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> Fraud costs are borne by merchants and to some extent processors, but not the issuer banks that receive the interchange fee. Merchant fraud and merchant cred
by granzymes 3y ago
> Fraud costs are borne by merchants and to some extent processors, but not the issuer banks that receive the interchange fee.
Merchant fraud and merchant credit risk is borne by acquirers (although, if they went under the issuing baking is ultimately on the hook). But fraud by the cardholder and cardholder credit risk is borne by the issuer.
- abalone 3y agoYes, merchant fraud is what I was referring to with “to some extent.” And you’re correct that card-present fraud is more likely to be borne by the bank these days (this was not always the case). But typical e-commerce fraud is usually eaten by the merchant.