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Mastercard Cuts Off Third Party Transactions
strredwolf writes "Mastercard has cut out third parties from charging on behalf of merchants. This affects folks paying their auctions and goods via Paypal, Yahoo! Paydirect, and potentially ebay's Billpoint. It may also affect Paypal's Mastercard-backed Debit Card, but there's no word from Paypal as far as I can tell." Word has it paypal is trying to negotiate a side deal with Mastercard.
I tend to believe her about this sort of thing, I'm not too worried. They're just moving for some more control.
Cheers,
Backov
In the law there is no overlap between theft and copyright infringement whatsoever.
Sounds like Master Card is hurting, and is trying to drum up some more business or something to cover the nut.
The information doesn't seem to have made their press release archive yet
"It is a greater offense to steal men's labor, than their clothes"
Remember, you have to be a bank to issue a debit card. And it's been established PayPal isn't a bank -- which is exactly why, if you turn over your PayPal credit card, it isn't issued by PayPal.
It's issued through a bank, and they deal with MasterCard. It's basically just another branded card, like a baseball Visa, or a leopard print Discover, or a Star Trek mastercard. Major League Baseball, forest animals, or Paramount don't manage your money -- the bank issuing the card does.
In fact, that card isn't even issued to you. It's like a business card. From the back: This card issued to X.com, through Bank One, Indiana, NA, pursuant to a license from MasterCard International.
And the "license from MasterCard International" has nothing to do with the recipient, but the bank offering the card. They have to be licensed to use the logo and the network -- about the only card you won't see that disclaimer on is an AmEx, because they issue their cards directly.
- This is not definite yet until May 1. PayPal, eBay, etc may be able to negotiate - as it says in the article
- This does not in any way affect any debit cards. Period.
Paypal currently has several thousand dollars of mine tied under a 'restriction', when all I tried to do was transfer the money from my account to one of my familly members. This worked perfectly with a small amount of money, but the larger amount has caused me extreme grief. Paypal has had the money for a week now, and they refuse to return it to the original account (mine), even though I have jumped through all the hoops they set out for me - some of them several times. They have sent me on a wild goose chase of busy fax machines and even busier phone numbers, so that I can 'appeal' their 'restriction' of my funds. They requested documentation be sent by fax, to prove I am the owner of the account, and I did - three times. Dozens of emails went unanswered. Finally one email arrived informing me that my case would be forwarded to the 'appeals' department within 48 hours. No word on how long it would stay there. In the meantime, Paypal has my money, and is collecting interest on it.
I believe that Paypal is intentionally going slow, and that much of the procedure they have imposed on me is merely a pretext to allow them to keep my money for a longer period, and collect interest on it. This is done under the guise of fraud protection, but I ask you, what harm would there ever be in returning money to its original owner, even if there was some suspicion that the money was not in fact transferred by the original owner. (In my case of course it was.) They collect the profits while I wonder if I will ever see my money again. It does not help to know that Paypal is not regulated as a bank, in fact, not regulated at all.
Will Paypal compensate me for my time and expense in retrieving my money? Will they ever give me my money back? You tell me. I do not know. At this point, I would like to sue Paypal, if I could figure out how to do it. Unfortunately, I am not a U.S. citizen, and so I can not join one of the class action suits currently in progress against Paypal.
I have only one more thing to say at this point: do not use Paypal.
Life's a bitch but somebody's gotta do it.
"they make more money from chargebacks"
Huh? Credit card companies make the most money on interest charges from people who don't pay their bill in full. It looks like this move by Mastercard is designed to reduce chargebacks. They looked at their records, found a high percentage of fraud and chargebacks relating to third-party transactions, where they have little control because they can't deal directly with the merchant, and said, hey, let's fix this. If they were making oodles of money on chargebacks they wouldn't be trying to reduce them.
Perhaps you mean they charge the merchant a bigger transaction fee when there are chargebacks? That seems fair. It is the merchant's job to verify that the credit card is valid and that an authorized person is using it. That's the way it is with bricks-and-mortar stores, where they are supposed to check your signature and sometimes your drivers' license. Why should internet stores get to follow different rules? Can't verify cuz you can't read the signature? Find another way. MC, Visa, etc. give online stores a reasonably reliable way to accept payments. Don't like it? Then quit taking credit cards and make your customers mail you payments, see how many sales you get. Don't whine about how the system isn't set up in your favor.
Since internet transactions don't have a signature, yes, it IS easy for the merchant to get screwed. But it's their choice.. they know the temrs
:).
Most merchants don't though. It's very similar to how often an EULA is read/understood. What a merchant should do is ask many questions of the company that processes their transactions for them. I.e., explain in detail what your company does to reduce the red flags or "gotchas" that come with being a merchant.
The MasterCard announcement is nothing new. Processors have known about this for months now and I've seen numerous internal e-mails on making sure our merchants are notified.
The assocations are starting to come down hard on the "master merchants". For MasterCard this is true in different regions too. Besides the U.S. (N/A) region, this new rule is in effect for Latin America/Caribbean (LAC) region. I'm unsure about Europay (the European region for MasterCard), as we're not processing merchant transactions over there yet (damn you B.T. for messing up our network connections
The problem with Internet transactions is the same that merchants have for card-not-present (aka mail-order/telephone-order) transactions. You get a crappy discout rate, larger reserves, and bear the responsibility for most fraudulent transactions. Address verification (AVS) is only good for U.S. card holders (for the most part), and SET and 3DSET have been embraced like the plague.
What can an online merchant do? For one, understand the fraud for your industry and account for that in your cost model. Digital goods == higher risk. But that doesn't mean tangible goods aren't at risk either. You can ship goods to someone, get a copy of the signed FedEx delivery receipt, and still lose when the customer's card issuer submits a chargeback to you. Note: this is with traditional card products like yourt standard VISA/MC/AMEX and not the new fangled chip cards.
Europe is defintely ahead of the U.S. for merchant protection. PIN and chip-based debit is big, which assumably means better protection for merchants.
Tip: Make sure your online ordering systems collect things such as CVC, CVVS, and other card verification methods (the 3 digit number on the back of the card that's not embossed). Better yet, have your processor provide you with a list of association updates that affect your business. These come out twice a year in the spring and fall.
Dealing is credit products is an NP hard^H^H^Himpossible situation sometimes!
I agree that this move by Mastercard sucks but my neighbor happens to be a VP for them. He said it had to do with the number of charge backs they have been getting. Also, Mastercard is officially a non-profit corporation. Every dime they take in is spent within the fiscal year. I used to be a consultant at Mastercard and they were constantly starting up new software projects and doing charity promotions to insure that all the funds were spent Unfortunatly, the down turn in the economy has currtailed their efforts a bit. However, look at their website and check around. You'll see that they are a non-profit.
it is NOT a non profit corp. it does sponsor some events. for a look at the financial figures :d 200 1.html
http://www.mastercardintl.com/about/press/2qyt