That's essentially what a CC company does though, every transaction they're briding the timing gap between the card holder paying the CC company and the CC company paying the business. That's the core value add and cost they're bearing that they charge for.
They have risks from both sides of the transaction; on the one hand scam merchants who might get chargebacks and on the other customers who never pay off their balances (thought I guess that risk is covered by their interest charges mostly).
https://usa.visa.com/content/dam/VCOM/global/support-legal/d...
> If the dispute is valid, the acquirer deducts the amount of the dispute from the merchant account and informs the merchant.
Also, keep in mind that companies like Stripe will not only recover the disputed amount from the merchant but will also recover a fee from the merchant!
Returning a defective product to one store, only buying things when you have coupons or promo codes, or issuing a chargeback at one business can get you instantly flagged as a higher risk at countless unrelated stores who are using the same services. Other factors that can impact your score include your income level, your home address, the devices/software you use, your interactions with websites (for example going directly to the product you want instead of searching and browsing around, or pasting your information vs typing it out is considered suspicious), how much money you spend, inconsistencies in the personal information you've given to different businesses, even your attitude when dealing with employees and how much of their time you take up can negatively impact how you're scored since that lowers your expected profitability (CLV/LCV/LTV) which lowers the tolerance threshold for risk.
At least Yelp is public and companies can see how they are rated. Businesses typically won't tell you that you've been branded a high risk for fraud or chargebacks. Instead they'll just apply different prices and polices to you on an individual basis. They might tell you that don't accept certain payment methods. They might tell you they don't accept returns, will only give store credit, or give very narrow return windows. They may reject your business entirely or limit you to only a subset of the products or services they offer.
Just to give them some space, I'm using a different service, which is no better. They are all horrible, overpriced, and the drivers DGAF, and so I am routinely triggered into this rudeness they complain of. Recently I had another episode where my drinks went missing. Consistently. And so a couple of times, I pursued a tip reduction through the app or through their Support or whatever. Their Human Support Agents swore up and down that I should be able to zero the tip in my app. I swore up and down that there was no option at all for this. I raged and stressed so hard about this. The app kept claiming it was Human Support's responsibility to reduce/zero tips. Human Support swore that they were unable and disempowered to do such a thing.
I finally resolved this with an LLM conversation. The LLM revealed that "some customers are flagged as high-risk and their ability to reduce/remove tips will be disabled by the platform." This made perfect sense why the CSRs all believed that I should have the option, but it was disabled "for security reasons". It was appalling to me that they considered me "high risk" of stiffing a driver. Because I have always been very very careful to take care of drivers' tips generously because I sort of understand what they go through, even when a small percentage are overt assholes and DGAF. They mostly still deserve their tips and wages.
But the platform removed my ability to penalize them and reclaim my discretionary funds from a gratuity paid in advance and that really, really infuriates me. There is, of course, no way to start at $0 tip and increase it, because the drivers will simply decline to even claim your order in the first place. Because gratuities in advance are an incentive and bait to claim orders. They are not tips, they are bribes.
The app even has a warning that Zelle is basically cash, and you really shouldn't expect any reversal.
So I dug into Zelle reversals one time when a landlord stole my security deposit and I was considering reversing last month's rent until small claims figures it out. Banker said Zelle charges aren't normally reversible, but reluctantly admitted they are required to reverse the charge if it was unauthorized. Had I lied and said someone hacked my account, it may have been reversed, but then I'd be committing fraud.
Cashier's checks too. Despite what everyone says, they are reversible under the right circumstances. TurboTax's refund processor did that to me because they thought my address was wrong or something.
Nowadays for the first purchase for a merchant it can require me to hold my card to my phone to prove that I have physical ownership of the card.
Fraud in modern financial systems is kind of.. funny? obvious? Local banks who know who Bob is can't make enough money due to scale, we'll scale that system to a national level with millions of participants. How will we do that? Bob is now customer 11,476,112. Oh no this anonymous number we created cheated us because we didn't know who he was, what do we do? Charge Bob and everyone else for the cost of this, our scaled up business model wouldn't work otherwise. We'll skim 3% off of every financial transaction infinitely, so that after our $100 virtual bill has changed hands 30 times it has disappeared into our coffers.
I recently ordered some snacks from another country and after 3 months the vendor stopped responding while never having sent anything. When I asked for a chargeback, my claim was denied because I didn’t have proof they didn’t send anything! I literally had an email from them that said they are backed up and unable to send stuff.
This was a moving company that insisted I should use their flat rate package and 3 movers rather than the 6 hourly I asked for. It took forever and they tried to charge me extra fees.
The lengths insurance companies will go just to avoid adding to a deductible are, given the circumstances, rather disgusting.
They don't seem to produce any savings. Are credit card companies much different? Why are their CEOs making millions of dollars? Is it all supposed to be because of innovation in preventing fraud?
As with health insurance companies I too have found in reality their way of dealing with these things leaves much to be desired. The way they treat it seems transparently like health insurance - add minimal value upfront, then wear you down so you never actually get the service or "value" they were supposed to provide in the first place.
That shitty service is the margin padding that multi million dollar salary. Where's the innovation?
I literally had a bike rental company in Amsterdam attempt to get me to conspire to report a bike stolen (which had briefly been stolen but was back in my possession), and then when I refused, charged me as if the bike had been stolen!
I reported all this to Amex, and I was never refunded, and to my knowledge, the attempt fraud was never investigated.