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The underground world of credit card network exploitation

chargebackstop.com

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Re: The underground world of credit card network exploitation

#11

Post by thedangler »

I worked at a company who's server was hacked and they stole the API keys and did carding on it from the server. Paypal tried to tell us we owned them $100,000.00 in fees. We were only running $4500.00 payments at most 5 times a day for course registrations. The hacker ran auths on random CC number for $1 every second.

We didn't have to pay the fees for carding but they don't care.

They do not care because they make money off fraud.

We had settings stating we only have orders between $2500 and $6000. But they do not check auths lol

Crazy.

This was back around 2010 and stripe was not available in Canada at the time.

Re: The underground world of credit card network exploitation

#12

Post by chasebank »

Re: Chargeback fees - Visa acquired a company called Verifi a few years back. Their new products are Rapid Dispute Resolution (RDR) and Order Insight. RDR effectively lets you automatically refund a transaction before it gets turned into a chargeback and Visa charges a $4 fee (Assuming your MCC code is not high risk). Order insight lets you provide certain data about a questioned charge immediately and if the customer has had 3 previous charges with you, a chargeback CANNOT be issued.

It was a really easy decision for our business based on win rate, avg order size and chargeback fees. Plus now we don't have to constantly worry about Visa's or the merchant bank's 1% chargeback rule. This only applies to Visa charges but it represented about 50% of our total volume.

One last note - Visa is basically taking away a massive revenue source for the processors. If your processor is TSYS, they are trying to charge a RDR fee of $10.

Re: The underground world of credit card network exploitation

#13

Post by chpatrick »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

I've lived in Europe my whole life and I've never made an online payment with a card reader (even though my ThinkPad has one), or know anyone who has.

Re: The underground world of credit card network exploitation

#14

Post by [deleted] »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

[deleted]

Re: The underground world of credit card network exploitation

#15

Post by platelminto »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

As someone whose lived in multiple European countries since I was born, I also don't understand this comment. I don't know anyone who uses these smartcard readers at home. I don't think it's common at all.

Re: The underground world of credit card network exploitation

#16

Post by deevolution »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

Probably helps maintain dollar hedgemony by allowing a wider swath of the global population (criminals, poor people) to use the system unencumbered.

Re: The underground world of credit card network exploitation

#17

Post by pxx »

snarf21 wrote: post #8
myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

It is just lobbying preventing good policy. If we moved to chip + pin, we'd get rid of almost 100% of CC fraud. But retailers don't want the friction so instead the consumer pays for the fraud instead.

Why do you think this requires a government mandate? What evidence do you have of counter-lobbying as opposed to simple consumer and retailer preference?

Re: The underground world of credit card network exploitation

#18

Post by mnd999 »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

We do get `Verified by Visa` or Amex SafeKey on most transactions though.

Re: The underground world of credit card network exploitation

#19

Post by [deleted] »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

[deleted]

Re: The underground world of credit card network exploitation

#20

Post by criddell »

myself248 wrote: post #4

Why does the US still accept hand-typed cards? My friend had a USB smartcard reader in like 2001. He'd dip his AmEx to perform a transaction on his PC. It's twenty years later and the industry still hasn't caught up? What's different about Europe that they seem to have figured this out decades ago?

If the cost of preventing fraud exceeds potential losses from fraud, maybe it makes more sense to let the fraud go through.
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