I think that the Government is manipulating the people and that these new laws will certainly be abused. I think that it is up to the entrepreneurial community to come up with solutions to help mitigate the situation. This can be achieved on several levels.
1. Help whistle blowers deliver material to overseas journalists
2. Create stronger security for journalists and whistle blowers to communicate
3. Find ways to better engage the public in the politics of today so that better political parties can thrive in the future and strengthen our constitution
Its not a blase attitude. Its a chicken and egg situation. The credit card companies want to implement it but they need the stores to upgrade their point of sale hardware to accept the new cards. Stores say they won't upgrade their hardware til card companies release the cards
When I last heard this discussion it went like this: Visa to store : "People have been asking us for chip + pin and we're ready! Just pay a one time fee of $199.99 for the upgraded reader and note that C+P cards carry an additional .5% service charge for the more complex handling they do."
Literally using it as a revenue generating opportunity and a way to raise fees. My friend who owns the store declined to participate as they weren't interested in raising their prices just to pay Visa more money. Had Visa come at it the other way, reducing fees due to likely less fraud it would have been a different story.
Literally using it as a revenue generating opportunity and a way to raise fees.
This is the crux of it. In the US, every change is an opportunity to raise margins. Vinyl to CD. Book to Kindle. It kills me when the dead tree version is less than the Kindle version, but it's the same thing at work as with C+P.
How is that? I have a Chip+PIN enabled credit card and if the shop doesn't support that I can still swipe the magnetic stripe.
I don't see why they don't just provide credit cards with both options for a while until enough of the PoS hardware has been upgraded that they can get rid of the magnetic stripe. I guess cost plays a role, but I would assume that the decrease in fraud might offset that somewhat.
It's a complicated issue. Banks are partly afraid of adopting something new. If Bank A is amongst the first American banks to switch and something goes wrong, Bank B may win its business due to customer frustration
I highly doubt that banks really care about "customer frustration." If they did, then they would be focused on fixing a million different existing problems.
Given that, despite all the customer frustration that exists right now, they haven't been losing customers. I don't think that Chip+PIN failing to work correctly at first would cause customers to switch. Chip+PIN cards would only be cycled into use gradually, as people replaced their older, swipe-only cards with Chip+PIN cards, or signed up for new accounts. There would be more than enough time to sort out any problems, and you could also start out by making Chip+PIN optional for new/replaced cards.
This is exactly what will happen. During the transition you will still be able to use mag swipe, then after some period the reader will force the use of the chip and only use mag swipe as a fallback when a chip error occurs. I suspect after a short while mag swipe will be removed entirely, but it remains in many places outside of the US as a fallback.
It's all politics. Its a big financial commitment for whichever side goes first. The US has a bigger population than Britain. And perhaps the industry politics were different there too. The card companies may have got their way.
There's liability to consider as well. In the US, the consumer is generally not liable for fraud; I've certainly heard that in other countries with chip and PIN, if somebody steals and uses your card (having somehow obtained your PIN) you don't necessarily get your money back.
They rolled it out in Canada without anyone getting into a flap. It just happened.
Readers wear out. As people buy new ones they were chip/pin ready. A lot of these terminals are rented as well, making it easier for providers to swap them.
Banks may be greedy but in exchange for their greed they protect my money. As an analogy, Governments may be lacking in integrity, but they offer protection such as police, laws, and human rights. Putting your faith in Bitcoin is like trying to live at sea so that you can be "free" of all governments. But I would rather put up with the ills of Government than the ills of piracy and the instability of the ocean.
This article cannot be taken seriously if it will not address the recent problems with Bitcoin (thefts, illegal markets etc) and offer explanations and reassurances.
Maybe I'm wrong but the excitement around Bitcoin seems to be an extension of the old Utopian ideas born out of the anarchist movements: if only we remove the Government and the status quo from the equation all our problems will be solved.
No matter what security measures people devise for Bitcoin or anything else on the web, they will never be perfect. Look at heartbleed! What protects us is the system: laws, repercussions, investigations, insurance. Once you have laws and police to protect the banks, the banks are happy guaranteeing you your money back if you are a victim of fraud or theft.
