Authorize.net and AVS

[crankydave]

The money does typically get put back in the customers account with 2-3 business days, but as I mentioned, banks are hitting customers with overdraft charges too now. At the very least, I get phone calls from angry or suspicious customers thinking we are one of those shady businesses. At the worst, well, it can get pretty ugly.

This is the hardest part about it all. The phone calls and emails from angry customers. All I can share is how we handle them. With the truth. That we are, first and foremost, trying to protect them from the potential misuse of their card. It's rather humbling to have to apologize profusely for their inconvenience when it's no fault of your own.

Gonna drop you a PM.

Dave

[msinfo]

msinfo... I'm not at all trying to suggest you don't know what you're talking about. But having myself spent almost 30 years in card present and card not present environments, and having worked with a multitude of banks and processors, I've a bit of experience as well.

Granted you were/are most definitely trying to assist the OP with options.

Also granted, as merchants "run off" someone gets stuck. But that sums up my point. It's the merchants who are held responsible from the very beginning on only in a situation where there's no merchant does someone else have to pony up. That's just flat ass wrong.

Banks have this information at their fingertips. Very easy for them to verify. They don't and won't. It all requires merchants to spend more man hours, more resources, more money, to do what they won't. Simple enough concept in my mind. Take some initiative, take some responsibility, for the transactions they approve. They have all the information. Merchants don't. Yet all they verify is CC#, expiry date, available credit, and (when applicable) CVV2. That's it.

As so far as your picture of the Chargeback process, that's simply not the case. Many banks have online forms that can be filled out by the cardholder that get auto processed. They verify almost nothing. Name me one bank that verifies whether or not a merchant even has a return policy or whether or not they have an "all sales final" policy before issuing a chargeback. They don't.

When a chargeback to merchant occurs, that turns out to be incorrect, name me one bank that reverses the fees associated with that chargeback. They don't.

Banks don't verify squat unless they're issuing a card. I'm not suggesting that merchants be held blameless or should have no responsibility but compared to what banks actually verify it's sinfull.

You can scan all the transactions you want, but once submitted for settlement you cannot void them anywhere. Please name a processor that allows you to void a transaction after being settled. You can't.

Dave

One bank that verifies whether or not a merchant has a return policy? How about 3:

1: Chase
2: ECHO
3. Nationwide Payments.

I'm sure there are more.

As for voiding a transaction that has been settled where did I say anything about a transaction being voided after being settled? You cannot void a transaction that has been settled but you can perform a refund.

Also, most merchant accounts allow online merchants to MANUAL Settle, this way you can be sure that the batch checks out before you settle it.

I'm sorry but you really don't sound as if you've spent much time in the recent payments circle. You say that I'm "flat ass wrong". Well here's a simple enough example:

- A merchant applies for an account, without the best intentions, they are somehow approved by the bank's underwriting
- The merchant gets access to stolen card information and manually enters that info themselves via either their Virtual Terminal or Web Interface. Let's say $500
- The real customer, back somewhere in the middle of the country sees that their card was used fraudulently
- The customer disputes that transaction with their credit card company
- The merchant provider/processor attempts to tell the merchant that they have to refund this customer because the customer charged this transaction back with their credit card company and the merchant has no proof of customer authorization
- The problem is that the merchant had bad intentions to begin with and they're long gone.
- Guess who has to refund the customer that money because the merchant is no where to be found?? You guessed it! The merchant processor and processing bank does!!

Now you asked for a scenario and I gave you one...

Again I'm speaking factually here. I'm not sure where you're getting your info but I hope I'm shedding some light for you.

[crankydave]

One bank that verifies whether or not a merchant has a return policy? How about 3:

1: Chase
2: ECHO
3. Nationwide Payments.

I can tell you for a fact that Chase does not when it comes to disputes. One of my sites uses them so I know first hand they do not. ECHO does not either when it comes to a disputed transaction. Neither does Nationwide after the fact.

As for voiding a transaction that has been settled where did I say anything about a transaction being voided after being settled? You cannot void a transaction that has been settled but you can perform a refund.

