The New York Times writes The Card Game - How Visa, Using Fees Behind Its Debit Card, Dominates a Market
"When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.
The difference is so large that Costco will not allow you to sign for your debit purchase in its checkout lines. Wal-Mart and Home Depot steer customers to use a PIN, the debit card norm outside the United States.
Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud.
How this came to be is largely a result of a successful if controversial strategy hatched decades ago by Visa, the dominant payment network for credit and debit cards. It is an approach that has benefited Visa and the nation’s banks at the expense of merchants and, some argue, consumers."
1 comment:
So much about the way consumers are forced to pay for items with plastic baffles me.
Why don't credit cards use a PIN? Wouldn't that virtually eliminate card-in-hand based credit card fraud? Sure you can steal my cards, but you ain't getting my PIN.
Why is it that a signature on the back of a card means ANYTHING? It's not a binding document. It hasn't been notarized with a witness. Writing on a piece of plastic makes your signature virtually illegible anyways. All my cards say "Ask for ID" instead of showing a signature. This works quite well as even some vendors who know me (like the guy at the Rockler store) will still ask. Yet the Post OFfice will simply refuse to accept my card, because it isn't signed. Despite the fact that I can pay to send a package with the same card in their automated mailing machines.
Why is it that many large vendors (Target, Home Depot...) no longer ask you to sign your receipt when the purchase is under $50? Isn't that just inviting MORE fraud? As if the signature is of any use anyways?
Why is it that all of a sudden, when you swipe your card, a message pops up saying "use as a debit card?" ? What the hell is that anyways?
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