Dear Linkedin,

Sun Jun 10 22:06:05 UTC 2012

On Sun, Jun 10, 2012 at 04:34:55PM -0400, valdis.kletnieks at vt.edu wrote:
> On Sun, 10 Jun 2012 12:29:46 -0700, Owen DeLong said:
> > It is far preferable for the merchant to request ID and verify that the
> > signature matches the ID _AND_ the picture in the ID matches the customer.
> 
> Maybe from the anti-fraud standpoint, but not necessarily from the merchant's viewpoint.
> 
> It's only better if nobody's standing in line.  If matching the ID
> and signature and picture reduces fraud from 4% to 3%, but increases
> the time to serve the customer by 5%, you're losing money due to
> fewer sales/hour.

For the most part, fraud in a card present transaction isn't eaten by
the merchant.

But the same reasoning still applies.  The card issuers don't want you
have to show ID, becuase you might decide it's too much trouble, and
just use some other method to pay.

Eliminating fraud isn't an objective of card issuers.  Making money is.
Fraud reduction is only done when the savings from the reduced fraud
exceeds both the cost of the fraud preventing measure and any revenue
that is lost because of inconveniencing customers.  And, sometimes,
they'll choose to accept a higher rate of fraud if it will generate
enough revenue to offset it ... consider how many places you can now
avoid signing for small dollar purchases.  The cost of accepting the
additional fraud was considered worth it in comparison to the revenue
generated from getting people to use their cards for small
transactions.

     -- Brett