Chargeback – the return of funds to a consumer. It’s his protection guarantee and last line of defence. Chargebacks occur mostly due to fraudulent activity or consumer disputes.
A chargeback is usually requested by the cardholder and initiated by the card issuer. Most common reasons are that a consumer doesn’t recognize a specific transaction or isn’t satisfied with the purchased service/product and wants his money back.
Merchants usually prefer refunds, which are the same from the customer’s point of view (he gets his money back), but a lot better for the ebusiness owners. Merchants have to pay a relatively big fine for every chargeback; furthermore, lots of chargebacks make a merchant a risky one for acquirers, which can lead even to the end of their cooperation.
Of course if a chargeback request is unfounded, the merchant can prove this (he has a time limit to respond to a chargeback request) and convince the acquirer that there’s no reason to reverse the transaction.
Bottom line, being a cardholder you have the full right to request a chargeback whenever you think you deserve your money back. However, asking for a refund will make you more friendly towards the merchant and there’s a good chance you’ll get your money back (that is if you have a good reason).
And being a merchant… Simply be aware of this mechanism and provide good quality service or/and products.
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It’s very important to choose a proper business model at the very beginning of your online payment fun. Your success depends on the method you select. Fortunately there are a few possibilities you get to choose from. Each one is assigned to a different online business type.
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When you start your own business, online or offline, you need to specify which payment methods you want to offer your customers. And you’ll have no problem finding a lot of information about payments providers, new financial products and services or news from banking market. But the point is to reach a valuable source of information.
Card Academy Bulletin is a Payment Card and Financial Services newsletter published by CAC Card Academy. Being located in Copenhagen, Denmark, they gather fresh news not only from Nordic and Baltic Rim countries, but also from the rest of the European and global market.
CAC organizes also payment industry conferences in Baltic and Nordic countries (such as Latvia, Iceland, Norway, Sweden or Denmark), which attracts companies representatives from payments and banking industry. It’s always nice to meet your business partners face-to-face, especially when you entrust them your money.
To find more information about Card Academy, visit http://www.cac-cardacademy.com/ and subscribe to Card Academy Bulletin.
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Payment industry – especially recently – evolves really fast. Just read some headlines on any of the news sites: “Squareup.com is going to…”, “NFC in new model of smartphone…”, “PayPal is buying…”, etc. That’s why I think right now is the best moment to talk about the future of this industry. So, where is the payment industry going?
Right now we can consider and talk about three possible (or maybe better – obvious) directions.
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These verbs – credit and debit – seem to confuse people. So let’s see if one shall be happy if the bank teller checks their account and says for example:
The full amount of the purchase has been credited to your account.
Surely, as it means that the full amount has been added to the account. As a noun used by accountants credit means an addition to certain accounts.
On the other hand we have a verb debit and the incoming example. Merchant has recently refunded a purchase price of 123 USD to one of his customers but cannot see it in his billing statement, therefore asking the acquiring bank if his refund was successful. The acquiring bank replied:
The merchant has been debited on 12.03.11 with the amount of 123 USD.
So the money have been withdrawn from the merchant’s account and the refund was handled properly.
When a bank account has a positive or debit balance,it means the bank owes money to the customer; and if it has a negative or credit balance – the customer owes money to the bank.
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Since the 31st March 2011 card issuers do not accept Solo cards anymore. This is a result of MasterCard’s Maestro Alignment Migration program. To make the long story short – here are the details:
What’s the migration program?
In general, it means that MasterCard is cleaning its Maestro closet. Apart from the changes to Solo Card Scheme, this also includes the fact that domestic Maestro users are being transferred to the international Maestro platform. Maestro UK is quite a significant transfer here. It’s now sort of aligned under Maestro International, so merchants shall offer Maestro International without distinction into domestic UK.
I’m a merchant – what does this mean for me?
If you haven’t done this already, you should stop offering Solo as a payment method; also remove the Solo card type and logo wherever it is displayed. Furthermore, you should be aware of some issues.
- Since the 31st March 2011 you’re not able to do Solo refunds.
- If you’re still processing any recurring payments with Solo cards, you should contact your customers and request alternative payments from those cardholders.
- Ensure all pre-authorised transactions are submitted for settlement.
What about card numbers?
All BINs from ranges 676703–676799 are ceased since the 31st March 2011. Also two BINs in the “6767” range have been allocated to Maestro cards, and these are: 676770 and 676774. This information is particularly important if you validate BIN ranges.
This information means that also PayLane stopped offering Solo as a payment method.
For further information you should contact your acquiring bank.
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Card Security Code – usually called CVV (Visa) or CVC (MasterCard); it’s a three or four digit code located on a credit card, but not encoded on the magnetic stripe. If a client can provide such a code, it proves that he actually is in possession of the credit card and didn’t use, for example, a card number generator or a copy (skimmed) of the card.
The most common code is CVV2 (or CVC2) used in card-not-present transactions. For Visa, MasterCard, JCB, Diners Club and Discover credit and debit cards, this is a three digit code printed on the back of the card. American Express differs a bit – they have a four digit code printed above the credit card number.
Also the names of the code differ. Apart from CSC we have:
- CVV2 (Card Verification Value) for Visa,
- CVC2 (Card Verification Code) for MasterCard,
- CID (Card Identification Number) for American Express and Discover.
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Issuer is an institution from which the consumer gets his credit card. Usually it’s simply a bank (hence the popular term issuing bank), but it might also be e.g. a credit union. Such bank is associated with credit card brands, like Visa, MasterCard or American Express.
The issuing bank is actually the institution, which grants you the credit. So they are the ones, who check your credit history, debts. And later they decide what your credit limit is.
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