>>No, card fraud rates are in the 5-20 basis point range (0.05%-0.2%).
Depends on the "total pool" you're drawing from, and whether you're counting money, or transactions. The 5-20 basis points fits if you include, for example, all ATM withdrawals.
You get close to the 1% claimed in the parent if you count just "online card transactions", and count revenue instead of number of transactions.
Because in some places the fees are set by legislation. For instance in the EU the fees are so low that credit card companies are forced to combat fraud or they lose money.
For example, from the Fed: "By number, the fraud rate for general-purpose cards was 3.60 basis points (3.60 unauthorized transactions per 10,000 transactions) and by value the fraud rate was 8.27 basis points."
I should clarify, I was only talking about online payments, which I know a lot better than physical transactions.
From talking to some acquiring banks, I gathered that 1%-1.5% was the maximum fraud rate they would tolerate, depending on the value of your account. With fraud rates like that, you will not see volume discounts anytime soon either.
I wish people and broadcasters would stop using "basis points" and "three tenths of one percent".
Both of them are and sound ridiculous. As the above comment illustrates, are pointless because either people have to do the math to understand what the hell you are saying or you have to spell it out.
Not saying anything at all about the content or merit of your post, you, your family, neighbors, cousins, dogs or cats. Just saying this "financial" language is, well, kinda silly.
Some TV news anchors would have said: "five one-hundreds of one percent to two tenths of one percent". Or "half a tenth of one percent".
I hear you. I put both since I know the in-the-biz term, basis points, isn't universally understood. I feel like % can be confusing because 0.05 is 5% so putting 0.5% might not always be immediately understood.
My pet peeve is "quarter of a billion" to try to make the number sound bigger.
I guess my point may have been lost. There is no need to learn a new term. "1%" is read "one percent". "0.5%" is read "zero point five percent" or, shorthand, "point five percent".
How did we get from "zero point five percent", which is the literal value, to "one half of one percent", which imposes a cognitive load?
Or, better yet, why "one half of one percent" and not "half a percent"
It's like reading the number "1" as "one-hundredth of one hundred", or "10" as "one tenth of one hundred".
Question: Do they do the same in Europe? I must admit, I've been there tons of times but never paid attention to this (probably because I never watched enough TV while there). Of course, in Europe (and the rest of the world, as far as I know) it's "comma" not "point".
I can understand the use of basis points in some financial circles as a term of trade or convenient insider's unit. I don't understand it when used to communicate with the public. Go out there and ask a random sampling of people what a basis point is. I'll bet very few will say "0.01%", even if they own stocks.
Depends on the "total pool" you're drawing from, and whether you're counting money, or transactions. The 5-20 basis points fits if you include, for example, all ATM withdrawals.
You get close to the 1% claimed in the parent if you count just "online card transactions", and count revenue instead of number of transactions.