| Huh. So what happens (is supposed to happen) to merchants in the event of a chargeback? * Paypal purportedly credits sellers if the seller proves they shipped / sold something [1] * Square does not necessarily credit sellers and may pull funds from a bank account [1]. (May have changed since the article?) * Visa protects merchants from fraud-related chargebacks if the online sale is "verified by Visa"[2]; if not, the merchant may have to suffer the loss. In particular, if the card was physically present, the merchant seems to lose if they screw up any of the little details in the charging process. * Amazon protects merchants if the transaction occurred according to their policy and the merchant can prove they shipped goods or delivered a service [3]. I imagine if you embed Amazon Payments into your site as it's intended and sell legal stuff, you're fully covered against fraudulent buyers. So it looks like Venmo (and likely Snapcash) are unique in offering such little fraud protection. Probably due to how their User Agreement works (i.e. they're not meant for merchant selling at all). Also why they can offer no-charge transfer services. What's probably happened here is that these new services lack regulation and thus have no requirement or incentive to inform users about the consequences of chargebacks. I hate to say we need more regulation, but for Eran Kimchi (Venmo head of fraud) to say "You made an innocent mistake, and you paid for it" is not an acceptable outcome; Venmo is definitely guilty of negligence here. [1] http://alexshvartsman.com/2014/02/11/screwed-by-square/ [2] page 82 http://usa.visa.com/download/merchants/chargeback-management... [3] https://payments.amazon.com/help?nodeId=73479#fdcp_how |