US Government freeze on VISA cards used in Canada?

[ADAM Web Design]

Hi there,

I've got a client who sells primarily to a US market. Apparently, the US customers are having trouble with their VISA.

One of their customers has been repeatedly trying to pay with her VISA, and couldn't do so. The card itself was fine, but it wouldn't go through. Upon speaking with her issuing bank, the customer was informed that the American government has a freeze on VISAs being used in Canada or for Canadian e-commerce purposes.

This is pretty significant since about half of the transactions that go through are VISA transactions.

Has anyone else heard of anything like this? This is a first for me.

[Corey Bryant]

I have not heard of this - I actually bought something the other day from a Canadian business with no problems. Maybe it is just that particular issuing bank?

[ADAM Web Design]

That's what I tend to believe, Corey Bryant, because I haven't heard of anything either.

I also checked with another client after I made this post, and the client does a significant number of US-based VISA/MC transactions. They hadn't had a single issue.

[Corey Bryant]

I really wished I would get emails but I guess they disabled that for some reason? I do check to get emails when a reply is posted but that does not seem to work.

If you have a good relationship with that customer that called the issuing bank - ask her to do it again. Pretend it is like Tech support - call three times and get three different answers :)

[ADAM Web Design]

heh yeah, gotta love Tech Support. :)

Actually, the client and I put our heads together and we think we've resolved the specific issue.

Testing is being done, and I will report back, since this does have some fairly big implications.

[frogmanandy]

I think you can blame this on online poker, unfortunately.

[ADAM Web Design]

Online Poker? Please elaborate. Thanks.

[frogmanandy]

Well I play a bit of poker and over the last year a huge crackdown on online poker sites abilities to process credit cards has occured.

Some of the last places still taking US credit cards were the Canadian sites. Now, it appears none of them are.

Some companies had built work arounds so that you could deposit with a credit card into a paypal type account and use this to deposit to the poker site, but most of those no longer work either.

I'm really not sure if people were laundering money or if people were just losing and refusing to pay their bills or if the cc companies were having troubles dealing with the poker sites. At any rate that may be why the issuing company is barring online transactions.

[ADAM Web Design]

Well, that certainly would explain the issues and the reason for the workarounds in question.

But this leads to another question, and one in all my time in building e-commerce sites I've never found the answer to.

From my understanding of the situation, the request for transaction processing goes to Base24, then to the customer's bank itself.

If the customer's bank sees the country that the funds are to be sent to, does it not ultimately see the merchant as well, and thus can it not calculate the risk factor of said transaction based on the merchant's track record?