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Tuesday, April 16, 2024

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Financial Education – Credit Card Payments Are Often Crypto Payments In Disguise

Clients of so-called high-risk merchants such as online casinos, online brokers, adult entertainment, or online ticket selling are increasingly asked to make their payments and deposits via credit and debit cards. We call that “crypto payments in disguise.” By offering these disguised crypto payments, merchants avoid chargeback disputes. As a result, the client loses the opportunity to get his money back with a chargeback claim via his bank (issuing bank). Do not do that!

Here is how it works:

  1. For credit card deposits, merchant redirect their clients to a regulated or unregulated crypto exchange such a mercuryo where cryptocurrencies are purchased with the card. From the credit card company’s perspective, the crypto exchange is then the merchant.
  2. The purchased cryptocurrencies are then transferred to the client’s wallet, meaning that the merchant has properly delivered to the cardholder and fulfilled the respective order by the book.
  3. The cryptos are then transferred to the merchant’s wallet and away they go. Forever!
  4. If the client starts a chargeback dispute, he has no chance. Because the card accepting merchant, the crypto exchange, can prove that it has properly delivered the cryptos. The chargeback dispute has almost no chance.

Under any circumstances, avoid depositing via cryptocurrencies at high-risk merchants such as online brokers, online casinos, or adult entertainment at all costs. You are giving away your chargeback parachute!

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