No kidding. At which point the merchant has paid fees for your so called "viable" option. Not to mention fees for the refund. This was my point to beigin with. Merchant pays fees for your "viable" option and the bank skates. THAT'S what makes it a non-viable option IMO.

Also, most merchant accounts allow online merchants to MANUAL Settle, this way you can be sure that the batch checks out before you settle it.

Which completely and utterly defeats real time processing. THAT is the purpose intended when it comes to CC's. You make nothing but excuses for the way banks handle transactions whether or not they are card present. Not to mention that this in no way addresses the bank issuing ann approval to begin with.

Pray tell me, what does a bank verify PRIOR to issuing an approval that I've colored or mistated in any way?

I'm sorry but you really don't sound as if you've spent much time in the recent payments circle. You say that I'm "flat ass wrong". Well here's a simple enough example:

- A merchant applies for an account, without the best intentions, they are somehow approved by the bank's underwriting
- The merchant gets access to stolen card information and manually enters that info themselves via either their Virtual Terminal or Web Interface. Let's say $500
- The real customer, back somewhere in the middle of the country sees that their card was used fraudulently
- The customer disputes that transaction with their credit card company
- The merchant provider/processor attempts to tell the merchant that they have to refund this customer because the customer charged this transaction back with their credit card company and the merchant has no proof of customer authorization
- The problem is that the merchant had bad intentions to begin with and they're long gone.
- Guess who has to refund the customer that money because the merchant is no where to be found?? You guessed it! The merchant processor and processing bank does!!

What a load of BS spin control.

When was the last time you spent some time in the "real world" when it comes to what merchants and consumers face? Clearly by your posts it's not been recently.

When was the last time you had to field a phone call from an irrate consumer because one of your sites declined a transaction because the billing information provided failed an AVS check even though their bank approved it? Information the bank has but will not verify. Clearly you haven't done this in current "payment circle".

When was the last time as a consumer you had a transaction declined by a website only to find out that your bank has held those funds against you and you don't know why? Only to have your bank tell you have to contact the merchant? Clearly you've not encountered this in the current "payment circle".

Your example is crap. It's not what real world merchants deal with every single day because banks refuse to. It's not what costs real world merchants money every day because banks refuse to. It's not what costs consumers more money every day because banks refuse to. Join the real world world instead of making excuses.

Now you asked for a scenario and I gave you one...

Again I'm speaking factually here. I'm not sure where you're getting your info but I hope I'm shedding some light for you.

You provided an excuse.

I hope I'm shedding a bit of light on all the merchants and consumers that have to deal with this in the real world every day, that get needlessly cost money and resources every day, and not defending and making excuses for the actual problem.

Dave

[msinfo]

Ok I guess a part of your "brand" is to be this online tough guy that takes us "bad guys" to court via the web and sheds light on the truth? Correct?

Well you tell me that I'm not in touch with what every day merchants are doing, well how many thousands of different merchants/businesses have you helped setup and manage accounts yourself?? In reading your posts I'm seeing that this is just a way for you to vent frustrations with the provider/bankcard industry. But you have you real solutions to help merchants on here. When I post a solution you come back with some childish rant, but again, I guess that's a part of your "brand" right as the "Cranky Guy" that takes no crap.

Well I'm actually beginning to feel sorry for anyone that listens to your payment industry advice on this forum. Because what advice do you have? None at all apparrantly!!

You even call batch settlement NON REAL TIME??? Wow, you're so mis informed. Do you realize that all credit card transactions are processed into a batch that must be settled at the end of the day?? The only difference between Manual batch settlement and Automatic batch settlement is that with Autosettle the gateway settles the batch for the merchant at the end of the day!! But it's the same system, it's just that with a Manual batch settlement the merchant is doing it himself instead of the gateway. You do realize that ALL credit card transactions must be settled in a batch correct (Whether "real-time" or non-real-time). I don't care how many rants you post on here you're clearly mis informed, and anyone that listens to what you're saying is going to find themselves in even worse of a situation I swear.

I even gave you the example that you asked for you and you called in BS Spin?? This is getting funnier by the minute.

