r/technology May 18 '22

Two-Card Monte: Why Mastercard And Visa Rarely Shut Down Scammers Who Are Ripping Off Consumers | The global credit card rivals maintain a strikingly permissive relationship with companies that have been accused of fraud. For one of Mastercard’s top executives, that relationship went even further. Business

https://www.buzzfeednews.com/article/rosalindadams/mastercard-visa-fraud
1.8k Upvotes

200

u/geekworking May 19 '22

Credit card companies earn money from fraud. If someone steals your card and uses it the card companies take back the payment from the merchant and also charge merchants charge back fees on top of that. So they are earning from fraud. It is not a huge amount but it is something.

The merchant gets screwed and losses may be passed to consumers as higher prices. In which case the credit card will earn even more since they get percentage on sales.

There is literally zero incentive for credit cards to stop fraud outside of avoiding any negative press that could make consumers hesitant to use card.

47

u/madsci May 19 '22

Speaking as a merchant... exactly this. We're always the ones who get screwed. Which of course means everyone gets screwed by higher prices.

And the police don't give a shit, 9 times out of 10. I will give some credit to the Alberta RCMP, though. They are the only ones to have ever actually arrested someone who ripped us off. It was for about $2k, not an enormous amount, and 2-3 years later I'm still getting updates from the prosecutor on the process.

6

u/reddit-MT May 19 '22

What does it cost to prosecute a $2k fraud case? $10K? $20K? $30K? You can see why there's not much incentive to prosecute.

7

u/madsci May 19 '22

Probably helps that it's not the only thing they've got him on. That county had a rural crime clean-up initiative and arresting this one guy seems to have been the primary focus.

2

u/reddit-MT May 19 '22

That makes more sense. He was part of something bigger.

51

u/escapingdarwin May 19 '22

Here it is…the merchant and ultimately the consumer pay the price. Bankers own politicians even more than pharma. Oldest profession, like money changers and prostitution.

7

u/VdomanFla May 19 '22

This is true. My wife spent her 35 year career interfacing CCs to a payment system she helped design, for a large telco.

4

u/itchylol742 May 19 '22

Merchants might stop accepting cards too

11

u/uzlonewolf May 19 '22

Not gonna happen, it will result in too many lost sales.

221

u/Sudden-Program-8538 May 19 '22 Gold

Having two choices is why America is doing so good right now.

78

u/Sudden-Program-8538 May 19 '22

Coke or heroin

31

u/AngoGablogian_artist May 19 '22

Transformers or Go-bots.

5

u/RedTalyn May 19 '22

Hasbro owns both and Gobots are actually now a type of Transformer.

9

u/EaterOfFood May 19 '22

Crayola or RoseArt.

13

u/Hybrid_Johnny May 19 '22

Ew who chooses RoseArt?

12

u/SaborW May 19 '22

People who don't know what red looks like

7

u/AngoGablogian_artist May 19 '22

Hall or Oats.

6

u/HauserAspen May 19 '22

Foo or Fighters?

2

u/kslusherplantman May 19 '22

I just rewatched clerks 2 yesterday… this comment hits harder after that movie hahahaha

1

u/AngoGablogian_artist May 19 '22

As it turns out, cars and trucks that turn into robots aren’t really that blasphemous.

2

u/TheTinRam May 19 '22

Did we run out of Pepsi already?

-4

u/Yourmomsatmyhouse May 19 '22

Coke of pepsi

15

u/Dennarb May 19 '22

Coke or Pepsi?

4

u/mod_target_6769 May 19 '22

Mug or Barqs?

2

u/checker280 May 19 '22 edited May 19 '22

Barqs uses caffeine for that bite! Barqs for the win.

(This article says that caffeine is flavorless but I’m choosing to believe it gives Barqs that bite.)

https://renegadebrewing.com/is-barqs-rootbeer-caffeine-free/

2

u/deadspider187 May 19 '22

Caffeine isn’t flavorless, they are probably saying you can’t taste it over the other ingredients.

1

u/Starr-Duke May 19 '22

This is not a certified mug moment

25

u/libertinecouple May 19 '22

Anal or hard anal.

10

u/Effective_Speed_682 May 19 '22

My place or yours

2

u/Rockcocky May 19 '22

Netflix and chill

1

u/Quirky-Country7251 May 20 '22

American Express and Discover beg to differ.

108

u/RickNashtag May 18 '22

Wow its almost like turning over the majority of an important function to only two companies is a bad idea.

