback-rates-how-does-your-business-compare/ https://chargeback.com/average-chargeback-rates-how-does-you... https://chargebacks911.com/chargeback-rate/ https://chargebacks911.com/chargeback-rate/ Bitcoin helps in two ways. The first is that it gives you a way to accept money at all. As stated above, if your chargeback rate is above 2% for any extended period of time, all of your payment processors - including your banks - are going to drop you as a customer. You may be willing to pay 5% overheads for a higher chargeback rate, but your credit card company doesn't want that as a statistic and they just won't support you. The other way Bitcoin helps is that once your wallet (use BTCPay) says "2 confirmations" you've got a 99.97% guarantee that the money is yours and won't be reverted. And that's true whether you are receiving $2,000 or $2,000,000. Regardless of whether that money came from "an illegitimate user", you as the merchant can be confident shipping hardware out because you know that the payment is not going to be clawed back.