[JumpCrisscross]

> Chip + Signature is a dumb USian thing because merchants didn't want to change their readers to have a secure PIN pad

Americans don't want to punch in a PIN. We have more cards per capita and are habituated to the convenience of a swipe. (Unlike much to the world, our fraud risk sits almost entirely on the merchant side.)

Contactless had no hope with a PIN. Merchants catered to that despite higher cost and risk.

[messe]

> Contactless had no hope with a PIN

I’m not sure if it’s true for all EU countries and banks, but in general you don’t put in your PIN every time with contactless. The card usually works for a number of transactions without a PIN, often up to a certain limit, after which it asks you to insert it again.

[JumpCrisscross]

> in general you don’t put in your PIN every time with contactless

As an American, I never get prompted in Europe for a PIN. Even for large transactions. That matches a swipe's convenience.

[djxfade]

I believe this is controlled by your issuer. So your card issuer probably don't require PIN after n amount of swipes.

[matthewdgreen]

It is arbitrary and random. Some machines will ask for it and others won’t. Some automated machines will refuse US cards altogether. Wait til you’re at a tollbooth entering the Autoroute trying to use all your US cards, and none of them are accepted.

[messe]

Even Visa/MasterCard?

[neilalexander]

> Americans don't want to punch in a PIN. We have more cards per capita and are habituated to the convenience of a swipe.

When Chip + PIN was introduced in the UK in 2003, people were widely concerned about the potential for inconvenience (entering a PIN takes longer than a swipe, the transaction might take longer to be processed, you might forget the PIN altogether).

In reality, fear outweighed the reality, the world carried on as usual and people adapted very quickly. It's now just totally normal here to enter a PIN and the average British person would feel far more inconvenienced if asked to sign for a transaction instead (which has become such a rare event here that the average person would be completely taken by surprise if asked to do so).

[rswail]

Unlike most of the world, where when a Chip+PIN or contactless payment is made, where the risk is transferred from the merchant to the acquirer/issuer.

That was the whole point of moving to EMV, it removes the fraud risk from the merchant.

That's different to the charge-back risk, which is where the customer disputes the transaction itself.

[JumpCrisscross]

> where when a Chip+PIN or contactless payment is made, where the risk is transferred from the merchant to the acquirer/issuer

In parts of the world where the consumer's bank bears the risk, and there is in imbalance between commercial and consumer banking, there is a powerful group--consumer banks--to apply pressure.

Sometimes that results in fewer consumer protections. In most: indirect pressure on merchants. (I can think of no country with an imbalance in favor of commercial banking with a strong consumer sector.) This state describes most of the world: optimized for cost reduction.

> That was the whole point of moving to EMV, it removes the fraud risk from the merchant

Who bears fraud risk varies.

In America, it was always the merchants. They have limited leverage over Visa and Mastercard. With the banks neutral and a valid competitor in American Express, there was nobody who wanted to anger consumers by taking away their swipes. (If you're that merchant, you're cash only.) So they optimized for purchasing convenience.

Australia is a cost optimizer. America a convenience optimizer.

[rswail]

I'd argue the opposite. In the US, the merchants had too much power to delay the introduction of Chip+PIN readers.

The fraud of magstripes was huge, because there was literally no security. Anyone could create a magstripe. Customers using credit cards in the US are protected by legislation against that fraud.

The whole point of EMV was to remove the capability of fraud by replicating the magstripe. It meant that the transaction could correctly tell between "card present" and "card not present" transactions. So the risk of card-present transactions is dramatically lowered, independent of who is responsible for the fraud.

It is to both the merchants and the banks benefit to reduce/remove fraud. The banks offloaded it to the merchants in the US (as they did in other countries), but the introduction of EMV was "sold" to the merchants in the rest of the world by the banks saying they would take on the risk of fraud for "card present" transactions.

The banks were never "neutral" in the US. Visa/MC were both bank consortiums.

America is not a "convenience optimizer" its a "changing consumer behavior is hard so lets not do it" optimizer.

[JumpCrisscross]

> In the US, the merchants had too much power to delay the introduction of Chip+PIN readers

Merchants had more power, but the ultimate deciders were consumers, who have not only a choice in merchants but a choice in cards.

> the risk of card-present transactions is dramatically lowered, independent of who is responsible for the fraud

Nobody cares if business goes down more than the fraud costs.

> Visa/MC were both bank consortiums

This is wrong. American Express is bank-like because it owns its own credit book. Visa and MasterCard are payment processors. They are publicly traded and not bank consortiums. This is crucial to understanding the power dynamic: the payment processors do not take diktats from the banks.

> America is not a "convenience optimizer" its a "changing consumer behavior is hard so lets not do it" optimizer

Sure. Friction avoided for not being worth the trouble is optimising for convenience.

I can personally tell you that had a card gone chip + PIN mandatory, I’d have dropped it, and if a merchant started requiring special payment requirements I’d expect compensation for the trouble. Many merchants, notably Starbucks, did this, but it could never go mainstream. And unlike countries where consumer banks were incentivised to lobby for reforms, that political will to override the public’s preferences couldn’t exist here.

[rswail]

Both Visa and Mastercard started out as companies that were owned by a consortium of banks.

"By 1970, BofA gave up direct control of the BankAmericard program, forming a cooperative with the other various BankAmericard issuer banks to take over its management. It was then renamed Visa in 1976."

Both Visa and Mastercard mandated upgrades to merchant terminals in the non-US world. For example, in Australia, as of 1 August 2014, Chip+PIN was required.

That upgrade has been delayed repeatedly in the US because of pushback from the merchants that don't want to upgrade their terminals. It has nothing to do with the consumers.

Visa in the US states: "When you upgrade to chip technology, you continue to be protected from counterfeit fraud losses. As of October 1, 2015, businesses that don’t accept Visa chip card transactions may be responsible for any resulting counterfeit fraud. Similarly, effective April 17, 2021, Visa transactions made at ATMs and Automated Fuel Dispensers (AFDs) will be included in the Liability Shift Policy."

In the US however, they continue to support signatures, which have been removed pretty much every where else:

"No. Visa continues to support a range of cardholder verification methods (CVMs) including signature, online PIN, and no-signature for low-value, low-risk transactions. Visa will maintain interoperability across those methods with technical standards, business rules, and compliance programs."

https://usa.visa.com/run-your-business/small-business-tools/...