a harder problem for early stage web merchants was getting a merchant
financial institution .... the merchant financial institution that
sponsors a merchant for payment transactions ... takes financial
responsibility for that merchant.

the standard procedure was to send somebody out to the retail
brick&morter and do an asset inventory ... to see if the merchant went
under ... that there would be enuf assets left to help cover the
merchant financial institutions losses.

retail web merchants might have nearly zero assets ... they leased time
with a webhosting and fulfillment was outsourced ... so there was no
onhand inventory and effectively no assets. if they were totally
unsuccesful ... then the merchant financial institution would have
little outstanding transaction financial liability.

there were cases where merchant financial institution would try and
cancel a merchant as it became succesful ... since the outstanding
transaction liability for the merchant financial institution could be
going way up ... with no increase in assets to cover the finanical
institution's outstanding liability.

for such "high risk" merchants ... the merchant financial institution
discount might actually be bigger than the MOTO discount ... or any
difference between MOTO and card-present.

early web merchants tended to be existing brick&morter operations where
web MOTO ("mail-order/telephone-order") transactions were not separated
out from non-web MOTO transactions.

there were all sorts of strategy meetings in the '95 time-frame, brain
storming about how to get a bank's financial risk department to even
approve purely web merchant signup (and MOTO vis-a-vis card-present
wasn't a primary issue).

The Cryptography Mailing List
Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]

Reply via email to