4 ms·

How would you handle chargeback claims? Should all users of the system share in the fraud risk?

by hgsgm 3y ago

jaxrtech 3y ago
I never can tell if chargebacks are truly a feature or a bug.
arcticbull 3y ago
Same way it's handled now, you charge a higher processing fee proportional to the chargeback risk in the industry. My only argument is that networks shouldn't be able to capriciously deny transactions that are legal, even if I disagree with them. I don't believe in the 2nd amendment, but to the extent it is lawful to buy a gun, you should be able to buy it with your Visa card, imo, and a lot of payment acquirers do not permit it. Similarly, legal drugs.
- nickff 3y ago
  The reason the networks started denying service to firearms dealers is that the (Obama-era) Department of Justice pressured them to. They also went after pornography and marijuana dealers. https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point
  - arcticbull 3y ago
    I don't disagree! I'm saying that by law that should not be an option.
- Georgelemental 3y ago
  OK, the processing fee for PornHub and gun stores is now 237%. What are you going to do about it?
  - arcticbull 3y ago
    No idea where you got "237%" but no, of course, the rule I have in mind would require charging fees proportional to the risk. This is well-worn ground. And if somehow the risk is double what the charge is (?!) then that's the risk. They'll have to step up their customer validation at PornHub.
    - lazide 3y ago
      The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned for things they don’t like. It would be challenging to stop without mandating some explicit formula too, which can be gamed.
      - stale2002 3y ago
        > The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned Obviously, the answer is to disallow that. And if people break the law, and do it anyway, by trying to be "clever" then a judge and jury can punish them. This punishment works especially well, with this thing called "discovery", in which the legal system can parse through your internal communications, to see if you are intending on defacto banning it. > It would be challenging to stop without mandating some explicit formula too No it wouldn't be. Just do it, like we do many other laws. Give a vague description of whats not allowed, and let the jury figure it out. And give a large fine if they lose the court case. That's enough deterrence to stop people from gaming the system. Just give them a huge fine if they try to do that.
        lazide 3y ago
        The reason that it is the way it is now is because people want it that way. So good luck with that.
        kelnos 3y ago
        Well, what do you mean by "people"? If you mean "a majority of voters", then I doubt that's actually true, for quite a few types of businesses and transactions that are currently banned from payment networks. If you mean "those in power who can and do make decisions that a majority of voters wouldn't actually support", then sure, I think that's the case, but that doesn't make it right, and that doesn't make it inevitable, either.
  - scythe 3y ago
    You can cap the effective margin with even a very generous limit — say, processing fees no more than 3x the cost of servicing chargebacks — and mostly eliminate the concern about "quietly banning" businesses via processing fees. But the thing is that there isn't much incentive to do this kind of skulduggery, because the companies are only protecting themselves from lawsuits and protests when they ban businesses, but imposing high processing fees would probably not satisfy the would-be tyrants who were trying to force these "bans".
ianai 3y ago
Someone charging back an illicit activity shouldn’t want it exposed to any inquisitive process-so don’t. Ie make it legal for the provider to report it, perhaps anonymously.
deleted 3y ago
[deleted]

How would you handle chargeback claims? Should all users of the system share in the fraud risk?

by hgsgm 3y ago

How would you handle chargeback claims? Should all users of the system share in the fraud risk?

jaxrtech 3y ago

I never can tell if chargebacks are truly a feature or a bug.

arcticbull 3y ago

Same way it's handled now, you charge a higher processing fee proportional to the chargeback risk in the industry. My only argument is that networks shouldn't be able to capriciously deny transactions that are legal, even if I disagree with them. I don't believe in the 2nd amendment, but to the extent it is lawful to buy a gun, you should be able to buy it with your Visa card, imo, and a lot of payment acquirers do not permit it. Similarly, legal drugs.

nickff 3y ago
The reason the networks started denying service to firearms dealers is that the (Obama-era) Department of Justice pressured them to. They also went after pornography and marijuana dealers. https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point
- arcticbull 3y ago
  I don't disagree! I'm saying that by law that should not be an option.
Georgelemental 3y ago
OK, the processing fee for PornHub and gun stores is now 237%. What are you going to do about it?
- arcticbull 3y ago
  No idea where you got "237%" but no, of course, the rule I have in mind would require charging fees proportional to the risk. This is well-worn ground. And if somehow the risk is double what the charge is (?!) then that's the risk. They'll have to step up their customer validation at PornHub.
  - lazide 3y ago
    The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned for things they don’t like. It would be challenging to stop without mandating some explicit formula too, which can be gamed.
    - stale2002 3y ago
      > The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned Obviously, the answer is to disallow that. And if people break the law, and do it anyway, by trying to be "clever" then a judge and jury can punish them. This punishment works especially well, with this thing called "discovery", in which the legal system can parse through your internal communications, to see if you are intending on defacto banning it. > It would be challenging to stop without mandating some explicit formula too No it wouldn't be. Just do it, like we do many other laws. Give a vague description of whats not allowed, and let the jury figure it out. And give a large fine if they lose the court case. That's enough deterrence to stop people from gaming the system. Just give them a huge fine if they try to do that.
      - lazide 3y ago
        The reason that it is the way it is now is because people want it that way. So good luck with that.
        kelnos 3y ago
        Well, what do you mean by "people"? If you mean "a majority of voters", then I doubt that's actually true, for quite a few types of businesses and transactions that are currently banned from payment networks. If you mean "those in power who can and do make decisions that a majority of voters wouldn't actually support", then sure, I think that's the case, but that doesn't make it right, and that doesn't make it inevitable, either.
- scythe 3y ago
  You can cap the effective margin with even a very generous limit — say, processing fees no more than 3x the cost of servicing chargebacks — and mostly eliminate the concern about "quietly banning" businesses via processing fees. But the thing is that there isn't much incentive to do this kind of skulduggery, because the companies are only protecting themselves from lawsuits and protests when they ban businesses, but imposing high processing fees would probably not satisfy the would-be tyrants who were trying to force these "bans".

ianai 3y ago

Someone charging back an illicit activity shouldn’t want it exposed to any inquisitive process-so don’t. Ie make it legal for the provider to report it, perhaps anonymously.

deleted 3y ago

[deleted]