You clearly have no idea what you're talking about here. Stop wasting so much time posting on topics that you have no knowledge of. Your answer to everything is that banks are bad, my answers are much more practical and actually explain what's going on. Why don't you go back and read everything you've posted.

And I hope I'm shedding light on just what a childish and mis-informed moderator this forum has. I won't waste my time on this topic any further as it's unfortunate that someone can come with good intentions and end up dealing with a kid with nothing better to do and that's too ignorant to learn how this stuff actually works.

I can't believe that with all your senseless comments about the industry that I've corrected you on that you still have the nerve to tell me that I don't deal with real merchant's every day??? I would bet that I deal and have dealt with far more merchants looking to accept and integrate electronic payments than you.

I've done provider training at merchant banks and have actual formal knowledge in this industry, and have provided nothing but facts on my posts, while you rant in what appears to be an effort to further promote your "Cranky Dave" brand...

Cranky Dave: the guy that is an expert in everything from Bailouts, to Tomatos, to Pickle Juice, to Westmont Ho-Hum, to Coke, to Pickles, and now he's an expert in the Merchant Account industry too! (I'm not making this up). He's even more of an expert than someone who has advised thousands of merchants, have held real jobs in the field and have trained in a merchant acquiring bank.

Who looks more like they're BSing to you?

AND TO CLARIFY THE AVS NOT GOING THROUGH BUT CARD BEING CHARGED ISSUE:
If the your gateway is setup to not approve transactions where the AVS is not approved the card amount will be reserved on the bank end until the batch is settled and up around 2 days after but the money will not change hands because the card that did not pass the AVS check may pass the Authorized's funds check but it is not put into the merchant's batch for actual transfer - so though it appears that the customer is actually being charged they're not because the gateway saw that the AVS was not verified and it did not put that credit card into the batch which prevents that card from actually having funds taken from it's customer and given to the merchant. The purpose of batch settlement (Whether it's manual or automatic) is to actually move funds from the customer's account to the merchant's bank account.

So if the AVS was not passed and the gateway was set to not settle cards that did not pass the AVS check the customer will see their held funds released in 2-3 days and the merchant will not actually get the money. This is how settlement works, they're not actually being "charged" unless the card was settled at the end of day batch by the merchant.

[deepsand]

... What we end up with are ... completed sales with duplicate transactions.

Why are you having customers initiate a new transaction, rather than simply executing a Capture, using the Authorization originally received, once the address is resolved?

If it's the case that the volume of such is too high, then you need to face the fact that you've a big problem with customers entering bad address information, and look for ways to make your site more prominently display the requirement that the proper Billing/Statement Address be provided.

If all efforts in this regard fail, or have failed, then recognize that any undesirable consequences suffered by the customers are of their own making, rather than look to your card processor and/or the banks for scapegoats.

[deepsand]

It is not just the banks, but Authorize.net sucks too. I heard so many complaints about them and had so many complaints about them myself (customers) that I actually switched to PayPal Pro..

PayPal's "address verification" is a joke. They've even "verified" non-existent addresses!

[deepsand]

You can turn off the switch in Authorize.net to decline transactions where the AVS do not match. That way the system will notify you that the AVS did not match but also aprove the transaction.

And you get to pay your discount/transactions fees on all bank approved transactions.

Not if it's an Authorize only transaction; there's no juice until the Capture is effected.

The banks have the needed info. If their interest is in protecting their cardholders they should be verifying it PRIOR to issuing an approval/authorization.

Still leads to a 2-step solution.

If the Authorization is not completed unless a successful AVS response is first obtained, and the latter fails, then a 2nd attempt is required after such problem is resolved.

[deepsand]

Do your self a big favor and do not use Authorize dot net to transact your cards. Eventually you will wind up with problems and it will cost you.

In there very own words to me during a phone conversation after they conducted several fraudulent credit card transactions that cost me dearly in fees etc.

I quote "You don't understand, we don't authorize credit card transaction, we only transport numbers from one place to another. You have to check the transaction, it is you responsibility to verify whether or not the card is valid."

In this regard, it is the case that A.net is both correct, and no different from any other card processor in this regard.

