Vendors accept a certain discount on the amount owed in return for transferring the payment risk to the credit card issuer. This same concept applies throughout the entire system of commerce, electronic or otherwise.
A basic underlying principle of insurance, whereby the risk of financial loss is transferred from one party to another.
The transfer of the financial consequences of a risk to another by legal contract and/or insurance
The reassignment of risk to another party.
Shifting all or part of a risk to another party. Insurance is the most common method of risk transfer, but other devices, such as hold harmless agreements, also transfer risk. One of the four major risk management techniques. See Risk Management.
When the hazards of, exposures, or financial responsibility for loss is transferred or shifted from the risk to another entity. Various types of risk transfer or risk management methods are available and may include insurance policies, hold harmless and other contractual agreements, leasing mechanisms, or other alternate financing.
An insurance contract is designed to transfer risk. Individuals face the risk of monetary losses resulting from a death, disability or illness. An individual can ensure that they will not have to bear the complete monetary loss due to these factors by purchasing an insurance policy, which transfers the risk of loss to the insurance company. If a death, disability or illness occurs, the insurance company will pay proceeds that will compensate for the loss.