PJ> I have a friend who is thinking about setting up
PJ> one of those 0055 services which requires callers
PJ> to use their credit card for online payment.

You do realise that the 0055 type services provide a mechanism
whereby you can bill to the phone service that calls it dont you ?

PJ> But I was asked to find out how does the provider of
PJ> the service know if the credit card details are correct

Well, there isnt a whole lot of possibility for checking this
stuff except in the sense that it is a valid credit card.

PJ> and also if there is actually the credit on the card ??

Thats completely routine, the credit card system
allows for merchants to check that with a phone call.

PJ> Basically there seems to be alot of room for
PJ> fraud if callers want to give wrong card details

Yes, particularly when ordering something which isnt tangible. There
is SOME protection with the use of credit cards for mail order of
physical goods because the goods do have to be sent to a physical
address for the thief to benefit. When say paying for some one to
say norty things in your ear, there isnt really any way of knowing if
its their card. And no way to withdraw what you delivered to them once
the real card holder finds out and screams at their bank about it.

And in that situation the MERCHANT loses his dough too, its part
of what you have to agree to if you want to do phone credit cards.

PJ> or use a card that has been cancelled or the credit limit has expired...

Those two are no big deal if you are prepared to get the transaction
authorised. Someone has to do that tho and it normally cant be justified
unless the transaction is for a significant amount of money.

--- PQWK202