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Transaction volume is a poor way to measure the problem. I might use my card 1,000 times before getting hacked and having to replace my card. It's not a .01% lo

• cynwoody 13y ago
  The consumer is almost always made whole in fraud incidents. For the consumer, it's mainly the pain in the ass factor. Which is not insignificant!
  • fragsworth 13y ago
    > The consumer is almost always made whole in fraud incidents. By the collective money of other consumers...
    • cynwoody 13y ago
      Who ultimately bears the loss is a complicated microeconomic question, which depends on price elasticities and the like. At one extreme, the payment industry and the merchants could end up eating the entire loss in the form of lower profits. At the other extreme, the entire loss might fall on consumers in the form of higher prices for goods and services. In reality, some of the loss will be born by producers (i.e., stock holders) and some by consumers. The only thing that is clear is that a 7 bp fraud rate means the economy as a whole loses $7 for every $10,000 transacted.