Then it brings with it a whole list of different problems, like being incredibly susceptible to buyer fraud, the cost of which everybody then has to eat.
Meanwhile it causes the payment processors to not want to do business with merchants who get a large number of chargebacks, even if the problem isn't with the merchants but with their customers. In other words, it discriminates against merchants who do business with disadvantaged clientele who are more likely to have payment issues.
A merchant getting excessive numbers of chargebacks is not in and of itself an issue if you have all your ducks in a row.
I mean it's an interesting enough heuristic, but can you provide an example of a processor that would refuse to business with someone because they had excessive chargeback, but also had the information in place to prove the purchases in question?
I mean, if you've got crappy customers, I can understand where you're coming from, but I think your choice of customer base to market to may be more in question then whether the system as a whole is fit to transact in.
I don't have much firsthand experience in it though, so I'd be thrilled if you could share some insight on it.
> I mean it's an interesting enough heuristic, but can you provide an example of a processor that would refuse to business with someone because they had excessive chargeback, but also had the information in place to prove the purchases in question?
The problem in many cases is the difficulty in proving the purchases. For something like digital content, the only proof you'd really have is some server logs showing that it was transferred, which are naturally trivial to fabricate because they're entirely under the control of the seller, and so the payment processor may not give them much weight.
> I mean, if you've got crappy customers, I can understand where you're coming from, but I think your choice of customer base to market to may be more in question then whether the system as a whole is fit to transact in.
But then you run headlong into the efficient market hypothesis, because when everybody else is avoiding that customer base for those reasons there is less competition and thereby greater opportunity.
Also, from the perspective of the customer, just because 30% of similar customers are dirtbags doesn't mean you are or that you don't want to be able to buy your stuff.
I did not say it does not have any problems. The poster said that they don't understand why the whole system even works. I simply explained the mechanism by which it currently works. I did not say it was flawless.
Meanwhile it causes the payment processors to not want to do business with merchants who get a large number of chargebacks, even if the problem isn't with the merchants but with their customers. In other words, it discriminates against merchants who do business with disadvantaged clientele who are more likely to have payment issues.