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In the US, the card networks along with banks spend a huge amount of effort towards reducing consumer frictions by asking for the minimum amount of verification
by blueblisters 6y ago
In the US, the card networks along with banks spend a huge amount of effort towards reducing consumer frictions by asking for the minimum amount of verification during a purchase. This was perhaps the primary reason why cardholders are rarely asked for a pin after a purchase (what if they forget it)? Of course this leads to increased fraud, which often has to be borne by merchants and leads to increased prices.
- orev 6y agoPlacing the burden of fraud on merchants does make sense, as they are the ones present at the time of the transaction, and theoretically in the best position to authenticate the purchaser, via ID, etc. If a merchant is doing a bad job at it, and their prices go up, then consumers go elsewhere for those goods, incentivizing the merchant to prevent fraud. It seems to work well enough most of the time via market forces instead of needing government regulation and enforcement.