Millions of $$$ in transactions, and no cause for complaint, other than a minor technical problem re. the automatic generation of confirming e-mails not being produced under a certain specific condition.

A.net is, in fact, one of the best processors to be had.

[deepsand]

IWhich completely and utterly defeats real time processing. THAT is the purpose intended when it comes to CC's.

Sorry, Dave, but there's no such thing as "real time processing" when it comes to the remote use of credit/debit cards.

Only the Authorization occurs immediately; all Captures, no matter how collected, are Batch Processed, and then distributed to the corresponding banks for their
(batch) processing.

This is why transaction generally take several days to Post to the card holder's accounts; and, where shown on the statement, the Transaction & Posts Dates are different.

[crankydave]

You even call batch settlement NON REAL TIME??? Wow, you're so mis informed. Do you realize that all credit card transactions are processed into a batch that must be settled at the end of the day?? The only difference between Manual batch settlement and Automatic batch settlement is that with Autosettle the gateway settles the batch for the merchant at the end of the day!! But it's the same system, it's just that with a Manual batch settlement the merchant is doing it himself instead of the gateway. You do realize that ALL credit card transactions must be settled in a batch correct (Whether "real-time" or non-real-time). I don't care how many rants you post on here you're clearly mis informed, and anyone that listens to what you're saying is going to find themselves in even worse of a situation I swear.

Is msinfo short for misinformation?

Transactions do not have to be settled before the end of the day. They can be settled days later if the merchant likes.

I even gave you the example that you asked for you and you called in BS Spin?? This is getting funnier by the minute.

That's exactly what it was. Your so called example in no way whatsoever addressed how a bank handles a transaction(s). That is what is being discussed in this thread. Not the application process for a merchant. The application process has nothing to with how transactions are processed.

And I hope I'm shedding light on just what a childish and mis-informed moderator this forum has. I won't waste my time on this topic any further as it's unfortunate that someone can come with good intentions and end up dealing with a kid with nothing better to do and that's too ignorant to learn how this stuff actually works.

I can't believe that with all your senseless comments about the industry that I've corrected you on that you still have the nerve to tell me that I don't deal with real merchant's every day??? I would bet that I deal and have dealt with far more merchants looking to accept and integrate electronic payments than you.

I've done provider training at merchant banks and have actual formal knowledge in this industry, and have provided nothing but facts on my posts, while you rant in what appears to be an effort to further promote your "Cranky Dave" brand...

You've corrected me? There's not one iota of factual information that you have or are able to "correct". You on the other hand have continued to post factually incorrect information. The latest being that transactions must be settled by the end of the day.

And a kid? Don't make me laugh.

AND TO CLARIFY THE AVS NOT GOING THROUGH BUT CARD BEING CHARGED ISSUE:
If the your gateway is setup to not approve transactions where the AVS is not approved the card amount will be reserved on the bank end until the batch is settled and up around 2 days after but the money will not change hands because the card that did not pass the AVS check may pass the Authorized's funds check but it is not put into the merchant's batch for actual transfer - so though it appears that the customer is actually being charged they're not because the gateway saw that the AVS was not verified and it did not put that credit card into the batch which prevents that card from actually having funds taken from it's customer and given to the merchant. The purpose of batch settlement (Whether it's manual or automatic) is to actually move funds from the customer's account to the merchant's bank account.

wow... First off, the consumer doesn't know that the funds have not changed hands. THAT'S part of the problem the OP is referring to. The funds are held and the consumer is given every indication by the bank that the merchant has been paid. THAT'S the other part of the problem.

And what happens when the consumer calls their bank? They say call the merchant.

This is the real world msinfo. This is what happens everyday. Not the rosy picture and so called "solutions" you portray.

So if the AVS was not passed and the gateway was set to not settle cards that did not pass the AVS check the customer will see their held funds released in 2-3 days and the merchant will not actually get the money. This is how settlement works, they're not actually being "charged" unless the card was settled at the end of day batch by the merchant.

Even more misinformation. If funds were only held for 2-3 days it wouldn't be as big an issue. An issue but not as big. They hold funds for up to 30 days. This is fact.

If you wish to discuss fact, my suggestion would be to post fact.

Dave