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Bitcoin => Bitcoin Discussion => Topic started by: Kris on October 22, 2012, 06:57:01 AM



Title: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Kris on October 22, 2012, 06:57:01 AM
If the chip doesn't work on the payment card, the consumer in the future pays a fee of $1.31 dollars!

http://multimedia.ekstrabladet.dk/archive/00851/kreditkort_dankorta_851736m.jpg

The chip doesn't not work. Try the magnetic strip. Most people know the problem with credit card chips, which fails because the store terminal is broken, or because the card is worn and dirty.

But now consumers are punished with a fine of $1.31 dollars, every time they are forced to use the magnetic stripe instead of the smaller and more secure chips on MasterCard, Eurocard and Visa credit card (not Visa / MasterCard)

Damn......

Now even more incentive to use WalletBit, Bitcoin and our upcoming Point of Sale system.

Point of Sale - WalletBit
https://bitcointalk.org/index.php?topic=118419.0


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: BitPay Business Solutions on October 22, 2012, 07:02:01 AM
in the US we don't have any smart chips, yet.  everything is magnetic stripe.  we are way behind the Europeans in this regard.

But still, forcing the customer to pay because the network technology doesn't work is pretty outrageous!

this seems like an extra tax on Americans traveling abroad?




Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Kris on October 22, 2012, 07:04:05 AM
in the US we don't have any smart chips, yet.  everything is magnetic stripe.  we are way behind the Europeans in this regard.

But still, forcing the customer to pay because the network technology doesn't work is pretty outrageous!

this seems like an extra tax on Americans traveling abroad?

It would be yes, and it is Robbery In Plain Sight

This won't do... We really need to push Bitcoin POS even more.


Source translated to english.

http://translate.google.dk/translate?sl=da&tl=en&js=n&prev=_t&hl=da&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.dr.dk%2FNyheder%2FIndland%2F2012%2F10%2F21%2F234124.htm%3Frss%3Dtrue


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Luke-Jr on October 22, 2012, 07:21:39 AM
in the US we don't have any smart chips, yet.
Citi does, FWIW.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Mike Hearn on October 22, 2012, 08:02:36 AM
Do you have a  link for that? It'd be interesting to know the back story here. I couldn't find any references to such a fee with a few quick searches.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Kris on October 22, 2012, 09:28:34 AM
Do you have a  link for that? It'd be interesting to know the back story here. I couldn't find any references to such a fee with a few quick searches.

Source translated to english.

http://translate.google.dk/translate?sl=da&tl=en&js=n&prev=_t&hl=da&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.dr.dk%2FNyheder%2FIndland%2F2012%2F10%2F21%2F234124.htm%3Frss%3Dtrue


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: DublinBrian on October 22, 2012, 01:59:33 PM
this seems like an extra tax on Americans traveling abroad?
Ive heard that Visa & Mastercard have 97% market share of the european card payments market, which essentially amounts to US tax of 3% on europeans in europe, on every penny we spend!  :-\

Bitcoin will free us all from this tyranny!


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: matmar10 on October 22, 2012, 02:31:46 PM
this seems like an extra tax on Americans traveling abroad?
Ive heard that Visa & Mastercard have 97% market share of the european card payments market, which essentially amounts to an american tax of 3% on europeans in europe, on every penny we spend!  :-\

Bitcoin will free us all from this tyranny!

The 3% doesn't go to VISA and MasterCard -- it's split between multiple parties. There's a merchant acquirer (sometimes multiple), the network (VISA or MC), and the issuing bank. In the end, only a small fractional percentage (10 basis points) actually goes to the network. http://www.transactionworld.net/articles/2008/February/commonGround1.asp

The merchant acquirers and issuing banks are domiciled in the EU, so the bulk of that transaction fee money is going into the EU economy.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: matmar10 on October 22, 2012, 02:37:26 PM
in the US we don't have any smart chips, yet.
Citi does, FWIW.

It's true that some issuers are beginning to produce plastic with Chip+PIN (EMV) capability. However, to take advantage of the security, you need acceptance locations that are EMV-capable.

It will be years before the US catches up to Europe with EMV. The US was initially terminal-ized as an "online-only" mode where terminals always connect up to the server to get an authorization. Back in the day, most of the EU was "offline" mode where the balance counter inside the plastic itself would decrement each time you made a purchase until it finally went "online" at some point (usually at an ATM) to synchronize the balance; hence the PIN challenge was necessary to prove that you were the authorized cardholder, since if the card was stolen and "STATUSED" (marked as stolen) the offline terminals would have no way of knowing.

