Is Merchant Responsible for The Stolen Credit Card?
Is merchant responsible for the stolen credit card?
The vast majority of people are using their credit card for transaction these days. Almost any business that is looking to succeed is required to be able to offer consumers the ability to make their purchases by use of their credit or debit card. Without it, that business would fail.
A Good Service Gone Bad
This is an extremely convenient way for a business to allow consumers to make a purchase. The credit card company provides the business organization with the payment, after removing fees, making it easier to be able to keep track of all purchases. This can be a lot easier than trying to count and process large numbers of cash or check payments daily.
However, as nice as this system is there are some challenges that come with it, most of which relate to when the credit card that is being used for the transaction is found later to have been stolen. This is becoming a more serious problem each and every day, as thieves are not only stealing people’s credit cards, but also applying for the credit fraudulently.
The purchases they are making are leaving somebody in limbo. Who winds up being responsible when the credit card that has been used is proven to be a fraudulent purchase?
The Risk to You
Before discussing the risks that businesses can potentially incur, an important history lesson is necessary. A few years ago, Target was found to have had poor security which led to thieves stealing the credit card information of consumers and using it at Target and other locations. Because of its inability to provide adequate security, the store became liable for all of the costs incurred. Plus, they lost all of that merchandise.
This was devastating to Target, but just imagine what it could be to a small business. Not only are they out the merchandise that has been purchased, but the payment processing centre and the financial institution that held the credit card can hold the merchant responsible for processing the transaction in the first place. It can literally put a business out of business.
Why Many Only Accept Visa or Mastercard
One of the primary reasons why a business will only accept Visa or MasterCard is because the contracts with those companies put the entire burden for fraud on the bank or financial institution that issued the card. The business is not responsible for it all. They may be out the merchandise but are not responsible for the transaction.
As an additional safety net, there are card processing services that provide fraud protection. This helps to reduce the risk of fraud while also providing a form of financial protection should fraudulent transactions occur.
In these kinds of cases, it has been found that less than 4/100 of 1% of transactions that are fraudulent actually get through. They are blocked right away, ensuring the merchant is not out of any merchandise and the authorized credit cardholder does not wind up having a payment appear on their credit card that they did not make payment for. It is a service that almost any good business will opt to take to protect themselves. Need more information on this topic, click here.
Whether your business is just a start-up or an established one, GB Payments can help you take payments the safest and most convenient way! Wondering how? Visit the official site of GB Payments