Originally Posted By: MartinFocazio
Your liability for fraud is limited - by federal law - to $50.

Many credit cards also tout their zero liability policies in case of fraud. With credit cards being such a cash cow, they don't want to jeopordize anyone losing faith or getting scared of using their credit card for as many purchases as possible.

Quote:
In Europe - in fact in most of the rest of the world - credit cards make use of an additional, and hard to copy RFID chip...the card reading device itself detects the RFID signal - and more often than not requests a "PIN"...This "chip and pin" method is MUCH more secure than the mag stripe only method used in the USA.

I believe this difference between America and other places is a holdover from the early days of credit cards. America has a vast telephone system which allowed those credit card readers to "phone home" to verify transactions. In contrast, separate phone lines just for card readers were not so readily available in many European locations, so more stand-alone verification systems were used there, and those differences persist to this day.

I remember when I lived in New York, Visa rolled out a pilot program for Visa Cash in the late 90's in the Upper West Side. Basically the "chip and PIN" system that Martin described using a stored value smart card. I was a fan of the system and tried to use it as often as I could, but it was a real dud and didn't last long. It was just too much hassle, I guess, for users and merchants to use another payment system. Speed is the key, I think. The faster the transaction goes, the higher the chance of widespread acceptance, I think. I think the new system doesn't necessarily have to be faster (although that helps a lot) but it can't be slower or more cumbersome than the current methods or else people will reject it.