Hacker News Reader

Comment by onlyrealcuzzo | Hacker News Reader

Charge backs should also be less of an issue if the purchase is $1. Same with fraud.

The stakes are lower the lower the amount. Who cares?

It's not worth disputing. Fire the customer if it crosses a threshold.

This is a very naive view. Stripe have an excellent page [0] on why this doesn't work. The short summary is that each chargeback will cost you $15 (plus returning the transaction), and if you have more than 100 fraudulent transactions in a month you get put on a monitoring list and if you don't bring the number down your account will be suspended. The stakes are very high for the person accepting a merchant agreement with Visa and MasterCard.

[0] https://stripe.com/docs/disputes/monitoring-programs

> stakes are lower the lower the amount. Who cares?

OP mentioned customer service. Pretty much any American can create 50+ hours of customer support and legal work for no reason at all in payments. Even an irate, clueless customer will waste an hour of your support staffs’ time.

Just give them their money back and shadow ban them from using your store.

And then you get the HN post about you banning some rather well known tech figure because when your system created the issue in the first place.

Stores can ban patrons that aren’t following specific rules :)

Having run a B2C business with recurring monthly payments around $15, I assure you that fraud goes UP with lower payment amounts. You preferentially attract the worst possible customers who bank with the lowest common denominator banks and they charge back like crazy.

Some choice moments: "Please keep my service on, I only charged back because I needed to make rent this month", "I know that wasn't my card, but that b---- owes me money."

And it's hard to fire these customers because they come back with a different card and fake names. They don't care that they're committing fraud; no one will prosecute them for $10 here, $20 there.

The real promise of crypto is to provide a system with 0% low level fraud like this.

Well, in crypto there's still non-zero amounts of fraud if the merchant doesn't deliver their goods or if the sender executes double spend attacks. But theoretical double-spend attacks aside, almost all transactions require some minimal level trust between the merchant and the customer regardless of payment system. In this sense, Cryptocurrency doesn't prevent fraud completely but it does severely limit the extent and direction of fraud.

> And it's hard to fire these customers because they come back with a different card and fake names.

Perhaps it is time to start asking for government IDs before accessing customer service.

How would that work if you validly didn’t make the charge or were charged incorrectly and were calling to give them a chance to fix things?

I once had someone enter my zip code as the payment amount and completely drained my bank account at a time in my life when I somewhat enjoyed eating and if they told me I would have to send them a copy of a government issued ID before they would even talk to me I don’t even know what would have happened. Nothing good I can tell you.

And these systems exist because sellers do fraud too, merchants that don't ship after taking payment, etc. With irreversible payments through crypto you are just pushing all the risk on customers. That will never fly.

If the customer does not trust the merchant, they simply don't make the payment with crypto.

Why, oh why is it so hard to understand the concept of multiple alternatives?

Every retailer with a median transaction size under $20 hates credit cards. Yet with rare exception they all take cards.

The customer chooses the mechanism, not the merchant. To best credit cards you'll have to be more customer friendly.

Come to Berlin and marvel at how many cash-only shops we have.

And if you are talking about internet retailers, can we make an exercise to think of how many new businesses would be viable if transactions of 20 cents were a thing?

Why is that? Is Berlin more prone to credit card fraud than usual for Europe?

Two explanations I've heard: (1) small-shop owners simply do not want to pay the fees to card processors and (2) people are more privacy-minded here and distrustful of both the government and the banks, so they don't use credit/debit cards for purchases as often.

10 years ago I remember either MediaMarkt or Saturn (large electronics/ home appliance stores) not taking credit cards. Now not only most businesses in Berlin take credit cards (I saw a couple of cash-only, for sure)… I found a couple of “electronic payments only” ones.

A lot of shops started to accepted cards because of Covid restrictions, leading to the point of "contactless transactions". Now that restrictions are being lifted, smaller shops are going back to cash only or putting high minimums.

If you don't trust the customer, don't take their business.

Right, shoplifting doesn't exist. Movie theaters run around profitably by getting people to pay whatever they want. They even let them bring their own food. And banks give you a mortgage just because you look like such a trustworthy dude.

