Comments on: Missing Money and Solving Chargebacks

By: Dan

Dan — Fri, 10 Aug 2007 03:43:43 +0000

Good news for me. I got into the FPS beta. It’ll be a few business days before they approve or decline the application, and before I can finish the bank account verification step.

By: Dan

Dan — Thu, 09 Aug 2007 20:40:59 +0000

Have some patience – the program isn’t even in public beta yet. It wouldn’t make sense for them to restrict it to U.S. cards when Amazon.com, whose accounts the whole thing is based around, operates in so many countries around the world.

By: Roger Stringer

Roger Stringer — Thu, 09 Aug 2007 20:28:53 +0000

The thing with Amazon’s FPS service is they only open their payment system to customers with a US credit card, for me, being in Canada, that both cuts out my participation and quite a few of my customers as well.

By: Dan

Dan — Thu, 09 Aug 2007 19:45:21 +0000

I identified a fraud account with a score of 0 yesterday; MinFraud was OK with it, while I knew other indicators meant it was definitely a stolen card. I’ve also had chargebacks for as little as $1.95 — the cheapest order someone can place to test if a card is working. If I were to do phone verification, it would need to be on every credit card order.

By: Jason

Jason — Thu, 09 Aug 2007 19:39:31 +0000

Dan, an important question is: How much of your sales come from the countries that are not supported by PayPal? Also, from my experience, those are the countries that mostly perpetuate the fraud anyways. But, I guess with a stolen PayPal account it doesn’t matter what country you come from, only what country the account is from. Hum… Chargebacks tick me off too.

Another question. What percentage of fraud comes from clients with a low fraud score? Are most of them coming from the middle ground? Maybe you can implement the phone verification for only those with a middle fraud score?

By: Zach Holman

Zach Holman — Thu, 09 Aug 2007 10:54:30 +0000

Although they do have ample APIs and supporting documentation, from a cursory glance it seems. But yeah, Amazon in particular is getting pretty interesting. S3 is extremely interesting… a bucket-load of top sites are using it. I kind of wish I had some use for it- it looks like it can be pretty helpful.

I think I’ll let you check out FPS first… with things like financial transaction systems I don’t mind not being the first-mover here. The blogosphere seems to like the idea so far though.

By: Dan

Dan — Thu, 09 Aug 2007 08:23:34 +0000

I think that’s accurate. I think the closest industry is web hosting which faces many of the same problems I do with fraud. Stolen cards are being used to buy things that can be used immediately to make more money. Often it’s clearly a double hit — web hosting set up the same day advertising is bought at one of my sites, and that web hosting is used to house a phishing site, or an innocuous looking site that later has adware/trojan installers added to it once the order is approved. The infected machines remain beneficial to the fraudsters even after the cards they used are canceled.

I am definitely following Amazon’s payment service. I tried to get into the beta but it was already filled; I waited long enough and got into the EC2 beta, so I’ll be patient for now. I’m very excited about the platform Amazon is building out, and the fact that both Google and Microsoft seem to be building out in the same direction: computing, storage, and service platforms for the rest of us to run our services on. Amazon’s FPS offers many of the same benefits as PayPal, with Amazon’s millions of customers a few clicks away from paying, and the burden of fraud screening on them, although it sounds like integration will be more difficult.

By: Zach Holman

Zach Holman — Thu, 09 Aug 2007 08:18:11 +0000

I’m presuming much of this stems from the fact that you offer a service that is necessarily quick and intangible (in that you can’t recoup what you lose)? I’m probably going to head into credit card territory for the first time with a new site in the next few months, and I’ve been reading all of your issues hoping I would somehow dodge that bullet.

In terms of PayPal… it seems like your points on it are pretty on the money to me. Amazon’s new payment service might be worth taking a look at if you haven’t already… it’s brand new, which brings with it both positives and negatives, but I’d have to think that Amazon has some pretty comparable experience dealing with transactions like PayPal.