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Comment by lucideer | Hacker News Reader

Took a trip to the US recently and was astounded at how many places charged my card without any PIN or verification requirements. The seeming normality of service staff taking your card out-of-sight is also unnerving - staff typically don't even lay a finger on your card in Europe. The US is truly in the dark-ages when it comes to payment security.

It seems this is yet another example - didn't even realise US cards didn't have 2FA for online transactions.

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I prefer it. We have good fraud liability laws. If someone steals my card number, it's the bank's problem.

I am a heavy credit card user, and over my lifetime I've only had two instance of unauthorized purchase. Both times, the bank caught it algorithmically and prevented the purchase anyway.

I've had more than that. And I've had random purchases declined for whatever algorithmic fraud reasons. But it's never been a serious problem and these days I make sure I have multiple cards so even if one is declined, I have backup.

> I prefer it. We have good fraud liability laws. If someone steals my card number, it's the bank's problem.

We do too. And much cheaper transaction fees.

Fraud isn't your bank's problem, customers are paying for it.

Fraud rates on credit cards in the US is 10.25 cents per $100

Fraud rates on credit cards in the EU are 3.6 cents per 100 euro

The difference is 6.65 cents/100 which is 0.0665%

So, it isn't fraud losses that explain the difference in processing rates between the US and EU

(numbers from 2019)

https://www.ecb.europa.eu/pub/cardfraud/html/ecb.cardfraudre...

https://nilsonreport.com/upload/content_promo/NilsonReport_I...

You're right, it cannot explain everything, there's a lot more cashback in the US for example, which has to come from the interchange. But the fraud rate doesn't tell us the full picture here, there are indirect costs in dealing with fraud, I'd be more curious about a figure that also estimates externalities.

Anyway the European report is very interesting because it shows that ATM and POS fraud is fairly marginal in Europe, which justifies pushing better SCA mechanisms as the most effective way to reduce fraud.

It's because payment processors basically calculated that people would be less likely to use their credit card if they had the hassle of entering a PIN (or god forbid some rotating code thing!). They're willing to put up with slightly more fraud for the increased CC use, as Americans are much more prone to use their card as a financing vehicle, carrying revolving debt at a usurious interest rate. Every European I know pays their card off every month, so this tactic is much less lucrative; better to increase security in that case.

It is pretty funny when I use my US credit card abroad and the payment terminal spits out a receipt I have to sign. So many confused people on restaurant waitstaff xD

> Every European I know pays their card off every month, so this tactic is much less lucrative; better to increase security in that case.

What do you mean? Credit cards are incredibly rare in European countries, and all that i know of don't have any option outside of paying it in full at the end of the month.

I live in Europe, have two credit cards (& know many people with CCs), and there's no requirement to pay it off each month. Possibly a per-country thing?

Cards that are required to be paid off each month aren't credit cards by definition, because they aren't extending any credit. Those are charge cards.

I can assure you that my American Express is marked as a credit card everywhere, even though it autopays itself automatically at the end of each month.

You may want to review the fine print. AMEX offers both types of card, but "credit card" and "charge card" (sometimes "purchasing card") are meaningful financial terms. AMEX used to offer primarily charge cards back in the day, but they've changed many of their cards to credit cards these days.

It literally says credit card on their website, app and the card itself, so I don't think Amex France care about the distinction.

Does your particular card offer credit as a feature? This is how some of the US cards are, they sort of position the credit feature more like an "option" compared to what other issuers do. Because it is offered at all, it is a credit card, even if you pay the full balance normally.

FWIW, all the cards I see on their French site are described as:

> Une carte de paiement internationale à débit

https://www.americanexpress.com/fr/carte-de-paiement/types-c...

and a search for 'crédit' returns no results.

Don't generalize across Europe based on narrow experience in one or two.

It's easy to see there's a huge variance in people with a credit card. Even the 5% rate in Albania is hardly "incredibly rare": https://www.statista.com/statistics/968220/credit-card-owner...

Picking the lowest EU country on that list (Lithuania, 12%), the first bank I found has a 45 day interest-free credit period, and a 14-17% interest rate if you borrow for longer: https://www.seb.lt/en/private/cards/mastercard-standard

> the hassle

Given the snails-pace rollout of contactless in the US, this seems like conjecture. Paying is much less hassle in Europe in my experience - having to sign paper, waiting for your card to be brought back? This is hassle.

I was sitting at a bar eating lunch when in Vegas for a conference a few years back. The Brit (I think) next to me was suddenly "Why did the bartender just take my card away?" and I had to explain that was how things generally work. You do see wireless terminals now and then today but they're not super common.

Restaurant staff stealing your card info just isn't really a problem here in the US. I'm sure it happens occasionally, but there's just not a whole lot that can be done with it. Online purchases will almost always require address verification, for example.

> The seeming normality of service staff taking your card out-of-sight is also unnerving

You usually don't need to do this anymore though. I think I have eaten out in the US about 15 times this year, and never needed to hand out my credit card. Many restaurants have a QR code on the check that allows you to pay online. Some have credit card terminals on tables (Ziosk). Others let you pay at the register when you leave.

US credit cards don't typically have pins associated with them anyway unfortunately.

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