Anyway EMV is much more secure from a consumer perspective, but penalizing people who don't use EMV is nuts. Plus, us poor sobs in the USA are all carrying magstripe-only cards and it will majorly suck when we travel to the EU trying to use our cards. It's come a long way, though. I remember less than 10 years ago in Denmark my magstripe didn't work anywhere except ATMs even though most payment network rules require you to accept magstripe as a fallback.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: knight22 on October 22, 2012, 02:38:31 PM
But still, forcing the customer to pay because the network technology doesn't work is pretty outrageous!

this seems like an extra tax on Americans traveling abroad?
It would be yes, and it is Robbery In Plain Sight

That's why we should screw banks! (http://screwbanks.net/)


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: DublinBrian on October 22, 2012, 03:00:41 PM
The 3% doesn't go to VISA and MasterCard -- it's split between multiple parties. There's a merchant acquirer (sometimes multiple), the network (VISA or MC), and the issuing bank. In the end, only a small fractional percentage (10 basis points) actually goes to the network. http://www.transactionworld.net/articles/2008/February/commonGround1.asp

The merchant acquirers and issuing banks are domiciled in the EU, so the bulk of that transaction fee money is going into the EU economy.
Thanks for that information. You obviously are a lot more knowledgeable than me on this. But here in Ireland, we had our own domestically owned card payment system called "Laser". Merchants paid a flat €0.15 per swipe.

In 2011 all the irish banks dumped Laser and switched to either Visa or Mastercard. Now merchants pay 3% of the sale.

I find it hard to understand how the card issuer was able to charge only €0.15 per swipe on the irish system, but now charges 1.95% on the american system, according to the document you linked to.




Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: matmar10 on October 22, 2012, 03:08:02 PM
The 3% doesn't go to VISA and MasterCard -- it's split between multiple parties. There's a merchant acquirer (sometimes multiple), the network (VISA or MC), and the issuing bank. In the end, only a small fractional percentage (10 basis points) actually goes to the network. http://www.transactionworld.net/articles/2008/February/commonGround1.asp

The merchant acquirers and issuing banks are domiciled in the EU, so the bulk of that transaction fee money is going into the EU economy.
Thanks for that information. You obviously are a lot more knowledgeable than me on this. But here in Ireland, we had our own domestically owned card payment system called "Laser". Merchants paid a flat €0.15 per swipe.

In 2011 all the irish banks dumped Laser and switched to either Visa or Mastercard. Now merchants pay 3% of the sale.

I find it hard to understand how the card issuer was able to charge only €0.15 per swipe on the irish system, but now charges 1.95% on the american system, according to the document you linked to.

Wow! That's really interesting. I'd never heard of Laser until now. It seems ultimately the issuers just wanted to take more per transaction, hence switching away from the Laser scheme. The Wiki article I read on Laser said it as initially set up as a non-profit and managed by the biggest issuing bank. I guess it's no surprise they moved towards a payment scheme where they can take more of the action, for better or for worse.

I guess what's more surprising is that Merchants weren't more up-in-arms about the higher fees. Do merchants typically pass along the fee to customers? Or maybe merchants just started demanding cash?


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: DublinBrian on October 22, 2012, 03:20:08 PM
I'd never heard of Laser until now. It seems ultimately the issuers just wanted to take more per transaction, hence switching away from the Laser scheme. The Wiki article I read on Laser said it as initially set up as a non-profit and managed by the biggest issuing bank. I guess it's no surprise they moved towards a payment scheme where they can take more of the action, for better or for worse.
Yes, thats probably it. The issuing banks saw an opportunity to make more profits by switching. All the banks here are broke since the property bubble popped and they are desperately trying to find new revenue streams. In addition to the 3% most banks are now starting to charge €0.20 per card swipe, to the purchaser, as well!

I guess what's more surprising is that Merchants weren't more up-in-arms about the higher fees.
Merchants were complaining but then they just accepted it because theres nothing they can do.

The world needs bitcoin so badly.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Idzy on October 22, 2012, 03:32:31 PM
I don't think chip and pin is all that secure the cards can be cloned and getting a pin by looking over someones shoulder is not terribly difficult.

But the fee is rediculous


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: nobbynobbynoob on October 22, 2012, 03:38:41 PM
I don't think chip and pin is all that secure the cards can be cloned and getting a pin by looking over someones shoulder is not terribly difficult.

We're always told to cover up the keypad as we key in our PINs.

Quote
But the fee is rediculous

Hear, hear.

"Screw banks, use Bitcoin instead!" :)


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: sharky112065 on October 22, 2012, 05:02:42 PM
Wow, that is terrible. Banks keep getting greedier and greedier.  :(


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Dansker on October 22, 2012, 05:48:15 PM
At least we still have our "Dankort" which I assume are immune to this issue?

That is untill they manage to kill the "Dankort" http://en.wikipedia.org/wiki/Dankort


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: repentance on October 22, 2012, 08:48:12 PM
Visa offers chipped cards in the US as well as cards which are PayWave capable.  The problems seems to be a lack of merchants with the technology to read them.

http://usa.visa.com/personal/cards/card_technology/chip_card.html

Whether it's banking, health insurance or communications, you're always going to get additional "user-pays" fees when stream-lined, efficient systems have to interact with ridiculously complex and inefficient systems - it's exactly what you'd expect in a free market.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Stephen Gornick on October 22, 2012, 09:40:29 PM
Visa offers chipped cards in the US

Those from the U.S. who frequently travel abroad avoid the hassle of trying to swipe by getting a chip n pin (or chip n signature) from an issuer that offers them.

