Unformatted text preview: merchant nightly, but is paid by the customer only at the end of the month. Many cards offer 1% cash back or airline miles. What fraction of the merchant discount is taken by these costs? Assume the credit card company obtains funds at 6% per year, or about 0.5% per month. Assume that partners subsidize half the incentives (miles, cash back). d. How do the credit card issuers make money on credit cards, then? Discuss aggressive marketing, monthly finance charges, and aggressive chargebacks of fraudulent charges to merchants if they haven’t followed all procedures required by the credit card company. e. Is there a long-term level of fraud that your company or organization will need to manage because it accepts credit cards?...
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This note was uploaded on 12/06/2011 for the course ESD 1.264j taught by Professor Georgekocur during the Fall '06 term at MIT.
- Fall '06