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>>Almost every commercial transaction at the retail level allows you to use a method of payment that does not guarantee that the seller will actually receive th

by IncRnd 5y ago

>>Almost every commercial transaction at the retail level allows you to use a method of payment that does not guarantee that the seller will actually receive that money (credit cards). >That's not how credit cards work. At all. Not the OP, but that's exactly how cards work. When a card is swiped the seller doesn't receive the funds until possibly days later. There is absolutely no guarantee that the seller will actually receive that money, since it can be disputed or charged-back.

jaywalk 5y ago
In retail, the actual risk of not receiving money for a credit card transaction is pretty low. In the case of a stolen credit card, the retailer is not responsible for the fraud and will be paid. Outside of some sort of mistake (or outright fraud) on the part of the retailer that they refuse to correct, the fact that the credit card was physically present resolves pretty much everything else.
- IncRnd 5y ago
  Yes. I didn't say that the risk is incredibly high. If it were, cards would not be used. The point was that payment is not guaranteed, since chargebacks are allowed.
  - ClumsyPilot 5y ago
    The risk is 0.001%, and it brings in 30% (or whatever) more business. This has nothing to do with trust, it's a simple equation.
    - IncRnd 5y ago
      You're comparing apples and oranges. This is not a risk, revenue, or trust discussion. The discussion was that credit card payments are not guaranteed due to chargebacks. This is a truism and has nothing to do with the percentatge of chargebacks that occur.
      - nohat00 5y ago
        This is exactly correct, and the parent's suggestion that the risk of chargebacks is something like 0.001% is WAAAAY off. Like, by orders of magnitude off. Any business that processes credit card transactions at scale, card present or card not present, is going to have a whole department of people who all they do all day long is deal with chargebacks. It does seem like there are some people here who think they know how credit cards work but actually have no idea.
        Dah00n 5y ago
        Not all businesses that use credit cards are in the broken US system. It's not a widespread problem everywhere.
        nohat00 5y ago
        According to Merchant Risk Council survey data[1], in 2021, friendly fraud in Europe was 1.3% (of transactions), 1.6% in Latin America, and 1.5% in APAC. In North America it was only 1.0%. So, it's actually a smaller problem in the US than in Europe and other global markets. Further, "Annual Ecommerce Revenue Spent to Manage Payment Fraud" was 9% in Europe, 12% in Latin America, and 15% in APAC. It was only 5% in North America. [1]: https://merchantriskcouncil.org/resource-center/surveys/2021/2021-mrc-global-fraud-survey https://merchantriskcouncil.org/resource-center/surveys/2021...
- nohat00 5y ago
  The actual risk of a merchant not receiving money for a credit card transaction is quite high. Chargebacks are enough of a business problem that many large retailers have whole teams only devoted to processing and disputing them. There are entire companies that create products and services to help merchants reduce just "friendly fraud" chargebacks—that is, chargebacks where the cardholder says the purchase wasn't authorized but they are just lying or it was a family member who made the purchase. That there are entire industries devoted to helping reduce it shows that the risk of chargebacks is definitely something that merchants take into account in how they run their businesses. In case of a stolen credit card, it's 100% the merchant who pays (that's why they're called charge-"backs"). The only exceptions are if the transactions are indemnified by a third party partner. All the card brands have multiple chargeback codes for fraudulent transactions, even card-present ones, so the fact that the credit card was physically present is not some kind of guarantee that the merchant would win a chargeback representment.
  - Dah00n 5y ago
    In the US maybe. I have never in our business seen anything like a chargeback or heard of anyone ever doing something like it. It is a very American problem. Even if people did do so they would be punished quickly. It is only a problem in a society with a high level of crime and little or no consequences. The law allows a chargeback for 12 months here. Not a problem, not even in our webshop.
    - nohat00 5y ago
      > It is a very American problem This is laughable, as North America has the lowest chargeback rate of all the global regions. This is just biased and ignorant anecdata. > It is only a problem in a society with a high level of crime and little or no consequences. If you're going to make nasty anti-American claims, you should at least back it up with real data. The facts are that chargebacks are a bigger source of fraud loss outside of North America than inside it. > Even if people did do so they would be punished quickly. This is not how credit card fraud works.

by IncRnd 5y ago

jaywalk 5y ago

In retail, the actual risk of not receiving money for a credit card transaction is pretty low. In the case of a stolen credit card, the retailer is not responsible for the fraud and will be paid. Outside of some sort of mistake (or outright fraud) on the part of the retailer that they refuse to correct, the fact that the credit card was physically present resolves pretty much everything else.

IncRnd 5y ago
Yes. I didn't say that the risk is incredibly high. If it were, cards would not be used. The point was that payment is not guaranteed, since chargebacks are allowed.
- ClumsyPilot 5y ago
  The risk is 0.001%, and it brings in 30% (or whatever) more business. This has nothing to do with trust, it's a simple equation.
  - IncRnd 5y ago
    You're comparing apples and oranges. This is not a risk, revenue, or trust discussion. The discussion was that credit card payments are not guaranteed due to chargebacks. This is a truism and has nothing to do with the percentatge of chargebacks that occur.
    - nohat00 5y ago
      This is exactly correct, and the parent's suggestion that the risk of chargebacks is something like 0.001% is WAAAAY off. Like, by orders of magnitude off. Any business that processes credit card transactions at scale, card present or card not present, is going to have a whole department of people who all they do all day long is deal with chargebacks. It does seem like there are some people here who think they know how credit cards work but actually have no idea.
      - Dah00n 5y ago
        Not all businesses that use credit cards are in the broken US system. It's not a widespread problem everywhere.
        nohat00 5y ago
        According to Merchant Risk Council survey data[1], in 2021, friendly fraud in Europe was 1.3% (of transactions), 1.6% in Latin America, and 1.5% in APAC. In North America it was only 1.0%. So, it's actually a smaller problem in the US than in Europe and other global markets. Further, "Annual Ecommerce Revenue Spent to Manage Payment Fraud" was 9% in Europe, 12% in Latin America, and 15% in APAC. It was only 5% in North America. [1]: https://merchantriskcouncil.org/resource-center/surveys/2021/2021-mrc-global-fraud-survey https://merchantriskcouncil.org/resource-center/surveys/2021...
nohat00 5y ago
The actual risk of a merchant not receiving money for a credit card transaction is quite high. Chargebacks are enough of a business problem that many large retailers have whole teams only devoted to processing and disputing them. There are entire companies that create products and services to help merchants reduce just "friendly fraud" chargebacks—that is, chargebacks where the cardholder says the purchase wasn't authorized but they are just lying or it was a family member who made the purchase. That there are entire industries devoted to helping reduce it shows that the risk of chargebacks is definitely something that merchants take into account in how they run their businesses. In case of a stolen credit card, it's 100% the merchant who pays (that's why they're called charge-"backs"). The only exceptions are if the transactions are indemnified by a third party partner. All the card brands have multiple chargeback codes for fraudulent transactions, even card-present ones, so the fact that the credit card was physically present is not some kind of guarantee that the merchant would win a chargeback representment.
- Dah00n 5y ago
  In the US maybe. I have never in our business seen anything like a chargeback or heard of anyone ever doing something like it. It is a very American problem. Even if people did do so they would be punished quickly. It is only a problem in a society with a high level of crime and little or no consequences. The law allows a chargeback for 12 months here. Not a problem, not even in our webshop.
  - nohat00 5y ago
    > It is a very American problem This is laughable, as North America has the lowest chargeback rate of all the global regions. This is just biased and ignorant anecdata. > It is only a problem in a society with a high level of crime and little or no consequences. If you're going to make nasty anti-American claims, you should at least back it up with real data. The facts are that chargebacks are a bigger source of fraud loss outside of North America than inside it. > Even if people did do so they would be punished quickly. This is not how credit card fraud works.