Interesting links and notes on updates to my main website.
[to search, use Blogger search in top bar]
Sunday, November 02, 2008
credit card companies use chip cards to gouge retailers and shift liability
Ah yes, the new credit cards with chips, so super-duper secure.
Nice little bit of security theatre there.
Theatre aside the reality of the new chip card is:
1. The need to enter a PIN number means you can no longer sit at your restaurant table and sign some bill that disappears off somewhere. The retailer either has to get a wireless payment unit (which they get charged some outrageous fee for, like $200 a month), or everyone has to troop up to the front desk to pay.
2. The super-duper-high-security of entering a PIN number is giving the credit card companies an excuse to move from their current position where you have zero liability for any unauthorized credit card purchases (e.g. from stolen card) to new improved position where you, the consumer, are 100% liable for purchases made by thieves and fraudsters with your card.
Also, and for the first time ever, I wasn't able to complete a credit card transaction yesterday because the machine didn't accept my PIN, it wasn't clear if it was reading the card correctly or what the problem was. Tried 3 times and same problem each time.
As a bonus, because the above two don't screw over people and retailers enough, the new "Infinity" cards have added features that are funded by... charging the retailers a higher transaction fee. (Note: retailers are not allowed to either refuse to accept the cards, or pass the transaction percentage along to consumers.)
So keep in mind that in exchange for the convenience of using your credit card (and I will admit I use mine for almost all transactions) you introduce a substantial transaction cost into the economy, because of the percentage that the card companies skim off of retailers both for each transaction, and for the associated equipment.
New credit cards - The Toronto Star - November 2, 2008
Retailers urge action on credit card fees - The Toronto Star - September 11, 2008