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Well yeah, it's the logical conclusion of how credit cards work - or at least used to work until very recently. You're entering a bunch of magical numbers. The

by crote 3y ago

Well yeah, it's the logical conclusion of how credit cards work - or at least used to work until very recently. You're entering a bunch of magical numbers. There is zero verification that you are in fact the cardholder. The store can't get its goods back once they have shipped. If the cardholder does a chargeback, you've just given away the entire order for free - plus a massive chargeback fee. The vast majority of orders will be delivered to the cardholder's home address - or at least reasonably close. The vast majority of long-distance orders are fraud. Do you expect the vendor to just eat the almost-guaranteed losses? Fraud like this isn't possible with payment methods like iDeal - which are essentially one-way bank transfers. You can order stuff to be delivered to the White House, for all the vendor cares. But the customers don't like it because they can't do a chargeback when something goes wrong with the order...

jermaustin1 3y ago
I know my data is skewed toward gift giving (I have an Etsy shop), and my sales number are not in the millions or even the thousands (but almost), so take what I say with a grain of salt. Looking at my data, in the last 12 months, only ~60% of my sales go to the person buying the product. I don't have any fraud or refund requests for the last 12 months, so... I'm not sure if "the vast majority" is accurate. Hell, 30% of my Amazon purchases go to family members, or friends. Some in other countries because it is cheaper to buy something on Amazon and have it ship to another country than trying to buy it locally and ship.
whstl 3y ago
> There is zero verification that you are in fact the cardholder This is not entirely true, this is location/bank specific. For my card, I just have to perform additional verification whenever necessary, by using 3D Secure. Currently I authorise or reject from an application. Before smartphones, I had to use a tiny electronic token generator keychain. I remember implementing the technology on software that I worked at in the late 2000s, when it had another name.
- crote 3y ago
  Yes, which is why I specified "or at least used to work until very recently". We're slowly moving in the right direction. 2FA is available with some credit cards for some transactions, but until it's mandatory for 100% of transactions the problem still remains.
  - nottorp 3y ago
    All credit cards in Europe. But with out of Europe stores it's a tossup if they use 3D secure or not.
carlosjobim 3y ago
> The vast majority of long-distance orders are fraud. What? Could you explain further? Almost anything ordered online is long distance.
seabass-labrax 3y ago
The truth is that the chargeback capability of VISA cards is simply insurance in disguise. On a technical basis, bank transfers are already capable of replacing credit card infrastructure, as is digital cash and cryptocurrency for that matter. Most domestic bank transfers involving my current account (UK <-> UK) complete more quickly than the average VISA payment takes to settle. Smartcards for contactless use are now the only thing missing, and only in some countries. Britain, notably, being one of those lacking it :/ I think if banks offered fraud victim insurance for payments made with digital cash, cryptocurrency and electronic cheques as standard (above and beyond that which they are obliged to provide by law, which is often scant), then VISA and MasterCard would practically disappear within the decade. With apologies to anyone in the industry, good riddance ;)
- spacebanana7 3y ago
  Visa and Mastercard will never disappear. Banks get interchange fees, consumers get chargeback protection and merchants got a stronger final settlement than cheques. The last of those is the most important. Merchants happily ate high fees and chargeback risk in the late 20th century because cards had a lower fraud risk than cheques. No modern payment system can compete because there’s nobody willing to eat the risk for everyone else. British banks hate bank transfers because they so often are fraud liable, consumers hate crypto because they are so often fraud liable. Those various payment schemes do have use cases, but it’s hard for them to compete at a grocery store. Moreover, visa/mastercard were able to get big before payments became so important governments. This has a massive advantage in tourism and international payments. India and the EU will never be able to agree on a common payments standard to make SEPA & UPI compatible, for example.
  - whstl 3y ago
    Inside Germany I can get by without Visa/Mastercard, only relying on SEPA transfers (often aided by PayPal) for online purchases and Girocard/EC-Karte on the street. But even inside the EU, as soon as I leave Germany, my Girocard has to magically become a "Maestro" card to be useable.
sofixa 3y ago
PSD2 in the EU solves this with MFA (you have to open your bank app to approve the specific card transaction). > The vast majority of long-distance orders are fraud. I'm calling bullshit on this one. Do you think Amazon, AliExpress, Ebay, Etsy, etc only ship to the city where their warehouse is located and never over any distance?
- crote 3y ago
  Sorry, I should've made that clearer. With "long-distance" I meant cardholder address vs. delivery address. Someone living in NYC (and thus having their card registered in NYC there) is usually going to have it delivered to their home (in NYC) or their office (also NYC, or close to it). Someone living in NYC is very unlikely to order something for delivery in London. The location of the warehouse-of-origin is not relevant here. > PSD2 in the EU solves this with MFA (you have to open your bank app to approve the specific card transaction). Still not solved, unfortunately. With my EU-based credit card it seems to be a coin toss whether it asks for MFA confirmation or not.
  - fragmede 3y ago
    Someone living in NYC is totally unlikely to have family and friends that live in London and is going to send packages to them? There's even a term, NYLon, for people that live a lifestyle that goes between those two specific cities. Without any supporting data, "the vast majority" being fraudulent seems like a wild claim.

