4 ms·

Low trust versus high trust society is the thing you need to understand here. You live in a high trust society which means that, in general, it is more efficien

by zxcmx 9y ago

Low trust versus high trust society is the thing you need to understand here. You live in a high trust society which means that, in general, it is more efficient to optimise for conversion rate than to deny valid but incompetent or "unable to provide all the details" consumers.

zAy0LfpBZLC8mAC 9y ago
While that might be true to a degree, chances are that what is really going on here is that it is more profitable to externalize the costs of insufficient authentication to unsuspecting people. While both result in higher profits, one does so by actually increasing the value that is being created while the other does so by making a third party pay, possibly even more than the increase in profit, so one of them is more efficient for society, while the other is just more efficient for the company but might still even be less efficient for society overall.
- zxcmx 9y ago
  I understand, but in practice the fraud liability when it comes to identifying parties between two huge companies is very, very clearly laid out. As in, weeks or months or years of discussion. Not talking about credit cards thougn which are kind of a special case, where yes, totally merchant gets screwed.
snarf21 9y ago
I understand what you are saying but that just means that the consumer pays for that in any case (in higher prices or interest rates or ...). Using your verbiage, I would like it to be even "higher" trust so that I don't have to pay for fraud that seems almost trivial to prevent.
- zxcmx 9y ago
  It is not trivial to prevent at all. You need to spend money and fraud prevention effort at every trust point. All of this costs literal salaries of people who say "no computer says no" at every point. Those people also suffer risk of physical assault. In the electronic space you need to pay for "social media consultants" and look after twitter and facebook and such. You would be surprised how incredibly expensive the things you seem to take for granted are, to a large organisation which pays proper wages to people. Practically speaking if your personal details have been disclosed by some douchebag fucking company it is very difficult to distinguish you as a caller from some random internet asshole impersonating you.
  - snarf21 9y ago
    Not attacking you but you've lost me. How does switching to chip+pin at the gas pump instead of zip code cost "salaries of people" or "risk of physical assault"? There might be a cost to upgrade the panels to read the chip but they need upgraded anyway with electro-mechanical locks to prevent skimmers anyway. There are also savings in police, courts, incarceration, etc. This won't stop all obviously, but there is a subset of criminals who perform CC fraud because it is so easy and hard to get caught.
    - zxcmx 9y ago
      Chip and pin switch is the best case. Think about all your other accounts. Gas, power, water, fines, etc. Also i don't know have ever been involved in an "it upgrade" project and what it means to have the gas pumps now do different things. I want life to not be like that, but I think you would find its a bit harder than you are imagining.
      - deleted 9y ago
        [deleted]
      - Tuna-Fish 9y ago
        > Think about all your other accounts. Gas, power, water, fines, etc. The way those work in the rest of the world is basically by giro. You control your bank account, and the only possible transaction is you sending out money to other bank accounts. If I provide you a service I need to get paid, I send you a bill, either in paper form (that you can read with your smartphone) or electronically. You look it over and make the decision to pay or not. The system is not perfect and fraud still exists (mostly in the form of trying to pass a fake bill as a real one), but fraud is much less prevalent than in the US system.
        thwarted 9y ago
        If I provide you a service I need to get paid, I send you a bill, either in paper form (that you can read with your smartphone) or electronically. You look it over and make the decision to pay or not. The problem is that that someone else can claim to be me at my address to you (the impersonator), you send the bill to me (the authentic). I look this bill over and decide not to pay because I didn't request these services. Now we have a dispute, all due a third-party who impersonated me. Unfortunately, this is also exploitable by me to later claim I didn't purchase the service from you, which I might do to avoid paying. There's currently no easy way for you, as the service provider, to authenticate the request without an out-of-band opt-in (mailing a contract to the same place you'd send the bill to confirm that the services would be paid for), which would delay the delivery of said services. By the time the third-party has received the services and you've sent the bill to the authentic party, the impersonating party is long gone, and the authentic party is left holding the bag as the less powerful party in the exchange/dispute.
crdoconnor 9y ago
It's not a question of trust it's a question of where the legal liability falls.
kartan 9y ago
> it is more efficient to optimise for conversion rate than to deny valid but incompetent or "unable to provide all the details" consumers. And that's not a big problem even that it is not nice. The problem is when your company lends money to someone that says it's me. And it becomes my problem. Why? The company wants a lot of conversions, so it has a low entrance cost. Then that company should pay for that problem, not unrelated third parties. > Low trust versus high trust society is the thing you need to understand here. For me, that's just one of the reasons. Sweden, for example, is a high trust society. But companies are trying to play fair because they are going to be punished otherwise. Isn't that fair? But, of course, in a society with a lot of corruption, and cheating, and low trust. Companies are going to defend themselves more. As they risk will get more fraudulent transactions that real ones.

by zxcmx 9y ago

zAy0LfpBZLC8mAC 9y ago

While that might be true to a degree, chances are that what is really going on here is that it is more profitable to externalize the costs of insufficient authentication to unsuspecting people. While both result in higher profits, one does so by actually increasing the value that is being created while the other does so by making a third party pay, possibly even more than the increase in profit, so one of them is more efficient for society, while the other is just more efficient for the company but might still even be less efficient for society overall.

zxcmx 9y ago
I understand, but in practice the fraud liability when it comes to identifying parties between two huge companies is very, very clearly laid out. As in, weeks or months or years of discussion. Not talking about credit cards thougn which are kind of a special case, where yes, totally merchant gets screwed.

snarf21 9y ago

I understand what you are saying but that just means that the consumer pays for that in any case (in higher prices or interest rates or ...). Using your verbiage, I would like it to be even "higher" trust so that I don't have to pay for fraud that seems almost trivial to prevent.

zxcmx 9y ago
It is not trivial to prevent at all. You need to spend money and fraud prevention effort at every trust point. All of this costs literal salaries of people who say "no computer says no" at every point. Those people also suffer risk of physical assault. In the electronic space you need to pay for "social media consultants" and look after twitter and facebook and such. You would be surprised how incredibly expensive the things you seem to take for granted are, to a large organisation which pays proper wages to people. Practically speaking if your personal details have been disclosed by some douchebag fucking company it is very difficult to distinguish you as a caller from some random internet asshole impersonating you.
- snarf21 9y ago
  Not attacking you but you've lost me. How does switching to chip+pin at the gas pump instead of zip code cost "salaries of people" or "risk of physical assault"? There might be a cost to upgrade the panels to read the chip but they need upgraded anyway with electro-mechanical locks to prevent skimmers anyway. There are also savings in police, courts, incarceration, etc. This won't stop all obviously, but there is a subset of criminals who perform CC fraud because it is so easy and hard to get caught.
  - zxcmx 9y ago
    Chip and pin switch is the best case. Think about all your other accounts. Gas, power, water, fines, etc. Also i don't know have ever been involved in an "it upgrade" project and what it means to have the gas pumps now do different things. I want life to not be like that, but I think you would find its a bit harder than you are imagining.
    - deleted 9y ago
      [deleted]
    - Tuna-Fish 9y ago
      > Think about all your other accounts. Gas, power, water, fines, etc. The way those work in the rest of the world is basically by giro. You control your bank account, and the only possible transaction is you sending out money to other bank accounts. If I provide you a service I need to get paid, I send you a bill, either in paper form (that you can read with your smartphone) or electronically. You look it over and make the decision to pay or not. The system is not perfect and fraud still exists (mostly in the form of trying to pass a fake bill as a real one), but fraud is much less prevalent than in the US system.
      - thwarted 9y ago
        If I provide you a service I need to get paid, I send you a bill, either in paper form (that you can read with your smartphone) or electronically. You look it over and make the decision to pay or not. The problem is that that someone else can claim to be me at my address to you (the impersonator), you send the bill to me (the authentic). I look this bill over and decide not to pay because I didn't request these services. Now we have a dispute, all due a third-party who impersonated me. Unfortunately, this is also exploitable by me to later claim I didn't purchase the service from you, which I might do to avoid paying. There's currently no easy way for you, as the service provider, to authenticate the request without an out-of-band opt-in (mailing a contract to the same place you'd send the bill to confirm that the services would be paid for), which would delay the delivery of said services. By the time the third-party has received the services and you've sent the bill to the authentic party, the impersonating party is long gone, and the authentic party is left holding the bag as the less powerful party in the exchange/dispute.

crdoconnor 9y ago

It's not a question of trust it's a question of where the legal liability falls.

kartan 9y ago

> it is more efficient to optimise for conversion rate than to deny valid but incompetent or "unable to provide all the details" consumers. And that's not a big problem even that it is not nice. The problem is when your company lends money to someone that says it's me. And it becomes my problem. Why? The company wants a lot of conversions, so it has a low entrance cost. Then that company should pay for that problem, not unrelated third parties. > Low trust versus high trust society is the thing you need to understand here. For me, that's just one of the reasons. Sweden, for example, is a high trust society. But companies are trying to play fair because they are going to be punished otherwise. Isn't that fair? But, of course, in a society with a lot of corruption, and cheating, and low trust. Companies are going to defend themselves more. As they risk will get more fraudulent transactions that real ones.