[gruntledfangler]

> Why don't the banks care? Because they treat the cost of fraud as just another cost of doing business, and they pass it along to you, the consumer. And they do it in a diabolical, stealthy way that you don't notice. But that's another story.

Desire to know more intensifies

[lisper]

See https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...

That's actually the start of a multi-part series:

https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...

https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...

https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...

https://blog.rongarret.info/2013/03/cutting-to-chase-repeal-...

https://blog.rongarret.info/2013/03/a-simple-solution-to-cre...

Keep in mind all that was written twelve years ago and the world has changed a lot since then.

[mritchie712]

> So why hasn't it been done?

The answer is simpler: it's not that big of a problem to the people that would need to solve it (visa, banks)

Yes, it' billions of dollars per year, but that's on a denominator of trillions.

> In 2022, global payment card transaction volume surpassed $40 trillion, with the U.S. accounting for over $9.5 trillion 1 . If we consider the $5 billion in unauthorized purchases reported by Security.org 2 , the percentage of fraudulent transactions in the U.S. would be approximately 0.05%.

1 - https://docs.google.com/document/d/1tudQcmL8lNH49iZZ8wRB88KW...

[lisper]

> it's not that big of a problem to the people that would need to solve it

That's not wrong, but it misses the point. It's not worth the bank's time to solve it, but for me it would produce a pretty damn good ROI. All I needed was one entry point into the system, but I couldn't find it.

[mritchie712]

why is this surprising? If they didn't pass the cost of fraud along, they'd all go out of business.

The interchange rate on credit cards is high, but "diabolical" is a stretch.

Also, fraud is a very small line item in a credit card P&L. Generally 25bps to 50bps vs credit charge offs which are closer to 3% to 6%.

Source: Ran risk for Bank of America and a credit card fintech.

[jackthetab]

In the past, my knee-jerk reaction would have been "Yes, exactly!" Then I heard patio11's podcast on debanking[1]. It gave me some interesting views into fraud and compliance and $STUFF. Highly recommended.

[1] https://www.complexsystemspodcast.com/episodes/debanking-pat...

[jocaal]

It's been a while since I read this article, but I remembered the title and it seems to imply that it is relevant

https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...