Who take the responsibility to check if a payment is fraudulent? A seller or a Payment Gateway (Paypal/Stripe) - How to deal with Stripe/Pay
I have website selling service and customer pay through Paypal/Stripe. When customer make an order, I sent him an invoice. If I receive notification from Stripe/Paypal saying that I get a payment, then I deliver the work.
Problem happens when a buyer use a stolen credit card to Paypal/Stripe and use it to buy service.
My questions are: - Who take the responsibility to check if a payment is fraudulent? A seller or a Payment Gateway (Paypal/Stripe) - How to deal with Stripe/Paypal fraudulent?
My point of view: I think Stripe/Paypal is a payment gateway service, it is their responsibility to check if a stolen credit card is used to make payment. A seller has not any method to check that. It is not seller's responsibility to check.
However, here is what happen if I use Stripe/Paypal. Stripe/Paypal tell seller: 1. Hey, you receive a payment, deliver the service. and we will take about 4% commission fee. 2. Hey seller, we are sorry, but the payment (WHICH WE ALLOWED) is fraudulent, buyer used stolen credit card, the owner of credit card (the bank) is making dispute, we will take the money from you and return it to credit card's owner, you still have to pay 4% commission fee, and chargeback fee...
What the F* is this? I has already delivered the service, it is impossible to take the service back, it is digital service, it is not a physical product. Moreover, you (Paypal/Strip) tell me that I get a payment, that is why I deliver the work. If you did not tell me, I would not deliver the work. You are liar, don't you? What is your responsibility in this case? (angry!)
So..., Stripe/Paypal take the commission fee, and take no risk. Whenever something happen, they send the risk/responsibility to buyer or seller. What a bad middle man! Now I know why Stripe/Paypal worth billions dollar.
(Sorry for my bad English)
The reason the merchant is responsible for the fee is because they are the closest to the customer. Stripe can’t collect more into it needed for security. You decide if you get there billing address, or other info.
This is not new to Stripe, it is how every payment processor works. Other wise you could have people open processing accounts and slowly run charges with a stolen card and steal from stripe
Make sure, you capture Zip code, billing address along with credit card details and enable 3D secure in Stripe.
I feel your frustration, I have been there myself. AFAIK, there is nothing you can do about that and it's the risk of doing business I guess. What you can do is to dispute it, deliver proof that you shipped/delivered the product (and hope that the claimant bank covers it through their own insurance), although this has never happened to me once.
Good luck with it though!