Re:How I discovered the underground world of credit card net...
by lxgr on Thursday August 03, 2023 @05:20AM
(#36983354)
> serve Y% more customers where Y > X and thus end up with more profit in the long run.
That’s the micro/local view, and any rational company in the US will do something close to that. There is no local incentive to set the “fraud/friction” to anything other than their competitors.
On the macro level though, if the dial is moved for everyone (i.e. by regulation; the card schemes have tried to make this happen via incentives in the form of the liability shift, but it still wasn’t enough), there’s a chance for increased total efficiency.
The cool thing is that Europe is running this experiment currently – let’s see how it goes.
That’s the micro/local view, and any rational company in the US will do something close to that. There is no local incentive to set the “fraud/friction” to anything other than their competitors.
On the macro level though, if the dial is moved for everyone (i.e. by regulation; the card schemes have tried to make this happen via incentives in the form of the liability shift, but it still wasn’t enough), there’s a chance for increased total efficiency.
The cool thing is that Europe is running this experiment currently – let’s see how it goes.