I agree, as an European not used to dealing with them before the Internet, the system is just inane nowadays. "Just give these numbers to each and every merchant you do business with, and trust they won't abuse or leak them. Remember that you have to check each and every transaction to make sure it's not fraudulent, and have fun paying higher prices because merchants get hit with billions in fraud every year".
Our system of direct debit, where the client had (the rules might have changed recently) to authorize each merchant to charge your account, is much saner, even if some providers whine about it.
Protip: if your clients can't be bothered to spend 2 minutes authorizing your charges, you're not providing enough value to them.
The US system of authenticating the transaction vs the card/user seems to work pretty well. The US rapidly adopted online commerce and payment. Consumers, overall, have nothing to worry about. Since the merchants and banks are responsible for fraud on credit cards, they seem to be a bit more on to of things.
N=1, but with Wells Fargo, my credit card gets blocked now and then due to suspected fraud. Once it was due to a cloned card being used. Bit of an annoyance getting a new card (they're no Amex, who'd always overnight me a card, no matter where I was), but otherwise I had zero financial worry. Compare to my debit card. Not one have I even revived a warning about it, let alone a block. Even when I gave it to someone to use and take cash out on in another country.
EU and others seem to be rushing to implement strong auth, but as a consumer, screw that. Use machine learning and law enforcement to deal with it and let my experiences be unencumbered. Spending 2 minutes to authorize merchants seems like a large annoyance.
Since the merchants and banks are responsible for fraud on credit cards, they seem to be a bit more on to of things.
But are they?
"Total global payment-card fraud losses were $11.3 billion in 2012, up nearly 15% from the prior year. The United States—the only country in which counterfeit-card fraud is consistently growing—accounted for 47% of that amount, according to the Nilson Report: card issuers lost $3.4 billion and merchants another $1.9 billion."
This kind of inefficiency doesn't come cheap. There's a reason why VISA and Mastercard disallowed merchants to charge more for CC transactions.
EU and others seem to be rushing to implement strong auth, but as a consumer, screw that. Use machine learning and law enforcement to deal with it and let my experiences be unencumbered. Spending 2 minutes to authorize merchants seems like a large annoyance.
How is having your card blocked and having to wait days to receive it not being encumbered?
As for the debit card thing, that wasn't what I was talking about. I was talking about remote payments, where we use direct debit, not debit cards.
11 billion on what, 5-6 trillion in spending? So ~0.2%? In don't find that particularly terrible at all, in the slightest.
I've only had to replace my VISA card once in perhaps ten years, so overall it's not been an issue.
For direct debit, I get even more nervous. Now someone that's compromised my phone/PC or whatever I'm using can make difficult-to-reverse transactions?
Our system of direct debit, where the client had (the rules might have changed recently) to authorize each merchant to charge your account, is much saner, even if some providers whine about it.
Protip: if your clients can't be bothered to spend 2 minutes authorizing your charges, you're not providing enough value to them.