Hacker News Reader

As I understand it, most of the fees associated with US credit cards don’t actually go to the parties that are on the hook for disputes.

View on HN

Most fees go to the issuing bank. The issuing bank is usually on the hook for customer disputes. So I think you are mistaken.

AIUI, the issuing back generally recovers the amount of the chargeback from the merchant, possibly through some intermediaries. See:

https://usa.visa.com/content/dam/VCOM/global/support-legal/d...

> If the dispute is valid, the acquirer deducts the amount of the dispute from the merchant account and informs the merchant.

Also, keep in mind that companies like Stripe will not only recover the disputed amount from the merchant but will also recover a fee from the merchant!

I mainly meant the processor has to spend money handling the disputes. They may eat the cost too if it's small, but usually that's on the merchant. They're more likely to eat the cost of fraud.

Reply on news.ycombinator.com