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I once did a chargeback against an eBay merchant who never delivered. PayPal was no help, and they strongly advised me against the chargeback. Ultimately, charg

by woah 11y ago

I once did a chargeback against an eBay merchant who never delivered. PayPal was no help, and they strongly advised me against the chargeback. Ultimately, charge backs are part and parcel of receiving credit card payment, and as a consumer I am glad they exist.

colechristensen 11y ago
The real core business competence of a payment processor isn't handling or distributing money, it's dispute arbitration.
- pjc50 11y ago
  Yes, absolutely; and this is one of the things that Bitcoin advocacy ignores. It goes in the other direction: all transfers are final, legitimate or otherwise.
  - MertsA 11y ago
    The problem I have with just about every payment processor out there is something that Bitcoin does well with from a protocol perspective. Right now you can copy a credit card with a mag reader in seconds, compromising some website that accepts credit cards means no limits to how much you can spend with other merchants, even having your credit card number stored in an RFID tag that can be read from a few feet away inconspicuously! The status quo might mean that money can be clawed back after it's sent but identity fraud (or using someone else's credentials) should not be a problem in 2015, we've had SIM cards that can provide a secure method for identifying a physical device since the 90s. Why can't any payment processor come up with a decent alternative to having a magic number that you have to give out all the time that can be used to authorize arbitrary transactions? Maybe eventually every citizen will get a smart card of some kind and we can just use that.
    - pjc50 11y ago
      ApplePay potentially meets that description. Also, chip-and-pin cards.
      - geomark 11y ago
        Estimates are that ApplePay is experiencing fraud rates as high as 6% at some banks. http://money.cnn.com/2015/03/18/technology/apple-pay-fraud/ http://money.cnn.com/2015/03/18/technology/apple-pay-fraud/
        gress 11y ago
        That is describing using Apple Pay as a way to tender already stolen credit cards and has nothing to do with the security of Apple Pay itself.
        lawnchair_larry 11y ago
        The end result is the same. It's just like using a stolen card.
        geomark 11y ago
        That's right. ApplePay does nothing to mitigate the credit card fraud problem. And until banks get better at verifying a stolen card isn't being loaded into ApplePay the problem is actually much worse.
        gress 11y ago
        ApplePay does a huge amount to mitigate the credit card fraud problem for it's users. The fact that it can be used to process cards stolen others is irrelevant.
        coldtea 11y ago
        We're not talking about the end result, we're talking about the security of a specific method of payment. If we were discussing how insecure IE 6 is and how it can get you hacked, then the fact that using Chrome to directly give your info to a shady site can have the same result (get you hacked), doesn't say anything for the relative security of Chrome vs IE 6.
    - colechristensen 11y ago
      You maybe should have noticed already, but this already exists and the transition is in progress. http://blogs.wsj.com/corporate-intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-card/ http://blogs.wsj.com/corporate-intelligence/2014/02/06/octob... You should have already (or very soon be) getting new credit cards in the mail with a SIM chip in them. After October 15, 2015 credit card companies (instead of merchants) will be liable for financial losses due to credit card fraud where the consumer is forced to use the mag stripe. (In the US of course)
    - tluyben2 11y ago
      We have been working on a solution for exactly that and it works well. Launching soon with actual product.
  - stephengillie 11y ago
    This sounds like cash.
  - ikeboy 11y ago
    If you want, you can use third parties with chargeback support, or escrow with multisig. Bitcoin gives you the option to choose exactly what level of security you want.
  - nadaviv 11y ago
    There are solutions that can be built on top of Bitcoin. See https://www.bitrated.com/ https://www.bitrated.com/ (full disclosure: I'm the founder).
    - bduerst 11y ago
      Reputation systems and multi-sig escrows are not substitutions for chargebacks. There are plenty of instances where you need to refund something the day after you received it, by which point the escrow money is long gone. Then the solution becomes "Hold transactions in escrow for 30 days" which isn't a solution. And reputation systems don't work on the internet, especially when purchasing is involved. How do you competitively solve this problem?
  - Rmilb 11y ago
    The thing with Bitcoin is that within the Bitcoin protocol the seller and buyer can choose an arbiter for disputes.
- dirkdk 11y ago
  for a marketplace like Ebay? yes! for a payment processor? I'd say no.

