Comment by jrnvs
3 years ago
I doubt it. The current system is a local optimum. Better local optimums already exist elsewhere.
In The Netherlands, direct online payments using debit cards are very common. These are secure payments, verified through a bank’s mobile banking app or internet banking with 2FA.
https://en.m.wikipedia.org/wiki/IDEAL
This means there is no risk for the seller that a payment gets reversed. There is fraud, but it centers mostly on social engineering people to authorise payments for others, or to mail their debit card to “the bank” for “recycling”.
Cost per payment: about 30 cents.
Meanwhile, in other countries, credit cards are the common online payment option. Security? A number on the front of the card and a “secret” second number on the back of the card.
Cost: 1.5-3.5% of payment.
Better security is possible, but it’s hard to move from a local optimum when you’re locked into a certain ecosystem.
The credit card no-security scheme works because everyone gets reimbursed for fraud. It comes at the cost of retailers handing a few percent of every transaction to intermediaries, instead of just a few pennies.
At some point (maybe already) we will perform 50% of GDP online. That makes the Visa network essentially a seperate private tax collecting entity. I get the "local optimum" - it's hard to break. But if anything motivates governments it's competition