WikiLeaks wins case against Visa
rt.com
rt.com
So, each payment that Visa or Mastercard process comes with a risk. If that payment was made with a stolen card, Visa and Mastercard are on the hook for it. Because of that, for example, the fee the merchant pays per transaction can be wildly different depending on its nature.
In-person transaction with a signed receipt at a coffee shop: pretty safe. Internet payment: riskier. Require a CCV from the customer, a bit safer. Customer is from a foreign bank? Risky again. Online pharmacy: even riskier. Check this out: http://www.mastercard.com/us/merchant/pdf/MasterCard_Interch...
Merchants also are subject to credit checks... they do a lot to make sure they won't be on the hook for a bunch of chargebacks.
Some categories of purchase are considered too risky to even consider. From Visa/Mastercard's perspective, if you're going to be receiving a ton of donations from paranoid hackers who took down your own website and probably think they're being tracked and monitored by the US government (which they very well may be), it's probably safe to guess there may be some stolen card numbers in there and are not going agree to let payments to Wikileaks go through their system.
So, Wikileaks and their data host came up with a brilliant idea: their host, DataCell, will sign up to receive payments with their credentials, and then it'll give the money they raised to Wikileaks. They entered into a contract with Valitor (which isn't a subsidiary of Visa or anything: it's just one of three card processors in Iceland, who handles acquiring services for Visa and Mastercard) saying that they will be collecting payments for their data hosting services.
They write a donation page and get everything set up, test it out, and then after a couple weeks turn it on. About a week after that (or possibly the same day, according to one source http://www.bloomberg.com/news/2012-07-12/iceland-court-order...), Visa and Mastercard call Valitor up... kinda like how they call you up if you make an unexpected $1000 purchase in another country out of the blue. They say, "hey, you guys are sure selling a lot of servers, or whatever. What's going on there?"
Valitor has to come clean and say that people are paying Datacell with the expectation of that money going to Wikileaks. Visa and Mastercard say, "oh, that's pretty clearly not what we signed up for here: this is, like, millions of high-risk payments. You're gonna have to cancel that account." And they do.
So now Datacell sues them for breach of contract. The contract pretty clearly states that Datacell is not allowed to use their account to process payments for other parties. This is Valitor's only defense. Datacell's argument is super weak. They say they are not processing payments for other parties, but that their core business includes allowing their customers to collect payments. The payments intended for Wikileaks are part of the principal business and they're collecting that money to offset the cost of paying Wikileaks.
The judge pretty much ignores that argument but finds in favor of Datacell anyway. Valitor had full knowledge going into the contract that DataCell was going to be processing payments for Wikileaks. Its employees provided help in designing and creating the Wikileaks website, and they tested the website for them. Because Valitor knew this was going to be used for Wikileaks fundraising, they cannot now argue that that isn't allowed by contract.
So, Valitor will appeal this decision, but if it holds up, they'll probably just wind up going out of business (unless they decide $6000/day is affordable). Visa and Mastercard are just gonna turn them down as customers because this was some fraudy shit they pulled. They'll go out of business, and Icelandic merchants will just have to sign up with one of their two competitors instead.
Except not really. The bank passes on full liability to the merchant that accepted the payment. When the chargeback occurs, the payment is taken back from the merchant, plus a bunch extra as a chargeback fee to cover the costs of pushing around the forms between banks and taking the report from the cardholder over the phone. Knowing this only works when the merchant still has the money to take back, any hint of a merchant going over 1% of their monthly volume in chargebacks will generally trigger the bank to start holding back some or all of their payments in a reserve fund to cover the potential chargebacks.
The only way for the bank to be on the hook is if the merchant (like Wikileaks) passes the risk assessment enough to start accepting cards, and has a clean chargeback record up until the point a massive number of them come in, AND when the bank tries to recover that money, the merchant's already drained their bank account so there's nothing to recover.
If that happens, the bank's screwed, but Visa's still perfectly happy having taken 1-4% of every charge, even the fraudulent ones, with no liability for the stolen cards.
