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Re:The Fed Is Behind the Capital One/Discover Merger by actionfromafar on Friday February 23, 2024 @07:31AM (#39479740)
So, in other words, fraud insurance is a socialized cost paid by all consumers.

Where's the incentive to minimize fraud though...

Re:The Fed Is Behind the Capital One/Discover Merger by hazmazlaz on Friday February 23, 2024 @08:23AM (#39480244)
The networks have a massive incentive to minimize fraud. That's not to say that they are wildly successful or anything, but I do know from first hand professional experience that card networks spend a lot of time, money, and research into detecting and preventing fraud.
Re:The Fed Is Behind the Capital One/Discover Merger by vundercind on Friday February 23, 2024 @08:48AM (#39480510)
- Payment networks drop accounts with a too-high fraud rate.

- They and similar businesses (e.g. Stripe) offer automated tools to deal with fraud… for a price.

Outcome: the incentive to minimize fraud, which is often a result of crap security from the payment network, is on merchants, who also get charged extra protection money to get payment networks to do stuff they ought to be doing in the first place.

Re:The Fed Is Behind the Capital One/Discover Merger by vikingerik on Friday February 23, 2024 @10:20AM (#39481632)
Ultimately, that incentive is the legal system, which can legislate against allowing fraud and forcefully impose penalties for it. (And operating it is a socialized cost, such that your first sentence is still correct.)