How? By paying higher APRs for their credit cards? It's a competitive market. If companies are going to guard their margins by passing fraud costs to users, the companies that do a better job of mitigating fraud will capture market share by offering lower rates.
I submit that that hasn't happened because financial institutions don't in fact pass these costs straight back to consumers.
Really? I think it's more subtle - fraud detection is big business (Palantir et al) and presumably companies have to find a cost / benefit compromise between building their own solutions vs. contracting it out to experts. It might well end up cheaper and easier to add a .5% APR penalty to all their customers and take the hit on retention; it's not THAT competitive out there (at least here in the UK) IMO.
Plus, even though credit card companies compete individually, as an industry they all have a strong incentive to work together to prevent fraud. Loss of trust in Visa/Mastercard as a brand would be catastrophic to all issuing banks.
> as an industry they all have a strong incentive to work together to prevent fraud.
Do they? It looks to me like the industry has treated the fraud problem (which they created) as an opportunity to sell more services (credit monitoring, fraud protection, etc.) without addressing the security problems with their antiquated technology.
Lots of different cards! Blue ones, red ones, green ones, silver ones, ones with kittens on them, ones with a picture of my choosing. None of them have much in the way of material differences though.
I submit that that hasn't happened because financial institutions don't in fact pass these costs straight back to consumers.