[43504] in Cypherpunks
Re: credit card conventional wisdom (fwd)
daemon@ATHENA.MIT.EDU (Sten Drescher)
Thu Nov 16 18:33:37 1995
Date: Thu, 16 Nov 1995 16:04:24 -0600 (CST)
From: Sten Drescher <dreschs@mpd.tandem.com>
To: stend@cris.com
Cc: ses@tipper.oit.unc.edu, cypherpunks@toad.com, vznuri@netcom.com
In-Reply-To: "Vladimir Z. Nuri"'s message of Thu, 16 Nov 95 11:23:42 -0800
Cc: "Vladimir Z. Nuri" <vznuri@netcom.com>
"Vladimir Z. Nuri" <vznuri@netcom.com> said:
>> Card Imprints taken with no online authorisation are typically
>> charged a transaction fee of 3-6%: with authorisation, 1.5-3%. ATM
>> card transactions are charged at around $0.10 per transaction.
VZN> are you saying that a typical mail order credit card transaction
VZN> has a 3-6% charge, because the card is not physically present?
No, s/he was talking about merchants who verify that you have
the credit available (online authorization) vs those who trust you to
have it (no online authorization). As I understand it, the fee is
'insurance' that the merchant will be paid - as long as there is no
fraud on the part of the merchant, it will receive payment, even if the
charge was invalid, because the card was canceled/stolen/over limit/etc.
The lower charge for online authorization is because when the charge
comes back approved, the CC company is able to verify that the credit is
there. This isn't foolproof (2 separate charges, each under the
available credit, can be approved even if the total exceeds the
available credit), but it's more than the offline merchants can do.
--
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