Damn, Visa, you must hate vendors

My sister and her husband run a website that accepts donations. They can take payment through Visa and Paypall.

Some enterprising credit card thief has found that if they try to donate $5 to my sister’s website, they have an easy way to find out if the credit card is still valid. If the card has been blocked, they get a notice back saying that the donation can’t be processed. So this person sends my sister a handful of donations at a time. Some go through, some don’t. Probably the numbers from the cards that go through then get sold to others. Most of the time, the cards that go through get reported as stolen, and the charges reversed. No biggie. My sister doesn’t want stolen money. But then she gets billed $25 for allowing fraudulent sales to go through. $25 for each transaction. WTF?? Visa does nothing. NOT A THING.

So now my sister has to go through a list of all donations, and try to find these transations and get them reversed, before the cards get reported as stolen, or she gets billed. She has tried notifying Visa when she sees them, in the hopes that Visa would be proactive. No go. Visa does nothing. NOT A THING.

Let’s take a look at this business model. Visa issues credit to someone, maybe charging an annual fee, definately charging interest on unpaid balances. Visa charges the merchants a percentage of all transations. Visa charges the merchants (like it’s their fault?) for any fraudulant transations. Any disputed charges, Visa bills the merchant for them. This would be the same credit card company that has been making it easier and easier for people to get way to much credit.

So Visa, just what the hell do you see as your responsibility in this cycle? Just to send bills? Why didn’t I think of all of this first. I could have been filthy rich.

“I’m a corporation. My primary purpose and responsibility is to make money for my shareholders. They like your sister’s money as much as anyone elses’s.” – Visa

Putting on my Cyn-O-Goggles, you’ve got a triangle of Visa, the merchant, and the customer, with Visa at the top. Visa’s goal in all this is to get more money for itself, and to do that it has to play nice with the customer. So the merchant’s the one that gets shafted.

Sucks to hear about that, and it is illogical. Checking bills for counterfeits is one thing, but how the hell do you positively check for stolen CCs?

How exactly is the merchant supposed to know the charge is fraudulent?

Is this why so many eBayers now won’t take credit cards via Pay-Pal but will take an electronic check type payment?
That makes zero sense.

PayPal charges a fee for the credit card transaction but it’s free for the bank account withdrawal payment. They probably charge the fee because Visa (and MasterCard and Amex) charge all merchants a fee for the use of credit cards.

Their responsibility is to assume the risk that consuemrs will pay their bills, and to pay the merchants whether or not the consumers pay their debts.

Then go for it. Only one of the credit card companies was first.

How does PayPal handle fraudulent transactions? If they’re more understanding, or at least less onerous, perhaps your sister should drop the Visa merchant account entirely and funnel everything through PayPal.

Even if their merchant fee is a bit more than native Visa, it’s still likely to be less than however many $25 fees.