The price of security

Milady and I were conversing with a friend last night, and an interesting topic came up. Some years ago, several banks (BofA and CapitalOne were mentioned) started putting customers’ photos on their credit cards. This widely hailed as an excellent idea.

And then, inexplicably, they stopped doing this.

The obvious question was “why?”. Why did they stop doing something that was universally hailed as a good idea?

So I put my thinking cap on, and came up with some ideas.

  • I remember reading somewhere that the price of putting a photo on a credit card was a couple of dollars per card. Multiply this up by the millions of cards in circulation, and you have a huge expense that the bank has to bear.
  • Credit-card fraud, on the other hand, is not a cost that the bank has to bear. They do a chargeback, which effectively passes the cost on to the merchant. So, the customer is covered, the bank is covered, the merchant gets the shaft and pays the price. That is perfectly legit – it is part of the merchant agreement.
  • There are also many transactions where the merchant cannot see the card; for instance, pay-at-the-pump transactions in gas stations, and internet transactions.
  • Finally, with card-swipe machines in operation at most stores, there is often no need for the cashier to see the card — and too many of them don’t bother looking, anyway.

Sometimes “security measures” don’t really do that much for security. And sometimes, the price of security is too high.

I think I understand now.

But I still wish that they would give customers the option to have their photos on their cards. I’d buy that for a dollar.

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