by woah 11y ago

colechristensen 11y ago

The real core business competence of a payment processor isn't handling or distributing money, it's dispute arbitration.

pjc50 11y ago
Yes, absolutely; and this is one of the things that Bitcoin advocacy ignores. It goes in the other direction: all transfers are final, legitimate or otherwise.
- MertsA 11y ago
  The problem I have with just about every payment processor out there is something that Bitcoin does well with from a protocol perspective. Right now you can copy a credit card with a mag reader in seconds, compromising some website that accepts credit cards means no limits to how much you can spend with other merchants, even having your credit card number stored in an RFID tag that can be read from a few feet away inconspicuously! The status quo might mean that money can be clawed back after it's sent but identity fraud (or using someone else's credentials) should not be a problem in 2015, we've had SIM cards that can provide a secure method for identifying a physical device since the 90s. Why can't any payment processor come up with a decent alternative to having a magic number that you have to give out all the time that can be used to authorize arbitrary transactions? Maybe eventually every citizen will get a smart card of some kind and we can just use that.
  - pjc50 11y ago
    ApplePay potentially meets that description. Also, chip-and-pin cards.
    - geomark 11y ago
      Estimates are that ApplePay is experiencing fraud rates as high as 6% at some banks. http://money.cnn.com/2015/03/18/technology/apple-pay-fraud/ http://money.cnn.com/2015/03/18/technology/apple-pay-fraud/
      - gress 11y ago
        That is describing using Apple Pay as a way to tender already stolen credit cards and has nothing to do with the security of Apple Pay itself.
        lawnchair_larry 11y ago
        The end result is the same. It's just like using a stolen card.
        geomark 11y ago
        That's right. ApplePay does nothing to mitigate the credit card fraud problem. And until banks get better at verifying a stolen card isn't being loaded into ApplePay the problem is actually much worse.
        gress 11y ago
        ApplePay does a huge amount to mitigate the credit card fraud problem for it's users. The fact that it can be used to process cards stolen others is irrelevant.
        coldtea 11y ago
        We're not talking about the end result, we're talking about the security of a specific method of payment. If we were discussing how insecure IE 6 is and how it can get you hacked, then the fact that using Chrome to directly give your info to a shady site can have the same result (get you hacked), doesn't say anything for the relative security of Chrome vs IE 6.
  - colechristensen 11y ago
    You maybe should have noticed already, but this already exists and the transition is in progress. http://blogs.wsj.com/corporate-intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-card/ http://blogs.wsj.com/corporate-intelligence/2014/02/06/octob... You should have already (or very soon be) getting new credit cards in the mail with a SIM chip in them. After October 15, 2015 credit card companies (instead of merchants) will be liable for financial losses due to credit card fraud where the consumer is forced to use the mag stripe. (In the US of course)
  - tluyben2 11y ago
    We have been working on a solution for exactly that and it works well. Launching soon with actual product.
- stephengillie 11y ago
  This sounds like cash.
- ikeboy 11y ago
  If you want, you can use third parties with chargeback support, or escrow with multisig. Bitcoin gives you the option to choose exactly what level of security you want.
- nadaviv 11y ago
  There are solutions that can be built on top of Bitcoin. See https://www.bitrated.com/ https://www.bitrated.com/ (full disclosure: I'm the founder).
  - bduerst 11y ago
    Reputation systems and multi-sig escrows are not substitutions for chargebacks. There are plenty of instances where you need to refund something the day after you received it, by which point the escrow money is long gone. Then the solution becomes "Hold transactions in escrow for 30 days" which isn't a solution. And reputation systems don't work on the internet, especially when purchasing is involved. How do you competitively solve this problem?
- Rmilb 11y ago
  The thing with Bitcoin is that within the Bitcoin protocol the seller and buyer can choose an arbiter for disputes.
dirkdk 11y ago
for a marketplace like Ebay? yes! for a payment processor? I'd say no.