If your monthly credit card statement feels like a litany of gibberish, you’re not alone. Mastercard and Visa are just waiting for the signal from the banks to clean up. In the meantime, it is unnecessarily expensive for everyone: consumers, merchants… and also the issuers of these cards.
There’s not much more mysterious document these days than a credit card statement. It’s not exactly a paragon of clarity, let’s be honest. This creates confusion where the consumer may not identify all the items overcharged, despite himself, or without knowing by whom.
It is impossible today to quantify this phenomenon, but it is a serious problem. There were two cases last year where a lack of clarity in payment systems allowed some 200 online vendors to pocket nearly $500 million. And that’s just the tip of the iceberg.
AMZN…who?
When an Internet user comes across a bargain on Amazon and buys the product in question, he will not then brag to his neighbor that he has just done business with “AMZN Co MKTP *1Q4VVE24”. He’s going to say, “Look at what I just bought on Amazon. »
His statement will say “AMZN Co MKTP *1Q4VVE24”. It is not impossible either, if the Internet user has crossed a border while shopping online, that the amount indicated does not correspond to the amount he thinks he has paid, given the conversion of the currency which is sometimes done by Mastercard. or Visa, sometimes by the transactional service used (PayPal, for example).
The same goes for all online shopping platforms: eBay, Etsy, Kickstarter, etc. It’s even more confusing for anyone who regularly buys from independent e-tailer sites, since once the purchase is completed, the bank statement will show the trader’s business name, not the name of their website. As a result, the information on his statement rarely matches the details of the transaction the buyer has in mind.
At least, usually the purchased product is the right one.
Subscribe again, they said!
Last year, we spotted around 200 mobile applications sold as a monthly or annual subscription that continued to charge their users for the service even after they deleted the application from their mobile. The victims of this subterfuge were relieved of some 500 million dollars.
These subscriptions continue without the knowledge of the consumer for various reasons. First, app stores are abdicating the responsibility of better regulating subscriptions sold by third parties. These should necessarily be accompanied, at the very least, by an expiry date not too distant.
These amounts may also appear insignificant on a credit card statement. It often identifies large purchases (groceries, restaurants, etc.) and assumes that the smaller amounts spent are not that important. When you lose sight of them in a list of transactions on your monthly statement that can easily stretch to three or four pages, they end up being expensive one day.
What do people do when they realize they’ve overpaid for an online subscription? They’re unsubscribing, if they can find the source. Or they call their credit card customer service. It is up to him to decide whether or not to cancel the transaction.
“Friendly Fraud”
Mastercard, Visa and the others can be hard to convince, because they are struggling these days with another kind of fraud, which is just like these refund requests and which has a very funny name: “friendly fraud”. . This is when a user purchases a product online, calls their bank for a reversal of the transaction (the exact term is a chargeback), but does not return the product.
Someone has to pay, and in this model Mastercard or Visa ends up paying. And that irritates them. With good reason: friendly fraud accounts for 70% of credit card fraud cases. It cost no less than US$132 billion in 2020 alone. This amount does not include the loss suffered by the merchants for having sent the product for which the issuer will in turn ask them for a refund.
In short, everyone is playing the fraud game. And nobody wins. Or almost.
An ergonomic solution
There is a term that is not often used in computing: ergonomics. Basically, ergonomics is the art of putting the right things in the right places so that everything looks natural (well, okay, it’s a science). We can tinker with this concept to promote certain behaviors. For example, a website can subtly entice its visitors to buy more than just the item they have in mind. It doesn’t work every time, but it works often enough for a site like Amazon to be the giant we know in online commerce today.
However, the typical monthly statement would fail a usability test. Yet issuers have the wherewithal to trade off all the gibberish it contains for the right website name, the right app icon graphic, and so on. It is possible to separate one-time purchases from recurring purchases such as subscriptions, so that they could consolidate all the subscriptions associated with the card on a digital statement. Even better: they could offer the option to unsubscribe with one click from unused services right on the statement.
Centralizing all of this would save everyone millions of dollars. A Mastercard spokesperson we met this spring assured us that the technology exists. The solution is therefore at hand. But she sleeps in a drawer.
Because it is up to the banks to adopt these tools sold to them by Visa and Mastercard. And for the banks to want to do it, their customers would simply have to request it.
Finally, clear and precise information!