Apology if this is not quite the right forum. But since I see several posts about credit card...

I wonder if credit refund can be a cost-effective solution for people to pay overseas workers (though I do not know how cashable this refund is). A few days ago I am cashing some $200 cheque from The Royal Bank of Canada (I live in Indonesia). The total fee is about $60, which I find pretty expensive.

How much does it cost for merchant account owner to issue a refund?

Thanks,
Steve

I'd imagine that issuing "refunds" when you never received money in the first place is against most credit card policies. I know that Paypal has had problems in the past with credit card companies (Mastercard Canada I know, I think there was another recently) refusing to allow CC withdrawls.

I may be wrong on this but I would think you could only offer a refund on something someone has already paid you. Anything more is probably not considered a refund at all.

You might want to look at an option such as Paypal. I think it'll do pretty much what you're asking it to do (pay money directly to someone's credit card)

Greg Moore

what about a fictitious charge first, and later a larger sum of refund? Would that work? Would the credit card company complain if there are too many refunds?

Sorry. Just wondering about the possibility. And since credit card companies and banks screw merchants a lot in favor of customer, I'd guess it's okay to sometimes play trick on them :-p

PayPal is not an option. Not only they are not accepting clients from Indonesia, they are paranoid about us. I can understand that. :-(

Just to take it off my chest, carding flourishes in Indonesia (and mind you, also in non-Asian countries like Romania, Russia) because the whole credit card payment system is broken anyway. Why is the whole world not moving to a one-time transaction code faster? Because the credit card companies and banks are PROFITING from chargebacks. Only merchants get screwed.

SH - Can you explain the "one time transaction code" thing more?

Basically, in a payment system like SET (www.setco.org), the transaction occurs in steps that mimic more the way we do business in the real world.

1. Customer selects item from website and press [check out]. This generates an order form.

2. The order form is digitally signed by merchant, signifying that the merchant agrees to sell the items to the customer.

3. The customer digitally sign a payment form (equivalent to a cheque), signifying that the customer agrees to pay a certain amount of money to the merchant.

4. The "hash"/digest of both the order and payment form is combined and digitally signed by the customer, approving the transaction, and later sent to the payment gateway. This is the one time transaction code that I am talking about. The code is valid only for that particular transaction and cannot be used by the merchant to charge money from customer in the future, except for this transaction. Forfeiting the number is also very very difficult, since the merchant ideally cannot forge the customer's signature.

I could be wrong on the details. Somebody more knowledgeable on SET should be able to correct what I said, but the essence is more or less this: there is no secret (CC number) that is shared by the customer to the merchant.

In the current online credit card transaction scheme, you as a customer are supposed to keep your CC number "secret". But how can this be, since with every transaction you are distributing the number to the merchant. Once a nasty person gets a hand on your CC number, you are screwed. You can always chargeback when he/she charges you for something you do not want to pay, but what if that person redistribute your CC info to a thousand other crackers? In the end, you will need to get a new number. And the whole cycle begins again.

Credit card was designed to be used in offline transaction, where the card itself is required physically for authorization. The store salesperson/merchant will know your number, but so what you say. They can't buy anything with that piece of information since they do not have the card.

Credit card gives the maximum protection to the consumer, but the current system is a bit unfair to the merchants.

SET is, as I am told, does not obliterate the presense of credit cards. Instead, it eliminates the need to share our credit card numbers to the merchants. Merchants are no longer burdened with the obligation to keep the numbers secret.