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It's actually the end merchant (seller) that bears the cost of fraud. So credit card companies have little incentive to fix this, beyond customer support costs.
by silviogutierrez 13y ago
It's actually the end merchant (seller) that bears the cost of fraud. So credit card companies have little incentive to fix this, beyond customer support costs.
Say you sell a camera to someone using a stolen credit card.
The real owner of the card gets his money back after doing a chargeback. The thief keeps the camera. The merchant loses a camera, the money, and gets a ding in his credit card merchant reputation.
- andrewfong 13y agoSeems like the legislative solution then would just be to shift (at least some of) the burden to the credit card processors then.
- silviogutierrez 13y agoI agree. It's a tricky problem. Chargebacks are really easy for the consumer - too easy. There has to be a happy medium, but I can't quite think what it is. Bitcoin, on the other hand, is sided on the other extreme. The merchant has almost all the power. However, the merchant still has a reputation, which might be sufficient incentive.
- largote 13y agoDoesn't the merchant bear the cost of the fraud ONLY if they'r e using obsolete equipment?