Comment by tfehring
3 years ago
An analogy that may resonate with readers here is that targeting zero fraud is like targeting 100% uptime in a computer system. You evaluate the business trade-offs and decide how many 9s of non-fraud are appropriate, knowing that (1) each additional 9 is more expensive than the last but only gives you 1/10 of the benefit, and therefore (2) infinity 9s (equivalent to zero fraud/100% uptime) is a useless aspiration for all practical purposes.
That's incomplete, though. The business running the computer system would bear all the costs in attempting to target 100% uptime.
Targeting zero payments fraud does mean the business has to bear the costs of the fraud prevention measures, but their customers also have to bear intangible costs, like the annoyance of a detailed, invasive know-your-customer process before being able to buy anything.
But if I'm a user of this computer system that targets 100% uptime, I don't have to see any of the downsides/costs that the business incurs to try to get that uptime. I just see great uptime, and it's all rosy for me.
I think it's important to acknowledge that, in pursuing lower (or zero) fraud, both the business and its customers have to bear costs related to that goal.