How does crypto solve shoplifting?

Banks do credit worthiness checks as part of business.

Movie theaters actually do keep a banned list and enforce it.

My comment was just meant to show the absurd of "not making business if you don't trust the customer"

But that is literally what your examples are doing! Either not doing business because of lost trust or establishing trust before giving money.

No. What I am saying is that for the majority of cases, there is no "trust" involved. There is a protocol that ensures that the exchange occurs properly, regardless of any trust relationship between customer and seller.

How are you supposed to know which customers are trustworty and which aren't?

Last time I got a mortgage I had to turn over financial history and have credit checks run. I have definitely had to pass background checks as a customer before.

Your landlord asks you to post a security deposit.

We literally have an entire credit worthiness sector.

You can also invert this and take trust as a default and only ban misbehaving customers.

So people with low social capital should do what, starve?

Grocery stores are pretty low trust environments.

If you literally are getting banned from grocery stores and starving the answer is probably "the prison warden has a legal duty to feed you".

Thank you for your comment, for a moment I thought I was crazy to believe that it can make sense to have a payment system where merchants are protected.

When I say the majority of anti-crypto people are privileged, it's because of this. They never got to experience life in a world where people nickel-and-dime on a 5 dollar purchase. They can not even conceive of a world where "evil" business owners have legitimate reasons to want to protect themselves, and they can't even see that people will do the most stupid stuff over pettiness or because they think they can get away with it.

>When I say the majority of anti-crypto people are privileged, it's because of this. They never got to experience life in a world where people nickel-and-dime on a 5 dollar purchase.

Ah yes, a classic case of "non-business owner privilege". Most of us are blind to how good we have it.

There are a few million(?) businesses in the world. There are at least 8 billion people in the world. Your average individual isn't going to adopt a payment scheme that protects businesses at the expense of themselves.

> Your average individual

The "average individual" has approx one breast, one ovary and one testicle. Speaking of "average individual" is meaningless.

The important thing is to think of how many business transactions are completed or never initiated due to the existence or absence of an a payment option.

> protects businesses at the expense of themselves

If you browse around this thread, you'll find maybe 7 or 9 other times where I responded to this: of course, for most use cases people will be fine by using the current systems. This does not eliminate the other cases that are not viable with the current systems, such as cases where the risk is negligible to the user on the individual transaction, but the risk to the merchant is too high at scale.

There's also the issue of <$10 services being used explicitly to test stolen credit cards, before they're sold and used for the big spending.

> with 0% low level fraud like this.

It's got its own issues. For example i hope you've got a separate wallet per transaction. Otherwise someone will use their tumbled BTC to pay you and you'll get blacklisted from using it in exchanges.

I think bitcoiners already use a new address for every transaction. They call it "HD Wallets".

>Otherwise someone will use their tumbled BTC to pay you and you'll get blacklisted from using it in exchanges.

This is a non-issue for cryptocurrencies with mandatory obfuscation like monero. Worst case scenario, you swap your tainted BTC for monero[0] and take the monero to an exchange.

[0] https://github.com/comit-network/xmr-btc-swap

Have you explored any crypto payments for this purpose?

This is why I switched to $10+ tiers on Patreon, and later, Ko-fi. Less than that and you get a lot of impulse pledges. Most of them are fine, but it only takes one person who didn't read what was on the pledge page clearly to make trouble. At $10+, you get people who are mostly there for the journey and aren't troubled if you make big changes. The flexibility is worth not getting a few bucks from people who don't read before buying.

You can get fined and kicked off the payment network if your business has an excessive number of chargebacks. The chargebacks measurement is the number of chargebacks, not the amount of dollars chargedback.

These fines can be greater than $100,000 USD. Being kicked off a network such as Visa or MasterCard would be even worse.

Organizations are incapable of properly dealing with "firing the customer" in that manner. You're talking about hundreds of office employees with generic technical knowledge. This ultimately ends up in firing the wrong customers, and when those customers end up being big, your company gets a poor reputation and lack of revenue.

Therefore eating the cost is the most profitable outcome.

Reply on news.ycombinator.com