Comment by ajmurmann
2 years ago
The credit card company and indirectly the vendors carry much off the cost of fraud. The credit card company spends a lot of resources on preventing this fraud. Introducing a proper solution for online payments would allow them to reduce costs and offer better deals to vendors and consumers. They also are the only participant in this who is a individual participant rather than a group. It seems like this is the ideal setup for credit card companies to introduce innovative solutions. They have the incentive and the leverage, yet it's not happening. What am I missing?
You are missing that the credit card companies want less transaction friction. If they wanted security we would have chip + pin in the US like the rest of the world. Charging volume overrides everything. Interest rates and those that carry a balance more than make up for fraud losses.