Bitcoins biggest selling point is also its Achilles heel. I'll keep my money in the bank until Bitcoin is legislated and protected.
> Once you have laws and police to protect the banks, the banks are happy guaranteeing you your money back if you are a victim of fraud or theft.
This is really just not true. It's also less and less true as time goes on. There are now cases of small businesses hit by Zeus malware suing their banks for not covering the fraud losses. Its also getting more difficult for defrauded customers to get Visa to issue chargebacks; eg, my mom was told she would first have to file a court claim against a sketchy moving company which stole her credit card deposit. In China, UnionPay (the Visa of China) simply doesn't do chargebacks for customers, that's why TaoBao (eBay/amazon of China) offers escrow services.
Furthermore, watch any American Greed episode, it's on its sixth or seventh season on CNBC. Tell all the victims profiled on that show that their losses to investment frauds, mortgage frauds, ponzi schemes etc., that their money is guaranteed by the bank. It just isn't.
True, bitcoin is a Wild West. But fraud happens very often through the legacy banking system as well.
I never said that all claims were paid or that all banks were equal. I simply said that Bitcoin is not the great solution people think it is. Its much worse than what you are describing. How many people who lost bitcoin funds were able to take their issues to courts? How many were able to turn to the police? What evidence can you take to court when every transaction is anonymous?
And it makes sense for the bank to ask your mum to file a claim first. How else will they know if she is lying and trying to defraud the bank?
And your comment about investment fraud, mortgage frauds and ponzi schemes are beyond the scope of this debate because those types of fraud are beyond the simple matter of financial savings and payments. Investments always carry a level of risk and are never guaranteed.
Stop comparing apples and oranges to make your argument seem stronger
You're right, but Bitcoin does little to prevent fraud as well. The only kind of fraud Bitcoin prevents is "check's in the mail" type schemes, or fraud involving a customer trying to scam a vendor (by performing a chargeback after receiving a product, for example).
I think Bitcoin has a ton of great uses, but fraud protection is not one of them for consumers at least.
That's correct, but this shouldn't be understated. Bitcoin provides the ability to be sure that a transaction is legitimate when you're on the receiving end, and that the it can't be canceled later. This can be done without knowing anything about the person on the sending end, much less require a level of trust based on the sender's reputation.
> Banks may be greedy but in exchange for their greed they protect my money
...provided tax payers bail them out, at least that has been so in the recent past. So banks dont really protect your money.
There indeed existed regulatory separation and barrier between the risky side and the non risky side. A client of a bank could choose which side to be on. But bankers thought this was too much of an imposition on their creativity. It still would have been fine if the removal of the barrier was not forced on other banks and countries, which I hear they were.
Most (all?) banks in the US are FDIC insured up to $250k per person. Even if tax payer money hadn't been lent to banks to keep them afloat, provided you had less than $250k across any banks that might've gone under, you'd have been okay. In that sense, saying that they don't really protect your money isn't really true.
Realistically, I'm much much much more likely to lose money stored in a Bitcoin wallet I maintain than money stored in a bank, and I'd imagine that's probably also the case for most people.
> Realistically, I'm much much much more likely to lose money stored in a Bitcoin wallet
Oh absolutely. What I was commenting on is that the source of this protection is not the bank alone, but the expectation that someone will pull it through if it went bust.
I live in Australia so we do have greater protections and safer banks than in America. But regardless, those tax payer bail outs are still part of the banking system. The banking system is more than the actual banks themselves, it includes the legal and political climate such as bail outs. You can't compare Bitcoin and Banks without looking at the full picture, otherwise that is just a distortion of reality.
> ...provided tax payers bail them out, at least that has been so in the recent past. So banks dont really protect your money.
In some theoretical sense, sure. On a practical level, I pay my taxes either way, in the banking system my money is insured, in the bitcoin system my money isn't insured.
1. Help whistle blowers deliver material to overseas journalists 2. Create stronger security for journalists and whistle blowers to communicate 3. Find ways to better engage the public in the politics of today so that better political parties can thrive in the future and strengthen our constitution