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This does not solve the problem "Fraudsters will appeal their denial, happily pay the $25 fee using a stolen credit card, and then skip town with their first $X
by patio11 13y ago
This does not solve the problem "Fraudsters will appeal their denial, happily pay the $25 fee using a stolen credit card, and then skip town with their first $X,000 in payments."
- Dylan16807 13y agoIf the fee is to pay for better checking, then it's a fake $25 payment that results in a denial. And in this case square is still accepting them to make payments but not receive them, so there should be no problem with the $25 bouncing. In the general case perhaps they could demand cash for the verification fee.
- patio11 13y agoYou'll generally not find out that a credit card was used for a stolen payment until weeks after the payment goes through. At that point, it's too late for Square.
- Dylan16807 13y agoSorry did a bit of editing as you replied. But I think you misunderstood the idea. The $25 is not to prove them trustworthy, it's to incentivize square to do a better investigation into whether someone is trustworthy. It doesn't matter very much that someone could use a stolen credit card for that $25 payment, because square would deny such a person during their deeper investigation and lose less than $25 dollars total. And there is little reason for the criminal to do this because it will get one of their nice card numbers blocked faster. Or ignore the second paragraph and charge cash for the service of doing a better investigation with responsive customer support.