[derefr]

Credit card companies already have the perfect "security" measure: retroactive limited liability for stolen cards. Nobody loses money because someone steals their credit card.

As such, everything the card companies do in the name of "security" is not to prevent people from losing money—they don't need to solve that problem. They just need to solve the perception people have that credit cards are insecure. In other words, all credit card security (yes, even chip-and-pin) is security theatre. Whether it works or not, it's not there to work; it's there to feel good.

[ufmace]

> Credit card companies already have the perfect "security" measure: retroactive limited liability for stolen cards. Nobody loses money because someone steals their credit card.

100% on that. Money is lost all the time, but thanks to that retroactive liability, the bank and/or merchant loses it instead of the consumer. Security for the consumer is already as good as it could possibly get, so they're really saving themselves and their merchants. This is a good thing, because they have a much more direct incentive to save themselves money than to save you money.

[dragonwriter]

The cost of limited consumer liability for stolen cards is spread across all consumers in other card fees (perhaps hidden ultimately in network/merchant fees, and thus spread further in consumer prices.)

In a competitive credit card market (which we may not really have, but that's a different problem) an issuer reducing the incidence of lost would be able to compete better by either lowering charges or providing greater benefits while making the same profit, forcing other issuers to match those features or be driven out of the market.