CVV (was: Re: bloomberg on supermicro: sky is falling)

Thu Nov 8 09:34:33 UTC 2018

On 8/Nov/18 11:16, George Michaelson wrote:

> There are two parts of the problem. The first is the assumption of
> risk: the current model of operation in the US (like in other western
> economies) puts the onus of risk of misuse of the card on specific
> actors. When you change the basis from signature (fraud) to chip+pin
> (leak of knowledge) you have to change the legal basis. Remember, this
> is an economy where WRITING CHEQUES is still normal. Clearly, the
> legal basis of money transactions in the US is hugely complicated by
> savings and loan, credit unions, banks, state and federal law, taxes.
> We all have some of this worldwide, they have a LOT.
>
> Secondly, the cost basis. Who pays? In most of the world the regulator
> forced cost onto specific players because they could, and forced
> people to tool up because they could. But, the costs did have to get
> met. Some people paid more than others. In the US, for reasons not
> entirely unlike the first set, *making* people do things with cost
> incursion is remarkably difficult. Making the Walmart brothers re-fit
> every terminal, when they can go down to DC and buy votes to stop it
> happening, Making Bank of America spend money re-working its core
> finance models to suit online chip+pin when it can go down to Walmart
> and lean on the owners to go down to DC and buy votes...
>
> Seriously: Its not lack of clue. Its lack of intestinal political
> fortitude, and a very strange regulatory and federal/state model.

Shame, but I can see how this makes sense as to why things are the way
they are.

Speaking of "cost" as a motivator, in South Africa, most of the banks
are now using extra fees as a way to force users to do their banking
online (phone, laptop, app, e.t.c.). If you want to walk into a bank to
deposit money, withdraw money, make a transfer, e.t.c., you pay for that
service over and above, while the process costs you zero (0) when done
online. This has led to banks now renovating banking halls into where
there was once 23 tellers, you now have 1 service usher, 1 teller, 2
support agents and 20 self-service computers.

I hope the U.S. does catch-up. If we were swipe-based here, we'd all be
broke :-). I know a number of major merchants in the U.S. now use PIN's,
and I always stick to those when I travel there.

Mark.