Why bother expanding on that tidbit? Because if Visa has zero liability, then why would Visa corporate be telling anyone not to accept cards from Wikileaks? That's not normal. The people that decide who can accept Visa cards are the underwriting departments at individual banks that back merchant service providers, not employees at Visa Inc.
Visa Europe (a separate company from Visa USA) would likely have to assume liability for chargebacks in the event that the acquiring bank went out of business without transferring it's Visa business to another bank. I'm not sure if such a situation has ever happened though. In general the liability goes: Merchant -> Payment Processor -> Acquiring Bank -> Visa.
Anyway, I didn't mean to speculate on motivations. I just wanted to explain that this is just some small Icelandic card processing company that got sued by a small data hosting company after they both conspired to funnel Wikileaks payments through as payments for data services and Visa and Mastercard objected.
It's far from the WIKILEAKS DEFATS VISA headline, especially since neither were party to the lawsuit.
unsurprising coming from an arm of the Russian government that employs Julian Assange.
The poster claimed that Mr. Assange is something like a russian spy tool. The link you provided is to a pretty generic "channel" on a website pretty much discrediet by most posters in this thread.
There should be something more tangible, and credible, for such an accusation.
I'd appreciate something more specific. Thanks.
I'd downvote you if it was not for the rare beauty of this display of cognitive dissonance and apologetics.
Sure it'd be better if they could hold Visa/Mastercard directly responsible, but obviously they can't (yet?).
After edit: Now I've had time to check some other news sources.
http://www.washingtonpost.com/business/lawyer-wikileaks-wins...
"The implications of the judgment, which Valitor plans to appeal, weren’t immediately clear.
"Even if Valitor is eventually forced to comply with the judgment, it isn’t clear whether Visa or MasterCard would allow their customers to make donations to DataCell or WikiLeaks. Both companies have refused to deal with WikiLeaks for the better part of two years, leading to allegations that they had bowed to U.S. pressure to starve the organization of funds."
http://www.wired.com/threatlevel/2012/07/wikileaks-visa-bloc...
"The Associated Press reports that Valitor can appeal the decision, but even if it chooses to comply with the judgment, it’s not clear that Visa or MasterCard will still allow customers to make donations to DataCell or WikiLeaks."
Understatement of the year.
The problem with American media is certainly not limited to Fox.
How convincing do you think these epigrams actually are? The reality is that the US media market provides a vastly more credible stream of current events information than Russia's ever has. Does that make the US media credible? It's hard to say. Russia is a very, very low bar to clear.
A false narrative is a false narrative, regardless of how skillfully it is intertwined with truth.
That's not to say there aren't problems with the news industry in the US and elsewhere, but it's not some giant conspiracy either.
I hope you can agree that American media can be influenced, for profit, by monied interests. If you agree, then you acknowledge the system I have described above.
As for your complaint about the sinister tone, I think offering deference to those with money rather than those with truth is quite sinister. I think it's sad you disagree.
The US of Murdoch comment was a brash characterization, but how does rehashing the state of Russian press address the idea that US news sources lack reliability? All news sources should be treated with skepticism, Russian or not.
Not at all. It is just about which is most valuable to VISA. Not losing the Icelandic market or complying with the wishes of the US government.
This is the reason why not just European companies pay up when fined by the European Court. You have the choice to either comply and pay the fine or to leave the country (perhaps getting all your assets there confiscated).
It might be worth leaving Iceland since it is a quite small country. It all depends on how much complying with the US government is worth and how big the PR hit of leaving Icleand is.
(I actually read the opinion.)
It's protected speech if you blog saying "Terrorist organizations should adopt non-violent methods of resistance instead of blowing up cafes. Here's how it might work as an overall strategy, using Hamas as an example...."
However if you print this out and mail it to Hamas, that's not protected, and may be offering expert assistance to a foreign terrorist organization....
Apparently the First Amendment no longer protects the question of who you talk to.
It speaks to our "obedient sheep" nature that there has been no outcry about this.
Some will say: "Well Visa and MasterCard are private companies", which is technically true of course, but when they handle the majority of all private money transaction there are other factors at play.
Two days later, it's the second highest story on the Hacker News frontpage.