$12M stolen from 1,400 convenience store ATMs across Japan in 2 hours

Re:$12M stolen from 1,400 convenience store ATMs across Japa... by superuser2 on Sunday May 22, 2016 @01:22PM (#11749385)

Interchange fees are set based (in large part) on how much fraud the processor expects to deal with. This is why interchange fees are lower for card-present than card-not-present transactions, and higher in business categories that tend to have more fraud.

A processor does not charge lower fees for chip cards in a vacuum, they do it because they expect to eat less fraud from chip cards.

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Re:$12M stolen from 1,400 convenience store ATMs across Japa... by jessriedel on Sunday May 22, 2016 @02:07PM (#11749577)

Oh, I understand what you're claiming now. But I don't think the effect your describing is very important. As colechristensen points out, the fees in the US are 5-20 times larger while their fraud rate is only about twice. So it looks like other factors (e.g. degree of regulation, monopsony effects, etc.) have a much larger influence on interchange fees than fraud rates. Indeed, the amount lost from fraud is only about 0.1% of transactions in the US, and 0.05% in the EU.

http://www.paymentscardsandmobile.com/wp-content/uploads/201...

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