The timing gap is only there because it is a credit arrangement, it's not inherent in payment processing.

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Most fees go to the issuing bank. The issuing bank is usually on the hook for customer disputes. So I think you are mistaken.

I mainly meant the processor has to spend money handling the disputes. They may eat the cost too if it's small, but usually that's on the merchant. They're more likely to eat the cost of fraud.

There are fraudulent customers too, I would say even more often since they have no reputation to uphold. You can see this more in the open on Yelp.

If a merchant has a pattern of disputes with customers, they can get kicked off the card networks. That's a real world repercussion.

Zelle is like this too. Though everything seems to be reversible in some way, not cause of disputes but because of unauthorized charges.

this process of giving out your 'secrets' (ccn, exp, ccv, zip) to tens of people a day with no other real authentication is inexcusably insecure. and instead of trying to get on top of the problem for real (like an hsm), we have this very half-assed fraud detection and chargeback mechanism that costly, ineffective, and seems to just bury the real issues behind a facade of concern. its been decades that this has been going on, I remain confused as to what incentives the banks have to continue to prop up this farce.

Any links for this? Since the abusive practices towards their users should already eliminate most of frauds that isn't caused by the actual banks themselves.

> the cost of fraud

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.

Out of all the banks I’ve done chargebacks through Chase has been the least painful. I think only one time I had a back and forth with them. And that time I had one phone call, sent my evidence, and that was that. The company then tried to charge me again, which I also disputed, never heard from them again.

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.

I've had a foreign chargeback go into the void too. I don't get the feeling chargebacks are a thing in Italy, so chalked it up to that.

Not unlike the experience many Americans have of fighting their own insurance company that they already pay a monthly premium to.

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?

Yeah, I've been extremely disappointed with disputes on Amex Platinum.

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.