[tyingq]

>Yes, but isn't this exactly what Upwork gets paid to take care of?

I imagine the big value proposition for sellers is the marketplace/customers. But yes, they are being paid somewhat for vetting buyers. I'm not saying the freelancer should eat the costs.

I am saying, though, that banks dropping 100%+chargeback fees on the merchant is pure bullshit. Basically, because of the fees, they MAKE money on chargebacks. And as mentioned, they know things like past transaction types, previous chargebacks, amounts, other current activity, and so on that the merchant doesn't. I think they should have to eat at least some of the costs when this happens. Especially when it's multiple transactions over time, like in this case.

I'm pretty sure the technology behind detecting fraudulent transactions would be very different if the credit card companies and banks had to eat some of it. Current state, they don't even ask for an IP address for authorization of a payment. How does that make sense?

[murderfs]

I think you're misunderstanding the structure of the credit card system a bit.

> And as mentioned, they know things like past transaction types, previous chargebacks, amounts, other current activity, and so on that the merchant doesn't.

There's two banks in the flow: the issuing bank that issued the card to the customer, and the acquiring bank, which provides the merchant account. These are often (especially for online businesses) different banks.

> I am saying, though, that banks dropping 100%+chargeback fees on the merchant is pure bullshit. Basically, because of the fees, they MAKE money on chargebacks.

The issuing bank doesn't charge any fees, they just take their money back. The acquiring bank absolutely does not want to be making money on chargeback fees: they get fined by the card network if their chargeback rates are too high, and will fire you as a customer if you maintain elevated chargeback rates (and they're certainly not going to do a 100% fee on $12.5k. It's usually a fixed amount that's putatively paying for them to deal with the issuing bank.).

> I'm pretty sure the technology behind detecting fraudulent transactions would be very different if the credit card companies and banks had to eat some of it. Current state, they don't even ask for an IP address for authorization of a payment.

A lot of the time, they do eat the fraud. Oftentimes, the issuing bank won't actually file an actual chargeback when their customer reports fraud, because they need to actually arbitrate the case, and if the cost of doing so is sufficiently large relative to the actual value, they'll just absorb the cost internally.

I do agree with you that the state of online payment security is rather bizarre. The card networks have basically required chip cards for physical transactions by charging extra fees and pushing fraud risk onto the merchant if you swipe the magstripe, but they've done basically nothing about card not present online transactions.

[tyingq]

I'm lumping both banks and the likes of Visa and Mastercard together, yes. Because that is collectively who is making the problem solely the merchant's problem, I assume deliberately. They all have cross-agreements, so they could make this better.

>if their chargeback rates are too high

I've paid a $25 chargeback fee for a $15 transaction. It's still bizarre to me that I pay them though. I'm already on the hook for the whole transaction amount, even after doing AVS, my own pre-shipment fraud checks , etc. And, if I shipped the item, I'm out that cost as well. It's just so asymmetrical.

>they've done basically nothing about card not present online transactions

That's my main point. And given that the merchants (often? usually?) eat the cost, they have no incentive to change that.

Edit: A couple of related anecdotes.

I had one customer who just happened to be in the same city file a chargeback for "item not received". The item in question was a custom item, described in the charge, and sitting in their shop window. I challenged the chargeback with a picture of said item, with the address/name of the business in the foreground. Still lost.

Another item the customer claimed it was broken in shipping and filed a chargeback for "item not as described". It was a fragile item that comes with chains to hang it, but the chains come in a little box...you attach them yourself. The customer's picture of the shipping damage showed the item shattered/broken, but with the chains attached. Who attaches chains to a shattered item? Lost that chargeback too.

[ec109685]

Is there another merchant bank you can switch to that might be more friendly / reasonable in the case of fraud like this fighting on your behalf?

[tyingq]

The merchant bank is typically stuck in the middle for a charge back dispute. It's the owner of the card's bank, or sometimes the card company that's the issue. AMEX, for example, is notorious for siding with their customers no matter what.