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It's interesting because according to my understanding, the U.S. is actually using a pretty good system for dealing with credit card fraud in general...which sa

It's interesting because according to my understanding, the U.S. is actually using a pretty good system for dealing with credit card fraud in general...which sadly seems to be the rare exception in regards to consumer protections in the U.S. Basically -- again, as I understand it -- the losses due to credit card fraud is either on the merchant or the card-issuer -- generally the two groups most equipped to deal with the issue. If Visa thinks it's losing too much money due to fraud, they have the control to influence change on the system, put more resources into detecting or preventing it, etc. But they can generally view it as a cost-profit analysis, and handle it appropriately. Of course there's side effects, it costs all of us involving the courts or police, to some degree, but in the absence of a perfect solution in an ideal world, that's something that was going to happen anyway. Which isn't to say the future couldn't change; money-ed lobbyists, such as Visa, can get the laws in the U.S. system modified to put the onus on the consumer, or on the business (which could drastically damage small businesses), but for the time being, the system does seem, to me, to be working well ... here.

oasisbob 9y ago
Yup, that's essentially how the system works. One reason that can work in the US is because there is so much money slopping around in the system from high interchange/network fees. An issuing financial institution may bear most of the risk of fraudulent transactions, but the revenue of interchange fees is easily 10x that of fraud. So, there are aligned incentives to keep the system secure which ends up being friendly to the individual consumer, but it comes at a cost because consumers bear this cost in the form of opaque fees in everything they buy.
- 411mrc 9y ago
  Get a good cashback card and it's not that much. Use your personal cashback card for billable business expense and you probably make money. One thing it does do is incentivize the banks to monitor transactions. They know my card # has been stolen before I have a clue, calling me nearly immediately.
  - NegativeK 9y ago
    Consumer incentives are paid by the merchant, who will adjust prices to compensate.
    - 411mrc 9y ago
      Merchant fee - cash back = net cost to consumer
oneplane 9y ago
Well, dealing with symptoms, no matter how good the system to deal with it is, is still just covering symptoms, not problems. I'm personally more attracted to fixing the problem instead of trying to keep dealing with the fallout.

oasisbob 9y ago

Yup, that's essentially how the system works. One reason that can work in the US is because there is so much money slopping around in the system from high interchange/network fees. An issuing financial institution may bear most of the risk of fraudulent transactions, but the revenue of interchange fees is easily 10x that of fraud. So, there are aligned incentives to keep the system secure which ends up being friendly to the individual consumer, but it comes at a cost because consumers bear this cost in the form of opaque fees in everything they buy.

411mrc 9y ago
Get a good cashback card and it's not that much. Use your personal cashback card for billable business expense and you probably make money. One thing it does do is incentivize the banks to monitor transactions. They know my card # has been stolen before I have a clue, calling me nearly immediately.
- NegativeK 9y ago
  Consumer incentives are paid by the merchant, who will adjust prices to compensate.
  - 411mrc 9y ago
    Merchant fee - cash back = net cost to consumer

oneplane 9y ago

Well, dealing with symptoms, no matter how good the system to deal with it is, is still just covering symptoms, not problems. I'm personally more attracted to fixing the problem instead of trying to keep dealing with the fallout.