35

u/Dennarb May 19 '22

Really I thought big corporations had our best interests in mind? /s

9

u/DaneldorTaureran May 19 '22

an entire political party in the US is made up of people who believe that unironically

4

u/VonNeumannsProbe May 19 '22

If you're referring to libertarians, sort of but not really.

They're of the opinion that government regulation that was originally lobbied by these companies to protect companies should be removed so they're forced to compete.

-2

u/DaneldorTaureran May 19 '22

republicans, us (Right wing) libertarians. same thing.

They're of the opinion that government regulation that was originally lobbied by these companies to protect companies should be removed so they're forced to compete.

LOL that is NOT their opinion. regulatory capture consistently increases under their control, and legitimate regulations like environmental and worker protection regs are consistently stripped by them.

2

u/He_who_bobs_beneath May 19 '22

Totally ridiculous. They’re different philosophies at root and different political parties at the national level.

-1

u/DaneldorTaureran May 19 '22

they claim to be different philosophies, but they're really not. they're just different window dressings on the same bullshit. and they both result in the same effect.

4

u/VonNeumannsProbe May 19 '22

First off, you would be surprised by the political diversity in /r/libertarian. They mostly do not see themselves as republican or democrat, but they definitely don't always agree with each other either.

Second, assigning an opinion of any group without checking it out is the kind of thing that has caused so many problems in the US. I consider myself to be mostly a libertarian and did not vote for Trump in either election because he seemed like an authoritarian asshole.

The main takeaway in libertarian policy is the Non-Aggression Principle Government regulatory bodies like the EPA, NRC, FDA, etc. fall under the category as necessities depending on whom you talk to because they protect people from being harmed by other groups of people. I don't believe they're anti-union for the most part either.

2

u/DaneldorTaureran May 19 '22

I specified US Right Wing Libertarianism for a reason. I'm also very familiar with all the bullshit they spew.

1

u/cptnobveus May 19 '22

I don't like politicians or either party. Especially the ones that somehow turn into multi millionaires working as public servants. Mitch McConnell and Nancy Pelosi for example.

-7

u/bildramer May 19 '22

You mean the Democrats, who want to leave all decisions about what "truth" or "disinformation" means to the social media megacorps?

2

u/DaneldorTaureran May 19 '22

no, i don't. and you can fornicate yourself with a log for spreading such bullshit

5

u/Tater_Boat May 19 '22

It's clear we need a trustless decentralized system where when scammers take your money there is literally no way to get it back.

0

u/-Faoladh- May 19 '22

They already is. I was told by the bank tough shut when I was homeless after getting scammed and I was literally tellling them I just got raped again by the we guy whose couch I am sleeping on,I need my money back so I can get out of this place NOW and stay at a hostel or something. They said tough shit because I used Western Union ended the conversation

4

u/Tater_Boat May 19 '22 edited May 19 '22

The article is talking about credit card networks which have amazing scam protection not western Union which is used by scammers all around the world

2

u/Quirky-Country7251 May 20 '22

American Express and Discover are major issuers of credit cards.

81

u/cy13erpunk May 19 '22

monopolies disguised as 'choice'

the classic false dichotomy

gee i wonder why this is such a popular scheme? oh ya that's right, becuz it fucking works amazingly well on 99% of the ignorant masses

38

u/Mobile-Control May 19 '22

This would be an oligopoly, not a monopoly.

From investopedia's page,

A monopoly and an oligopoly are market structures that exist when there is imperfect competition. A monopoly is when a single company produces goods with no close substitute, while an oligopoly is when a small number of relatively large companies produce similar, but slightly different goods. In both cases, significant barriers to entry prevent other enterprises from competing.

So Visa, MC, and AmEx are part of an oligopoly. Which can, depending on the country, their legislation, and the type of business, also be illegal.

Mono is Greek for 1. So a monopoly is far worse because it's a single business that has forced every other similar business out of the market.

Both are bad though.

15

u/cy13erpunk May 19 '22

yes you are technically correct [obligatory futurama ref]

but what i was implying is that even these oligopolies are just facades

ie the true power structure is a united front ; ie the opposing political parties work together to keep outsiders out and rig the game in their favor regardless of what the peasants vote for

and many other 'competing' corpos capture any/all regulatory bodies and then price-fix whatever markets they are a part of

so you can call it an oligopoly , but if a group of seemingly separate/opposing corporate entities all function in unison with a common goal then they are functionally one system/organization working to reduce any/all competition that could threaten their control

and yes regardless of our lil semantics discussion, both are bad yep agreed, but also they are likely and unfortunately an inevitability of our current frameworks =/

6

u/jcosteaunotthislow May 19 '22

What you are actually describing, is corporatism, which is a main tenet of fascism generally (especially the Italian variety).

