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How do banks handle chargebacks with ApplePay?

Dark Goob

Dark Goob

macrumors regular
Original poster
Jun 6, 2007
184
45
Portland, OR
How do banks handle chargebacks with ApplePay?

I tried googling about it, and I can't find any current info. All I could find was something saying that in October 2015, chargebacks will be the merchants' responsibility if they don't have an NFC-capable terminal, no matter what.

But right now if a merchant accepts a $5000 ApplePay payment, if it then gets charged back, what happens? Can the merchant be held liable?

For those of you who don't know what chargebacks are, and who have no experience with them, it's really complicated. So, please read http://www.wikipedia.org/wiki/Chargeback, etc., before commenting here. Thanks.)
 
my guess is, that chargebacks won't be allowed. My fingerprint proves that I paid for the item using applepay.
 
Chargebacks made against an Apple Pay payment are treated the same way the card issuer treats all other chargebacks. Nothing changes.
 
There's many reasons for chargebacks when you pay for a good or service.
Just because it was you that paid for it doesn't mean you can't dispute the transaction.
My guess is it varies by different banks.
 
JayLenochiniMac said:
What if the item later breaks or doesn't work as advertised and the merchant refuses to take it back? Of course chargebacks will be allowed.
Click to expand...

Most charge backs from the industry I am in occurs when the customer states they didn't receive (or request) the service, hence their card (or information) was stolen.

With Apple Pay, how will they be able to state that, if they have to use their fingerprint, is my point.
 
neile45 said:
Most charge backs from the industry I am in occurs when the customer states they didn't receive (or request) the service, hence their card (or information) was stolen.

With Apple Pay, how will they be able to state that, if they have to use their fingerprint, is my point.
Click to expand...

Can still happen if you use Apple Pay in apps to order something and it never arrived, isn't as described, etc. It isn't limited to in-store purchases.
 
neile45 said:
Most charge backs from the industry I am in occurs when the customer states they didn't receive (or request) the service, hence their card (or information) was stolen.

With Apple Pay, how will they be able to state that, if they have to use their fingerprint, is my point.
Click to expand...

Because there are still many reasons to file a chargeback that don't involve you not authorizing a purchase or not receiving an item.
 
neile45 said:
Most charge backs from the industry I am in occurs when the customer states they didn't receive (or request) the service, hence their card (or information) was stolen.

With Apple Pay, how will they be able to state that, if they have to use their fingerprint, is my point.
Click to expand...
Simple really. I ordered furniture and waited 17 weeks. I was about to initiate a chargeback. My CC company was willing to do one. I freely admitted I paid up front, but was also promised delivery in 7 weeks, not 17.

As others have stated, chargebacks happen even when the purchaser has been verified. However in most such cases, they can also be avoided if the merchant offers a refund before the customer has to resort to disputing with their credit card company.
 
Why wouldn't the standard credit card or debit card rules for chargeback apply? The underlying transaction isn't any different with Apply Pay; the authorization and transmitted info is different making it more secure, but it isn't a new type of payment.
 
Dark Goob said:
I tried googling about it, and I can't find any current info. All I could find was something saying that in October 2015, chargebacks will be the merchants' responsibility if they don't have an NFC-capable terminal, no matter what.

But right now if a merchant accepts a $5000 ApplePay payment, if it then gets charged back, what happens? Can the merchant be held liable?
Click to expand...
Correction, I believe merchants need to have EMV-capable terminals. NFC support is optional. As for ApplePay chargebacks, it'll be handled same as regular credit card chargebacks.
 
rui no onna said:
Correction, I believe merchants need to have EMV-capable terminals. NFC support is optional.
Click to expand...

Even EMV capable terminals are "optional" in a sense, but to your point I'd bet the acquirers will be requiring smaller merchants to change out any non-EMV capable terminals. NFC is not required as you note, yet since apparently many of the newer/current terminals include NFC capability it'd likely start showing up as a "ride along" to the EMV upgrade. If the networks provide incentives to the acquirers to accept EMV tokenized transactions then we may see the acquirers pass along incentives to merchants to get the NFC capable EMV terminals and keep NFC turned on.

Of course the larger the merchant the lesser the power of the acquirers over what that merchant does.
 
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