Originally posted by selfmaderiches
The CC bank issuer is liable for paying off the card in this scenario, the bank will pay splitit regardless of fraud as split it is the point of sale and as soon as that money is allocated to the CC split it will receive the money month by month as per usall, if the card is cancelled the full amount comes to split it and they pass the money onto the point of sale merchant month by month as per agreement.
Thanks for your reply. So I guess then it leaves the issuing bank to monitor the default/fraud rate on this type of split payment system to ensure it does not become a higher proportion of defaults than single payment transactions. If the default rate is high, then the banks would need to somehow redress through additional measures. I guess that could result in higher merchant fees or some other form of protection for the issuing banks. I recall there were some teething issues with APT and fraud, but this seems to have settled down.