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by mike_d
762 days ago
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It's not that simple. Charge backs are a game of hot potato originating at the card issuing bank and making its way back to the merchant. If Stripe instantly pays out funds to a merchant and there is a charge back, they have to claw that money back. This is normally done by drafting the funds from the deposit account, but if that is empty Stripe (or whatever processor) eats it and it becomes a collections issue. Processors normally handle this by holding funds on suspicious transactions for 180 days (the max chargeback window). What is suspicious? For most processors it is literally whatever adds up to a [fraud rate]% of your volume over a 180 day window. Stripe doesn't do this because they are "the friendly processor" so they just take a bigger slice and cover losses out of that. source: I spend a non-trivial amount of time monitoring threat actors and figuring out exactly how they are doing bad stuff, which means understanding the risk/abuse side of the house |
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