Quote:
Originally Posted by charlie1
So I was employed by a large credit card issuer. Let me tell you, they would love to FORCE the merchants to adopt new equipment and systems that are more secure. Our company budgetted close to 2% of credit card sales to loss, i.e. to cover fraudulent transactions, card replacements, etc. This is one reason the credit card fees are so high (3% average). Anyway, there have been lots of solutions presented but it required changes in software, equipment, and procedures for the merchant. An example, when I was there, we tried extremely hard to get PIN and Chip technology implemented on credit cards. The merchant would do the CHIP only as long as they had several years to still use the magnetic stripe but would not even consider the PIN. This was the standard in Europe at the time and helped immensely. So, the credit card company started to implement only the chip in the cards. This added no or very little additional security. Here we are 10+ years later and most merchants still have not gone the next steps. Some still require card swipes and do not use the chip! All the merchants did was complain about the fees and would do very little to reduce fraud! Don't put ALL the blame on the credit card companies, there is a lot to go around with all parties involved!
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"Budgeted 2% to loss." That is accounting, interest on credit cards is like 20%. Losses due to fraud, based on experience the credit card companies decide it is cheaper to accept the losses rather than pursue CRIMINALS.
No one has mentioned it. The reason why the credit card companies notify the card holder of suspicious charges is because the risk is with the credit card issuer-not the card holder.
Like any other business, if it was not profitable there would not be so many issuing cards.