 - http://www.flyertalk.com/forum/credit-card-programs/1304271-usa-emv-cards-available-today-chip-pin-chip-signature.html
 - https://docs.google.com/spreadsheet/ccc?key=0Ani-u3tGk5hedGRvcE1ELVg5UmlGZk01SHZvTUMxdUE#gid=0


The problems seems to be a lack of merchants with the technology to read them.

And they probably won't add it until they are forced to.  

Which makes David Birch's tweet from this morning timely:

Quote
MasterCard are "firm believers in chip and PIN" but are not going to mandate it #money2020
- https://twitter.com/dgwbirch/status/260409853506359297

As is another of his:

Quote
Remember the key statistic: US is a quarter the world's card volume, half of the world's card fraud #money2020
- https://twitter.com/dgwbirch/status/260424195723382785


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: MysteryMiner on October 22, 2012, 09:53:42 PM
This might be a bad news for carders lol!

In some parts of EU there is absolutely no cards issued without EMV chip and the magnetic stripe might soon go away completely although no proposal is announced about this. It is still good as a backup measure or tool for carding.
Quote
Remember the key statistic: US is a quarter the world's card volume, half of the world's card fraud #money2020
Because in other parts of world most of the cards are EMPTY! You cannot cash from empty accounts of poor people :)


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: moni3z on October 23, 2012, 05:19:16 AM
EMV already useless, read Bruce Schneier's blog he has a dozen or so posts on how security researchers cloned, MITM attacked or otherwise bypassed the chip.

Chip+Pin simply passes off the liability to the consumer and offers no real security. They already busted a ring in Brazil that was wholesale cloning chips, and now there's a whole new field of fraud in NFC and Visa 'paywave' technology



Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: David M on October 23, 2012, 05:52:27 AM
Chip+Pin simply passes off the liability to the consumer and offers no real security.

+0.5. 

Only because I don't think "real security" is possible without information loss.

That's why I love Bitcoin.  Your coins are one data point away from total security :-)


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: MysteryMiner on October 23, 2012, 02:53:26 PM
EMV already useless, read Bruce Schneier's blog he has a dozen or so posts on how security researchers cloned, MITM attacked or otherwise bypassed the chip.

Chip+Pin simply passes off the liability to the consumer and offers no real security. They already busted a ring in Brazil that was wholesale cloning chips, and now there's a whole new field of fraud in NFC and Visa 'paywave' technology


So how can I make copy of my own credit card with fully functional EMV chip?

Contactless tech does not belong to EMV discussion. Don't compare apples to oranges.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: ArticMine on October 23, 2012, 03:17:28 PM
Right now there is a simple solution to this problem that works everywhere for in person transactions. It is called cash.


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: Mike Hearn on October 23, 2012, 03:34:43 PM
EMV isn't useless. The guys at the Cambridge lab have repeatedly shown it has weaknesses the banks weren't admitting to, but many of the exploits are absurdly complicated to pull off. Anderson and his students always claim that people have said they saw fraudulent transactions in the real world, so it must be happening, but it's unclear if it's really done the ways they claim. Also, EMV has been patched several  times. Some attacks don't work if the bank update their server software, etc. It doesn't matter to them, they make an "EMV is broken" press release anyway.

Chip and PIN may not have totally eliminated all fraud, but who would have thought it'd do that anyway? Technology always advances. What nobody disputes is that it reduced the problem dramatically for card present transactions. Most fraud with EMV cards takes place either online where the chip is useless or via cloned magstripes in countries where Chip and PIN wasn't rolled out yet (but this is a powerful signal to the fraud detection algorithms).


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: ryanAC on October 23, 2012, 03:46:26 PM
For those in the US who want a chip & pin card for travel abroad, I suggest Andrews Federal Credit Union http://www.andrewsfcu.org (http://www.andrewsfcu.org)
It was the only viable option I could find when I was looking 6 months ago.
You'll want to start the process a few weeks before your trip!


Title: Re: $1.31 extra fee to use the magnetic strip on payment cards
Post by: MysteryMiner on October 23, 2012, 04:05:46 PM
Quote
Chip and PIN may not have totally eliminated all fraud, but who would have thought it'd do that anyway? Technology always advances.
Casascius POS terminal is very hard to be cheated by customer. Double-spends are possible but it can be almost eliminated if there is some slight waiting period before the server detects it and alerts. Only the seller can cheat by redeeming private key himself before customer does it.

Credit card system is fundamentally broken in many ways and I love it! They are a brainfart of banksters and controlfags.