In Australia, fees are typically below 1%. e.g., Visa Australia charges .275% to supermarkets and 0% to charities. http://www.visa.com.au/aboutvisa/interchange/interchange.sht...
In the USA, it's typically over 1% (see page 7) https://usa.visa.com/dam/VCOM/download/merchants/Visa-USA-In...
On the other hand, this is why Australia hasn't yet adopted Apple Pay. Apple want the same cut of the total transaction, (I think it's 0.15%) which is more than half of the total fees charged in Australia in most cases.
Perhaps adoption varies by region, or perhaps you haven't tried many places. In the Portland Oregon area, McDonalds, Panera, Subway, and Jamba Juice accept Apple Pay.[1]
signatures are still being retained as "authentication"
Yeah, that's way beyond stupid.
[1] Edit: couldn't resist, thought of this too late. Googling seems non-definitive about whether a certain other fast food place accepts Apple Pay. So I'll steal a line from Vincent Vega and say: "I dunno, I didn't go into Burger King."
If physical card theft is actually a big deal, then NFC would be just as bad. If it's not a problem and fraud comes from copying the information, then EMV is just as good. No?
- NFC reduces risk by limiting transactions to $100.
- EMV is slower (much slower) and more cumbersome due to the requirement that a signature still be collected and the card be inserted into the terminal. This takes a minimum of 15-20s while exchanging receipts etc compared to NFC's ~1s.
NFC has the same level of security while reducing risk and increasing convenience.
I totally agree with you that NFC wins for convenience and speed. I just don't see much of a security advantage, and it looks to me like EMV should substantially reduce in-person fraud, since you won't be able to copy them the way you can copy magnetic stripes. The card companies seem to think this way, at least: the way they're pushing EMV isn't to require it, but simply to say that if you don't have it and you participate in a fraudulent transaction, you're liable for it.
I didn't mention this earlier but NFC payments over $100 generally only require a PIN be entered but this is a relatively (to signatures) painless process and comes with the benefit of requiring something not printed on the credit card.
For small payments, NFC is faster. For large payments, NFC (at least as implemented in Australia, with PIN), is significantly more secure.
It would be interesting to see the breakdown of different types of credit card fraud. How much fraud is physically stolen card versus copied card versus online purchases? I have no real idea myself.
Apple Pay they need to steal my phone, hope I haven't remotely wiped Apple Pay, and know my long passcode or have my fingerprint
Walk into a supermarket/retailer/cinema/restaurant in Melbourne and payment is as simple as waving your card at the terminal. If the purchase is less than ~$100 you don't need to enter a PIN and don't need to sign anything (we outlawed signatures for domestic payments mid last year). It's just done. Visa/Mastercard/banks generally cover any fraudulent purchases using the system so you don't need to worry too much about fraud.
In addition to this, since the US tech companies generally don't appear to have cared about the rest of the world until now, our banks have provided us with contactless payment apps for our phones and unlike the numerous standards being developed in the US, the banks' apps work with the existing payWave/PayPass systems that are already supported.
The reason I'm bringing this up is to show just how behind the US is when it comes to payments. I'm currently living in the Bay Area and the only places I've been able to successfully complete a purchase using a contactless payment method are Office Depot and Whole Foods. Most fast food places don't accept it, most retailers don't accept it, most businesses in general don't accept it. In Melbourne at least nearly everywhere accepts it, from coffee shops to supermarkets to tech retailers.
Even the US's move to EMV is backwards. The country has the second highest credit card fraud rate in the world yet when moving to a "more secure" system, signatures are still being retained as "authentication" or "authorization" despite being literally attached to the back of the card.
The US is fantastic when it comes to technology but when it comes to banking and payments it's incredibly dated and behind.