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Why on earth would we want this? Right now all of the burden is on the credit card companies. Any fraud is their liability. If we switch things up, and implem

Why on earth would we want this? Right now all of the burden is on the credit card companies. Any fraud is their liability. If we switch things up, and implement something like passwords or pins, WE get the liability. That’s worse than our current situation. And given how badly people get hacked or phished, all it means is that consumers lose. Right now, those “magic little numbers” work great, and in the case of fraud, we are protected. I don’t want the situation to reverse itself and have us the first to suffer from fraud.

ineedasername 6y ago
By law, at least in the US, the maximum a consumer can be asked to pay when there's fraudulent credit card activity is $50.
nouveaux 6y ago
Fraud liability usually falls on the business. Maybe the credit card companies shoulder the responsibility in some cases but I think its unlikely.
- ryanwatkins 6y ago
  The liability is usually with the card issuer (bank), unless the merchant fails to meet liability shift requirements - like processes a card via the manually entered numbers or magstripe, rather than the chip in the card if the terminal supports it. This the way card networks have encouraged migration to systems that support tokens and cryptograms to limit fraud. See https://www.creditcards.com/credit-card-news/understanding-emv-fraud-liability-shift-1271/ https://www.creditcards.com/credit-card-news/understanding-e...
  - creeble 6y ago
    I wish it were so. For card-not-present transactions (i.e., all online credit card transactions) the liability is the merchant's. There is no recourse for a merchant who is a victim of a stolen card, the money is simply removed from their account.
strbean 6y ago
> Right now all of the burden is on the credit card companies. Any fraud is their liability. Tell that to retailers who lose a gazillion dollars to fraud reversals every year.
- cdongrun 6y ago
  then those merchants should use the widely popular 3d secure system, which lets you enter a pin. by using it, they are protected from reversals by the terms of service. so a system that prevents them losing a gazillion dollars is available, and they opt to instead lose the gazillion dollars. it's their fault, and they should lose that money. we don't need to tell them anything -we just need to point and laugh.
  - strbean 6y ago
    See quelltext's response. Or, have your customers ditch you for the convenience of Target/Walmart/etc. who can afford to eat the losses rather than make the checkout process more painful.
  - quelltext 6y ago
    And then see customers complaining about the annoying extra steps. 3D Secure affects conversion rates adversely which means customers are generally happier without it and don't mind the fraud risk (as is consistent with the rest of this discussion on the thread).
    - wst_ 6y ago
      There is next iteration of 3DS rolling out right now. Many countries adopted it already. It's designed, among other things, to minimize the friction for the buyers.
      - quelltext 6y ago
        Yeah, you're right. I was mostly talking about the past/status quo.
nip180 6y ago
Fraud results in higher prices for consumers through higher prices and credit card interest/fees.
- mauvehaus 6y ago
  Sure, but this is fundamentally the same deal as insurance: we distribute the cost across the whole population at a constant, low cost rather than ask individuals to take a big hit with low probability. Unless you can eliminate fraud, those are basically your two choices.
  - Slartie 6y ago
    > Unless you can eliminate fraud Which is exactly the purpose of good security measures. Bad or nonexistent measures and an insurance against fraud slapped on all prices is a local maximum. Good security measures which really push back the fraud and allow prices to drop the insurance premium is obviously a better local maximum. You also don't have to eliminate 100% of fraud, just make it so rare that you can basically ignore the risk because it happening to you is as unlikely as being struck by lightning (or any other risk of life that people are comfortable to ignore due to it being vanishingly small). The classic credit card fraud with magstripes was the exact opposite of that: there was almost no credit card owner who didn't get hit by it, and while people generally didn't lose money due to reimbursement by the cc companies, they still lost time and nerves over some stupid interruption in their lives that was entirely unnecessary in the first place. I myself had one of my cards suddenly deactivated by the bank because of alleged fraud (it wasn't even real fraud, just some heuristic going crazy over an actually intended payment). I was on a cruise ship in the Caribbean sea when it happened and all of a sudden couldn't pay my beers with my ship card anymore. Fortunately I had a second card with me that was working so I continued using that, but in order to switch my onboard expenses account over to it I had to spend some time at the customer service desk on the ship, where there was a row of passengers standing at phones, occasionally speaking with someone in various languages, but most of the time they seemed to be waiting in silence for some kind of response. It took me a few minutes of overheard conversation until I realized that these guys were in the same spot that I was, but less well prepared; they didn't have another credit card with them and thus had to call their banks back home in order to get them to unlock their accounts again.
daurnimator 6y ago
with the change to chip & pin the liability was moved from the credit card companies to the merchants. (this is why banks pushed for it so hard)
GoblinSlayer 6y ago
>Any fraud is their liability. If you don't keep your card safe, it's your liability, just like with passwords. Read the manual.

