[MUD-Dev] Buying benefits

[Matt Mihaly]

On Sun, 10 Jun 2001, Peter Tyson wrote:
> According to Matt Mihaly:
 
>> Do you know how much you'll get fined if you were to operate
>> continuously at 5% fraud rate? Visa/Mastercard will kick you out
>> for that kind of fraud rate, and your merchant bank is almost
>> certain to start fining you. I would be quite curious, though, to
>> know how online gambling companies manage that. As you say, they
>> would seem quite easy to defraud.
 
> Also, they are perhaps allowed certain freedoms due to the volume
> of transactions they take. These guys can make -serious- money.

Possibly, yes, but Visa/Mastercard's primary concern is that
consumers trust them. Without that trust, they have no
business. Merchants who have high fraud rates are just bad for them.

> Also, the risk may be on the operators, not the transactional
> groups.

No, the merchant banks get fined too, if their total fraud rates go
over X percentage. I believe it is a minimum fine of $100,000 if a
merchant bank's fraud rate goes over 3% for a month. That's what my
merchant bank told me in any case.

 
--matt

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