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Abstract
Currently credit card is the most general use of people's credit tool and plastic currency, it has postponed payment features, cardholders are able to obtain goods or services. The entire credit card business operation consists of "Cardholder", "Merchant", "acquirers", "card issuers", "credit card organization", "clearing agency" six main components, if cardholder settled the payment but not yet claim the goods or services, once the merchants out of business without warning, its immediately caused non-compliance risk, acquirers that need to take responsibilities on behalf of merchants to compensate cardholders. In recent years, numerous similar cases happened, indeed is significant impact on cardholders and acquirers, this study is to establish the risk of non-compliance by Logit regression model, as the acquirer are able to have early warning monitoring merchants reference.
This study was authorized and corporate by A acquirer and its merchants in Taiwan, during the study period from September 2000 to September 2010, this study sample of 500 random manner as a sample merchant, namely 46 samples of non-compliance, the normal sample of 454. In this study, a total of 23 independent variables, 13 variables were related to merchants, which source of 8 variables were merchant business type and conditions, and the remaining 5 variables from the results of credit records of JCIC; and 10 other variables are person in charge of the merchants, of which 2 variables are owner’s sexuality and age, the remaining 8 variables were owner’s credit record of JCIC.
This research include corporate organizations, merchant credit card transactions annual spending, merchants and acquirers cooperation period, owner’s total charge of credit card cash advance, credit card revolving charge etc, the five variables ratio showed significant, the studies suggest that the above variables were similar to practical experience, it is more specific and valuable for acquirer to audit and monitor on merchant’s corporation. In addition, by the early-warning model of verification resulted acquirers only obtain very low income of service fee from merchants, but each non-compliance case caused very high losses, which means that acquirer the hardship, and also pointed out that the importance of risk management, so only minimize the merchants risk of non-compliance, is the key of credit card acquiring industry to survival.
Keywords: acquirer, credit card, merchant, early warning models, non compliance risk
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