ineedasername 6y ago

By law, at least in the US, the maximum a consumer can be asked to pay when there's fraudulent credit card activity is $50.

nouveaux 6y ago

Fraud liability usually falls on the business. Maybe the credit card companies shoulder the responsibility in some cases but I think its unlikely.

ryanwatkins 6y ago
The liability is usually with the card issuer (bank), unless the merchant fails to meet liability shift requirements - like processes a card via the manually entered numbers or magstripe, rather than the chip in the card if the terminal supports it. This the way card networks have encouraged migration to systems that support tokens and cryptograms to limit fraud. See https://www.creditcards.com/credit-card-news/understanding-emv-fraud-liability-shift-1271/ https://www.creditcards.com/credit-card-news/understanding-e...
- creeble 6y ago
  I wish it were so. For card-not-present transactions (i.e., all online credit card transactions) the liability is the merchant's. There is no recourse for a merchant who is a victim of a stolen card, the money is simply removed from their account.

strbean 6y ago

> Right now all of the burden is on the credit card companies. Any fraud is their liability. Tell that to retailers who lose a gazillion dollars to fraud reversals every year.

cdongrun 6y ago
then those merchants should use the widely popular 3d secure system, which lets you enter a pin. by using it, they are protected from reversals by the terms of service. so a system that prevents them losing a gazillion dollars is available, and they opt to instead lose the gazillion dollars. it's their fault, and they should lose that money. we don't need to tell them anything -we just need to point and laugh.
- strbean 6y ago
  See quelltext's response. Or, have your customers ditch you for the convenience of Target/Walmart/etc. who can afford to eat the losses rather than make the checkout process more painful.
- quelltext 6y ago
  And then see customers complaining about the annoying extra steps. 3D Secure affects conversion rates adversely which means customers are generally happier without it and don't mind the fraud risk (as is consistent with the rest of this discussion on the thread).
  - wst_ 6y ago
    There is next iteration of 3DS rolling out right now. Many countries adopted it already. It's designed, among other things, to minimize the friction for the buyers.
    - quelltext 6y ago
      Yeah, you're right. I was mostly talking about the past/status quo.

nip180 6y ago

Fraud results in higher prices for consumers through higher prices and credit card interest/fees.

mauvehaus 6y ago
Sure, but this is fundamentally the same deal as insurance: we distribute the cost across the whole population at a constant, low cost rather than ask individuals to take a big hit with low probability. Unless you can eliminate fraud, those are basically your two choices.
- Slartie 6y ago
  > Unless you can eliminate fraud Which is exactly the purpose of good security measures. Bad or nonexistent measures and an insurance against fraud slapped on all prices is a local maximum. Good security measures which really push back the fraud and allow prices to drop the insurance premium is obviously a better local maximum. You also don't have to eliminate 100% of fraud, just make it so rare that you can basically ignore the risk because it happening to you is as unlikely as being struck by lightning (or any other risk of life that people are comfortable to ignore due to it being vanishingly small). The classic credit card fraud with magstripes was the exact opposite of that: there was almost no credit card owner who didn't get hit by it, and while people generally didn't lose money due to reimbursement by the cc companies, they still lost time and nerves over some stupid interruption in their lives that was entirely unnecessary in the first place. I myself had one of my cards suddenly deactivated by the bank because of alleged fraud (it wasn't even real fraud, just some heuristic going crazy over an actually intended payment). I was on a cruise ship in the Caribbean sea when it happened and all of a sudden couldn't pay my beers with my ship card anymore. Fortunately I had a second card with me that was working so I continued using that, but in order to switch my onboard expenses account over to it I had to spend some time at the customer service desk on the ship, where there was a row of passengers standing at phones, occasionally speaking with someone in various languages, but most of the time they seemed to be waiting in silence for some kind of response. It took me a few minutes of overheard conversation until I realized that these guys were in the same spot that I was, but less well prepared; they didn't have another credit card with them and thus had to call their banks back home in order to get them to unlock their accounts again.

daurnimator 6y ago

with the change to chip & pin the liability was moved from the credit card companies to the merchants. (this is why banks pushed for it so hard)

GoblinSlayer 6y ago

>Any fraud is their liability. If you don't keep your card safe, it's your liability, just like with passwords. Read the manual.