AFAIK various institutions can create credit cards or debit cards of the Visa standard. So my general question here is “so what actually defines the standard? what sort of requirements exist for the new card’s functionality for it to be allowed to be Visa?”
E.g. suppose company A wanted to create a Visa prepaid or debit card that only did irrevocable payments without possibility of chargeback. Would that be legit?
Or suppose company B were to create a card that will only work when it is full moon if you clap your hands twice, wish upon a star and send them an sms with a secret code.
Does the Visa standard preclude creation of this sort of products? If not, are there in fact this sort of unusual, highly restricted cards out there?
The Visa and MasterCard networks require issuing banks to conform to their standards in order to access their transaction-processing networks and license their intellectual property. So no, they’re not going to let you issue a chargeback-less or werewolf-only card.
How do they go about countering the werewolf issue? For instance, if my bank might refuse to honor a transaction on my Visa card that gets traced to a den of iniquity in Lagos, what is stopping some more restrictive card issuer from stopping transactions that are not done by an sms-sending werewolf during full moon?
Do you think that the Visa standard incorporates explicit rules about what sort of fraud detection policy is and is not allowed?
I do not know what the associations require, but my Bank of America Visa card was declined when I was in Italy, because BOA saw that the purchases were outside my normal pattern, even though it was just a restaurant charge of about $60. So certainly the issuing bank has some latitude for fraud detection.
No idea if this latitude extends to arbitrary restrictions. Another example is my Visa rebate card (from a Verizon Wireless phone purchase) which I can’t use at a gas stations (not sure where else I can’t use it).
I purchased a Visa gift card* and apparently they can’t be loaded with extra money - which is essentially what a transaction reversal would be equivalent to, I guess.
*OTOH, they will validate any address at all, so I could use it in Canada, give a fake USA address and the VISA card would be valid - to establish an app store account before theiPad app store in Canada was available.