by crote 3y ago

jermaustin1 3y ago

I know my data is skewed toward gift giving (I have an Etsy shop), and my sales number are not in the millions or even the thousands (but almost), so take what I say with a grain of salt. Looking at my data, in the last 12 months, only ~60% of my sales go to the person buying the product. I don't have any fraud or refund requests for the last 12 months, so... I'm not sure if "the vast majority" is accurate. Hell, 30% of my Amazon purchases go to family members, or friends. Some in other countries because it is cheaper to buy something on Amazon and have it ship to another country than trying to buy it locally and ship.

whstl 3y ago

> There is zero verification that you are in fact the cardholder This is not entirely true, this is location/bank specific. For my card, I just have to perform additional verification whenever necessary, by using 3D Secure. Currently I authorise or reject from an application. Before smartphones, I had to use a tiny electronic token generator keychain. I remember implementing the technology on software that I worked at in the late 2000s, when it had another name.

crote 3y ago
Yes, which is why I specified "or at least used to work until very recently". We're slowly moving in the right direction. 2FA is available with some credit cards for some transactions, but until it's mandatory for 100% of transactions the problem still remains.
- nottorp 3y ago
  All credit cards in Europe. But with out of Europe stores it's a tossup if they use 3D secure or not.

carlosjobim 3y ago

> The vast majority of long-distance orders are fraud. What? Could you explain further? Almost anything ordered online is long distance.

seabass-labrax 3y ago

The truth is that the chargeback capability of VISA cards is simply insurance in disguise. On a technical basis, bank transfers are already capable of replacing credit card infrastructure, as is digital cash and cryptocurrency for that matter. Most domestic bank transfers involving my current account (UK <-> UK) complete more quickly than the average VISA payment takes to settle. Smartcards for contactless use are now the only thing missing, and only in some countries. Britain, notably, being one of those lacking it :/ I think if banks offered fraud victim insurance for payments made with digital cash, cryptocurrency and electronic cheques as standard (above and beyond that which they are obliged to provide by law, which is often scant), then VISA and MasterCard would practically disappear within the decade. With apologies to anyone in the industry, good riddance ;)

spacebanana7 3y ago
Visa and Mastercard will never disappear. Banks get interchange fees, consumers get chargeback protection and merchants got a stronger final settlement than cheques. The last of those is the most important. Merchants happily ate high fees and chargeback risk in the late 20th century because cards had a lower fraud risk than cheques. No modern payment system can compete because there’s nobody willing to eat the risk for everyone else. British banks hate bank transfers because they so often are fraud liable, consumers hate crypto because they are so often fraud liable. Those various payment schemes do have use cases, but it’s hard for them to compete at a grocery store. Moreover, visa/mastercard were able to get big before payments became so important governments. This has a massive advantage in tourism and international payments. India and the EU will never be able to agree on a common payments standard to make SEPA & UPI compatible, for example.
- whstl 3y ago
  Inside Germany I can get by without Visa/Mastercard, only relying on SEPA transfers (often aided by PayPal) for online purchases and Girocard/EC-Karte on the street. But even inside the EU, as soon as I leave Germany, my Girocard has to magically become a "Maestro" card to be useable.

sofixa 3y ago

PSD2 in the EU solves this with MFA (you have to open your bank app to approve the specific card transaction). > The vast majority of long-distance orders are fraud. I'm calling bullshit on this one. Do you think Amazon, AliExpress, Ebay, Etsy, etc only ship to the city where their warehouse is located and never over any distance?

crote 3y ago
Sorry, I should've made that clearer. With "long-distance" I meant cardholder address vs. delivery address. Someone living in NYC (and thus having their card registered in NYC there) is usually going to have it delivered to their home (in NYC) or their office (also NYC, or close to it). Someone living in NYC is very unlikely to order something for delivery in London. The location of the warehouse-of-origin is not relevant here. > PSD2 in the EU solves this with MFA (you have to open your bank app to approve the specific card transaction). Still not solved, unfortunately. With my EU-based credit card it seems to be a coin toss whether it asks for MFA confirmation or not.
- fragmede 3y ago
  Someone living in NYC is totally unlikely to have family and friends that live in London and is going to send packages to them? There's even a term, NYLon, for people that live a lifestyle that goes between those two specific cities. Without any supporting data, "the vast majority" being fraudulent seems like a wild claim.