So what happens if someone uses a fake CC on my store? Do I get fined by the CC companys for other peoples fraud? Im just asking this because an online store I know about doesnt accept CC's anymore due to fraud.
Fake credit card would most likely not clear the bank's verification if the number is not in the system or does not match up to the actual data of a credit card holder. The biggest problem is not fake but rather stolen credit card details. Most of the time, you require the card holder name, address, phone number, Card Number, Expiry Date and CVV numbers to make a purchase. Because you are looking at online transaction, the merchant cannot inspect the card, get a signature or get the card holder face and as such the card holder would usually be sided. However, it is not all lost as the merchant needs to prove beyond a shadow of a doubt that the card holder was the one who made the purchases. Most online payment processor would check the card number against a database of stolen or disputed credit cards, check IP against the mailing address/country and so on. Of course when your customer does a chargeback, you need to provide 3rd party shipping to prove that the product is delivered to the card holder to the card holder's billing address and also that you have his signature to proof it. The good thing is that most people are honest in my experience and I do get like 1 or 2 customers who issues chargebacks a year. It is just the cost of doing business. I supposed the risk would also depend on the type of products you are offering and your targetted customer base.