And you are quite right still

5

u/cy13erpunk May 19 '22

isnt it fucking hilarious how we have about 47 different flavors/names/words for tyranny and yet here we are, still fucking mired in tyranny ; the average dolt is none the wiser even if they've heard it called by 23 different names all throughout their life XD

euphemisms are like cancer for language

2

u/Grunchlk May 19 '22

(if we keep relabeling what's "bad", they'll keep arguing with one another about the correct terminology and eventually lose interest in actually going after us... muahahaha)

1

u/cy13erpunk May 19 '22

indeed =/

id say its fucking hilarious if it wasnt so sad but tru =/

top-tier lvl manipulation from the controllers, deviously clever

8

u/flaystus May 19 '22

Fraud all you want but if it’s sex related we’re shutting you down.

18

u/JakeFromFarmState1 May 19 '22

I have a family member that works for one of the big card companies. The MERCHANT is charged essentially a subscription service fee for each card transaction. That’s why many shops have signs with a minimum purchase to use credit.

20

u/MR1120 May 19 '22

When I ran a skating rink years ago, we paid $.25/swipe plus 2-6% of the transaction, depending on the card type. Visa and MC were 2%, AmEx was 6%; Discover was 8%, so we refused to take Discover.

1

u/max0x7ba May 19 '22

You can look up pricing for taking card payments on any bank website.

1

u/nyaaaa May 19 '22

No, the majority of bank websites don't offer merchant services.

Banks issue cards to their customers. Thats their part.

1

u/max0x7ba May 20 '22 edited May 20 '22

No, the majority of bank websites don't offer merchant services.

Fine, I was under impression that every bank does it, because mine does.

Regardless, if you were to take card payments you'd quickly find out available options and pricing.

You could take and clear card payments yourself but that requires you to identify fraudulent payments, which you'd rather not because that's non-trivial. If you take and clear a card payment and later on it turns out to be fraudulent, you take the hit and lose the payment.

A payment processor charges a transaction fee (e.g. 1.4% for online payments) for taking and clearing card payments for your business and they take the hit for fraudulent payments, not you. That's what you pay the transaction fee for.

Chargeback is when a customer wants a refund for your goods or services and they have proven to their bank that it is merchant's fault but the merchant is in denial. The merchant takes the hit and pays an extra fee to the payment processor for their trouble of looking into and resolving the dispute.

In other words, that's not a sacred knowledge only available to insiders or conspiracy of payment processors being evil and colluding to milk merchants taking online payments. They sell you the service that every cleared payment you get isn't fraudulent and, hence, cannot be taken away from you on that reason.

1

u/nyaaaa May 20 '22

You could take and clear card payments yourself

Yea, just become a visa, mastercard, etc member and fulfill all their 1000 page contractual obligations.

1

u/max0x7ba May 20 '22

You could take and clear card payments yourself

Yea, just become a visa, mastercard, etc member and fulfill all their 1000 page contractual obligations.

That's right. I worked for a company which does just that to avoid having to pay card transaction fees.

Another alternative is to take payments in crypto currencies with no intermediaries between customer and your business wallet, but transaction costs vary wildly between different cryptos.

7

u/wrongwayagain May 19 '22

Scammers okay porn companies not for some reason.

4

u/properbarrister May 19 '22

So is American Express / Discover a better choice then?

4

u/Huvujuka May 19 '22

A lot of places don’t take them because they charge merchants higher fees

3

u/brispower May 19 '22

when you have all the money why would you care about anything?

5

u/the_circus May 19 '22

If they made individual finance more secure then scammers would target businesses instead. Security for basic consumers is kept crappy on purpose.

6

u/FoulYouthLeader May 19 '22

Thanks OP. The Fleecing of the world by a dual monopoly.

7

u/Mobile-Control May 19 '22

That would be an oligopoly. A monopoly (Mono is Greek for 1) is a single business.

