Eliminate Fraud from Internet Payments using Bitcoin
Posted on 2013-01-07 10:15:36
StompRomp.com is a guitar shop located in New Hampshire owned by Josh and Zach Harvey. The Harvey brothers have been in the guitar business for 7 years in Israel before moving to America.
StompRomp experiences a very common problem called payment fraud, because they sell a high ticket item. They, and other merchants, are pretty astute at screening for suspicious activity and payment fraud in their retail stores. They can check for photo ID, they can look at the condition of the card, and they can get a signature.
But when taking a payment over the internet, to try and reach customers outside of New Hampshire, they do not have the same abilities. The likelihood of fraud on internet payments is 12 times higher than in person. And to make matters worse, when taking a payment from a foreign country, the risk of fraud is 3 times higher than for domestic transactions.
Whenever Josh and Zach get a credit card payment from outside the US, they seek authorization through their credit card processor, and it gets approved. But these guys have been burned before, so they know better.
"We have to spend an hour being a private detective on every international sale," says Josh Harvey. "We need to contact the buyer, ask them who is their employer, what is their address history, what is this purchase for. We need to do our own research to assess the risk whether this is a scam or not. I honestly don't know what we are paying Visa for, when we have to do all the work."
StompRomp began accepting payments in bitcoin in 2012 when they learned how bitcoin can eliminate the risk of payment fraud.
Bitcoin is designed from the ground up as an internet currency, and operates completely peer-to-peer. The breadth and size of the bitcoin network makes it extremely difficult to commit a fraudulent payment.
StompRomp uses the Magento shopping cart platform with a bitcoin payment plugin designed by BitPay. The BitPay plugin allows StompRomp to collect a bitcoin payment without writing any code.
The shopper never has to leave the stompromp.com website to make a purchase, since the payment module is embedded in the Magento checkout.
To see a video demonstration of making a bitcoin purchase at stompromp.com using the BitPay Magento bitcoin plugin, watch here: