Be careful with Square's Payment Links.

[JD-Electronics]

I been using square for the past 10 years and always reluctant to sell online because of the risks. This past holiday season many of my customers were shopping online or from home, which made me think, "ok let's try square's Payment Links" we tried a few for a test run and that was the worst decision we took. We got charged back on 4 transactions out of 5. And we lost all charge back cases even though we had receipts, text messages, time stamps as proof. we lost about $600 (for a small business that is quiet a bit). So if you are using Payment Links just keep in mind that you will definitely loose any charge backs cases. We have stopped all payment link transactions and we are looking for a different solution that does not involve going through square. If you guys have any recommendations I'll appreciate it.   

[TheRealChipA]

Hey there @JD-Electronics.  First, sorry about your bad string of luck there.  However, I need to correct your misperception, here.  You did not lose because you used payment links.  You lost because federal regulations currently give total control to the card-issuing bank to decide on disputes.  That’s like letting the fox loose in the hen house! Square (nor any processor like them) can only provide the evidence, but they have to live with the decision that your customer’s bank makes.  It’s insane, but it is true.  Now….

Payment links are no riskier than having an online store.  Anyone who sells online should be fully aware of this risk.  Online payment fraud is rampant and will only get worse.  Square does have some tools to help, however.  It is called Risk Manager, and is found on our web dashboards at Payments > Risk Manager.

One of the best Risk Manager tools is called 3D Secuere.  You can use it to request that the card-issuing bank do a more thorough verification that a customer is authorized to use the card they are using.  If you set it up correctly, you get stronger guarantees in the event of a dispute.  Some of these are:

• If you have a 3D Secure rule enabled and a payment does not invoke it due to a service outage, system failure, or if a qualifying customer’s card-issuing bank does not have 3D Secure enabled, Square will cover the dispute, also known as a chargeback.

• If you have a 3D Secure rule enabled and a payment goes through because the issuing bank verified it, you are not responsible for covering a fraud chargeback (but may be responsible for other types of disputes).

• If the customer is unable to verify that they are the rightful cardholder, then they will not be able to complete the transaction. However, if the customer verifies that it really is them and that the payment is not fraudulent, then they can complete the transaction. If the transaction is completed and authorized through 3D Secure, the liability for fraud chargebacks then shifts from the seller to the card-issuing bank.

I’d recommend reading through the help documentation in the links I provided, as well as watching the videos.  It will be well worth your time.

Let me know if you have any other questions.

[JD-Electronics]

Yes thank you, I'm aware of all the documentation, including risk manager, this should be a default setting, many people are not tech inclined and have difficulties even trying to set up 2FA. I'm pretty sure that many are not aware of these settings, anyone can take a look on reddit or other forums. Anyway, I won't be using square for my online transactions, just as a personal preference, nothing against the service.

JD>  

[rtfulk]

@TheRealChipA I never knew about 3D Secure, thanks for this post I just activated it on our website.

[JD-Electronics]

You are welcome, thanks for proving my point, sometimes customer care just gives us the side eye like we are plain stupid, but they do not realize that this is an issue. Good luck to you and your business. 

[rtfulk]

Thanks,  Sorry about your chargebacks. Did the bank or Square give you any indication on why your customers filed a chargeback, did they not recognize the charge? or did they just do it to get the item for free? Good luck and hopefully this won't stop you from selling online.

[TheRealChipA]

@rtfulk That made my day. After you’ve used it for an appropriate time, I’d love to hear your thoughts. Honestly it would be great to have a fellow Risk Manager Champion here in the community. 

[rtfulk]

@TheRealChipA I'll keep you posted, does it let you know if you have an transaction cancelled?

[TheRealChipA]

@rtfulk i believe so. But I need to do a little research tomorrow when I’m fresh and alert. I’ll get back to you in that. If it doesn’t, I possibly know a workaround. But I need to confirm that first. 

[rtfulk]

@TheRealChipA Thanks, we get orders daily and I wonder if I needed to look for any cancelled transactions or if it would appear on the order page.