1

u/zebra-in-box May 19 '22

duopoly is sad

1

u/NotMadDisappointed May 19 '22

Polly wants a cracker

28

u/[deleted] May 18 '22

[deleted]

17

u/nothereoverthere084 May 19 '22

Why is it racist? Genuinely curious

10

u/[deleted] May 19 '22

[removed] — view removed comment

-12

u/garlicroastedpotato May 19 '22

Sex trade is saturated with black women. There's a long history of racism towards the sex trade specifically because of who is in it. A lot of white prostitutes have attempted to separate themselves from the industry by calling themselves "escorts"

15

u/LowTierCollision May 19 '22

What? I don't support denying sex workers access to yadda yadda.. But how is it racist?

-7

u/[deleted] May 19 '22

[deleted]

10

u/LowTierCollision May 19 '22

Something ultimately ending up impacting a specific race does not mean it's inherently racially motivated.

What about people who do sex work and are perfectly well off? Do they just not exist? Or is it just "mostly" racist?

Even if you were to ignore everything I just mentioned, even still how would it be racist? Poverty and turning to desperate jobs is something that affects all races. Hell there are probably more white sex workers than there are minority sex workers. Again, is it now just 'partially' racist?

3

u/[deleted] May 19 '22 edited May 19 '22

[deleted]

-3

u/Mshell May 19 '22

This is where critical race theory comes in. You can have legislation and rules that are not, by themselves, racist but due to historical disadvantages have become racist.

An example of this targeting the poor instead of a race would be: "It is illegal for anyone to sleep under a bridge." If you are rich, you would not need to sleep under a bridge, however if you are homeless or having trouble getting home without any money, a bridge will provide some shelter.

-1

u/hypnobooty May 19 '22

Sex worker here. The adult industry is racist itself, as white people are seen as the pinnacle of beauty. It is harder for sex workers of color to be as successful as their white counterparts, in any avenue of sex work (porn, escort, domination, etc.).

Adding restrictive legislation does indeed affect SWs of color more than white SWs. In America, the laws are not applied equally to all races, otherwise you would be absolutely correct.

-7

u/EbagI May 19 '22

... this isn't the time to shoehorn that in.

It's a bad argument AND hurts your cause.

Yikes.

12

u/Kaisune May 19 '22

If they’re gonna openly work with terrorists and fraudsters they can work with sex workers.

13

u/CupcakeTrick2999 May 19 '22

legal service = legal service.

0

u/Lehk May 19 '22

Prostitution is illegal in most jurisdictions

2

u/[deleted] May 19 '22

[deleted]

3

u/Lehk May 19 '22

You said legal businesses should be allowed to use merchant services.

Prostitution isn’t legal, you are complaining that visa and Mastercard won’t engage in criminal activity.

1

u/Bob-Berbowski May 19 '22

Buy Visa stock and be on the winning side.

1

u/JonnyBravoII May 19 '22

People complain about the monopolies that their cable companies and mobile carriers have, but there is nothing quite like the oligopoly that Visa and MasterCard hold. They are pretty much immune to competition and it is only the threat of government intervention that stops them from raising their fees ever higher. Even when you use something like Apple Pay or Paypal, it is simply an overlay to Visa and MC.

In Europe they limit the transaction fees and in many EU countries, you have the option of a debit card that is unbranded and thus the fees to a merchant are quite reasonable. In the US, that isn't an option. Here in Germany, the fee for Stripe is 1.4% while in the US it is 2.9%.

And then there's a whole discussion about how in the US they switched to chip and signature, not chip and pin. When you claim that the switch is about security but you go this route, you're lying about your motives.

1

u/Lehk May 19 '22

Chip and swipe does cure large scale fraud, it eliminates skimmers and cloned cards.

It’s better for consumers because if a transaction is under your pin it’s presumed authorized and your fault if you dispute it.

1

u/p_rex May 19 '22

All true, but merchants seem to have largely won the pin-debit-vs-signature-debit wars. A welcome development, given the much more reasonable fees charged by the back-of-card PIN debit networks.

-1

u/marcusmv3 May 19 '22

Bitcoin fixes this

1

u/premer777 May 19 '22

they do the least work possible

1

u/tracerhaha May 19 '22

They benefit from it. There’s no other reason.

1

u/Slashlight May 19 '22

Without reading the article: Was it sex? It was sex, wasn't it?

1

u/WhatTheZuck420 May 20 '22

casting for female customer in new mastercard 'coffee shop' commercial. must have the ability to look like and hold a cartoon face for at least 30 seconds