Still Another Attempt to Prevent Credit Card Fraud

This blog entry and response all discusses how the new tech is not enough to battle the issue, but forgets the big point, the way it is today is worse. As security experts say, nothing is secure, but if we can move from level 0 to level 5 maybe someday we have a chance to get to level 10 (being nirvana). Also, about this liability shift from issuers to merchants, for CNP transactions, there is something called Verified by Visa, MasterCard SecureCode...implement this correctly at least most of the chargeback headaches (I didn't say all...) will be taken care of.

ART:

Thanks for the kind words.

I'm not big on self-promotion. Merchant911 membership continues to grow slowly and that's OK. I do it all out-of-pocket in my spare time after a full time job, three e-Commerce sites, and a brick and mortar so it is what it is and will be what it will be.

Yes, I still believe there is strength in numbers, both financially and politically. I'm just not sure what the magic number is. Is it our current strength of 3,750? Is it 5,000? I don't know the answer to that one. And of our current 3750, there are only a few dozen that contribute to the alerts and the forum that are available to members. And then there's my time factor. There's much that I'd like to accomplish yet but limited hours in a day. The blog post above went out at 11:00 PM last night - this comment is being typed before 8:00 AM before I head to my office. Merchant911 and all that goes with it is a full time job that I just don't have the time for. I'll keep on keeping on.

NISH:

I didn't say "useless" I said "dubious, if not down-right worthless." :-)

According to the quoted article, Visa says "If the PIN can be recorded surreptitiously, the card will prove no more secure than its predecessors." This is the case with Chip and PIN cards now so what's really gained with the new technology?

Do I have an answer? No. Truth is, there probably isn't one and maybe that's the point. All the technologies work when things go right but there is always going to be credit card fraud. But I think this initiative smells of marketing hype.

I've publicly stated (on CBS Evening News, National Public Radio and others) that the credit card companies have a revenue stream from chargeback fees and there is no financial incentive for them to to do anything about fraud except move the liability away from the issuers and on to the merchants. Their response has been to call the claim "ludicrous" but they have yet to convince anyone that a half a billion dollars in chargeback fees is anything but a cash cow.

I really don't have anything to add to this piece, but just wanted to first thank you Tom for all your effort on behalf of merchants accepting credit cards. The industry is so screwed up beyond belief it is nice to have a place where ideas and issues can be discussed.

Secondly, I am disappointed to see more people are not making use of this site. I realize most merchants are terribly busy, but it might help if you promoted this forum more in your alerts (or have I been missing something?)

Last but certainly not least, I am very tired of the outrageous fees I am charged, the way chargebacks are handled, and the overall treatment of the merchants by V/MC, etc. AS for the fees, the only thing that makes it a little easier to handle is that I can pay my suppliers by credit card (most of them anyhow) so I manage to get about a percent back, but even still, I'm probably getting hit with higher prices anyhow. Chargebacks ( I get very few as I screen carefully and am in a unique demographic) are handled as if I am guilty until proven innocent, with the burden always on the merchant, and not a lick of investigatory work on the part of the CC co's. I sometimes think this is a profit center for them. Most of the chargebacks could be stopped dead in their tracks if they would bother to pickup the phone. They have a lot of nerve charging $15.00 just become some ahole customer wants to give me a hard time for their misunderstanding.

Anyhow, you at one time seemed to be entertaining the idea that we could possibly band together to get group rates which would be more favorable. Is this still something you are considering?

If I posted this in the wrong place I apologize.

Thanks again.

Art

One-time password is a good option, But how do you say its useless? and what if the key is recorded, anyway its a one-time key right?