8 ms·

Well no, as a consumer you need to feel comfortable that you know how to get your money back if there's a problem with your purchase, as a merchant you need sim

by mwenge 1y ago

Well no, as a consumer you need to feel comfortable that you know how to get your money back if there's a problem with your purchase, as a merchant you need similar protections and a stable cost model, and as a bank you need an income model to cover all the costs and risks associated with processing the transaction. Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved.

nebezb 1y ago
> Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved. Nailed it. Anyone can move money. As a consumer, I always opt to pay for credit card where available. The safeties provided to me facilitated by everyone in the network – from issuer to acquirer and everyone in between – is exactly why. I don't want to consider waiting 12 months in line at small claims to get back $200 sent over Interac for services that were never provided by a shoddy business owner. The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business.
- latchkey 1y ago
  When you buy something from Amazon, who protects your purchases, Amazon or the credit card company? This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. Often, you purchase additional protection insurance on your big ticket items. This could easily be extended to cover whatever credit cards would have been relied upon in the past.
  - nebezb 1y ago
    > This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. I had not considered this. My first thought is how technically and operationally complex it would be for an insurer to underwrite these transactions "on-the-fly" from merchants they don't know, but it is probably a great idea.
    - tmcz26 1y ago
      Look up “chargeback guarantee”. A lot of fraud vendors do this. Costs 2x or more though than the average transaction
      - latchkey 1y ago
        > Costs 2x or more though than the average transaction That's because they compete with credit card companies today. Make them more popular and I bet their costs would come down.
      - nebezb 1y ago
        You’re describing insurance on the merchants side. The post I was referring to described insurance on the consumer side.
- dexterdog 1y ago
  > The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business. That cost is a minimum of 100% passed on to the consumer.
gethly 1y ago
There is no difference to the bank transfer(as that is what all of this is just wrapping inside). If you are paying with a debit card, you have the same "protections" as basic bank transfer. And from personal experience, the bank is near useless and you won't be even able to call your card company. On the other hand, credit cards are something else. Those are essentially short-term loans that are insured. As there are many parties involved that profit from you use of these, there indeed is a lot of protection in this case. But credit cards are very niche part of online card payments and mostly it is a USA thing.
mansa10 1y ago
I've never understood this insurance defense of high payment card fees (percentages instead of flat fees). If it is a truly valuable insurance for the shoppers, why is it not opt-in? My anecdotal experience from EU is that no-one even knows chargebacks exists or how it works and if this was turned into a transparent honest insurance, prompted via a question on the payment terminal/online checkout such as "Do you want to pay 1-3% to insure this purchase?" the vast majority of people would click no on the vast majority of purchases because there is already inherent trust involved between the merchant and the shopper. Now add the chargeback pains that merchants go through for credit card frauds and you have what appears to be a sickly system where both shoppers and merchants lose, with the only winners being visa/mastercard & the acquiring and issuing banks they cooperate with. If I buy a burger from a restaurant and its bad, i tell all my friends and i don't go back. I don't need insurance. If I buy a service on steam, i already trust valve fully for those smaller amount sizes, I don't need insurance. My gut feeling is that >99,9% of purchases made via payment cards are not relevant to insure meaning following the simpler risk model of cash for those would work just fine.
- gethly 1y ago
  Chargebacks are indeed quite detrimental to merchants as they are the ones paying it. And if you have bad customers(maybe competition is trying to put you out of the business), you might get deep into red quite fast. Usually it is anywhere between 20 and 50 euros, which is crazy when it is just a reverse of the bank transfer which is the tech in the background. Like if you run a small online store and you sell 10€ items where you make a 5€ pre-tax profit, having a 20€ chargeback on such sale can be really dangerous.
  - maccard 1y ago
    > Usually it is anywhere between 20 and 50 euros, which is crazy when it is just a reverse of the bank transfer which is the tech in the background The point is it’s punititive to the merchant. You’re incentivised to avoid them pretty much at all cost
- ta12653421 1y ago
  this insurance stuff rarely adds anything on top you would benefit of. and for large transactions, most wont use a credit card (like buying a house)

by mwenge 1y ago

nebezb 1y ago

> Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved. Nailed it. Anyone can move money. As a consumer, I always opt to pay for credit card where available. The safeties provided to me facilitated by everyone in the network – from issuer to acquirer and everyone in between – is exactly why. I don't want to consider waiting 12 months in line at small claims to get back $200 sent over Interac for services that were never provided by a shoddy business owner. The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business.

latchkey 1y ago
When you buy something from Amazon, who protects your purchases, Amazon or the credit card company? This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. Often, you purchase additional protection insurance on your big ticket items. This could easily be extended to cover whatever credit cards would have been relied upon in the past.
- nebezb 1y ago
  > This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. I had not considered this. My first thought is how technically and operationally complex it would be for an insurer to underwrite these transactions "on-the-fly" from merchants they don't know, but it is probably a great idea.
  - tmcz26 1y ago
    Look up “chargeback guarantee”. A lot of fraud vendors do this. Costs 2x or more though than the average transaction
    - latchkey 1y ago
      > Costs 2x or more though than the average transaction That's because they compete with credit card companies today. Make them more popular and I bet their costs would come down.
    - nebezb 1y ago
      You’re describing insurance on the merchants side. The post I was referring to described insurance on the consumer side.
dexterdog 1y ago
> The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business. That cost is a minimum of 100% passed on to the consumer.

gethly 1y ago

There is no difference to the bank transfer(as that is what all of this is just wrapping inside). If you are paying with a debit card, you have the same "protections" as basic bank transfer. And from personal experience, the bank is near useless and you won't be even able to call your card company. On the other hand, credit cards are something else. Those are essentially short-term loans that are insured. As there are many parties involved that profit from you use of these, there indeed is a lot of protection in this case. But credit cards are very niche part of online card payments and mostly it is a USA thing.

mansa10 1y ago

I've never understood this insurance defense of high payment card fees (percentages instead of flat fees). If it is a truly valuable insurance for the shoppers, why is it not opt-in? My anecdotal experience from EU is that no-one even knows chargebacks exists or how it works and if this was turned into a transparent honest insurance, prompted via a question on the payment terminal/online checkout such as "Do you want to pay 1-3% to insure this purchase?" the vast majority of people would click no on the vast majority of purchases because there is already inherent trust involved between the merchant and the shopper. Now add the chargeback pains that merchants go through for credit card frauds and you have what appears to be a sickly system where both shoppers and merchants lose, with the only winners being visa/mastercard & the acquiring and issuing banks they cooperate with. If I buy a burger from a restaurant and its bad, i tell all my friends and i don't go back. I don't need insurance. If I buy a service on steam, i already trust valve fully for those smaller amount sizes, I don't need insurance. My gut feeling is that >99,9% of purchases made via payment cards are not relevant to insure meaning following the simpler risk model of cash for those would work just fine.

gethly 1y ago
Chargebacks are indeed quite detrimental to merchants as they are the ones paying it. And if you have bad customers(maybe competition is trying to put you out of the business), you might get deep into red quite fast. Usually it is anywhere between 20 and 50 euros, which is crazy when it is just a reverse of the bank transfer which is the tech in the background. Like if you run a small online store and you sell 10€ items where you make a 5€ pre-tax profit, having a 20€ chargeback on such sale can be really dangerous.
- maccard 1y ago
  > Usually it is anywhere between 20 and 50 euros, which is crazy when it is just a reverse of the bank transfer which is the tech in the background The point is it’s punititive to the merchant. You’re incentivised to avoid them pretty much at all cost
ta12653421 1y ago
this insurance stuff rarely adds anything on top you would benefit of. and for large transactions, most wont use a credit card (like buying a house)