I'd argue the opposite. In the US, the merchants had too much power to delay the introduction of Chip+PIN readers.
The fraud of magstripes was huge, because there was literally no security. Anyone could create a magstripe. Customers using credit cards in the US are protected by legislation against that fraud.
The whole point of EMV was to remove the capability of fraud by replicating the magstripe. It meant that the transaction could correctly tell between "card present" and "card not present" transactions. So the risk of card-present transactions is dramatically lowered, independent of who is responsible for the fraud.
It is to both the merchants and the banks benefit to reduce/remove fraud. The banks offloaded it to the merchants in the US (as they did in other countries), but the introduction of EMV was "sold" to the merchants in the rest of the world by the banks saying they would take on the risk of fraud for "card present" transactions.
The banks were never "neutral" in the US. Visa/MC were both bank consortiums.
America is not a "convenience optimizer" its a "changing consumer behavior is hard so lets not do it" optimizer.
> In the US, the merchants had too much power to delay the introduction of Chip+PIN readers
Merchants had more power, but the ultimate deciders were consumers, who have not only a choice in merchants but a choice in cards.
> the risk of card-present transactions is dramatically lowered, independent of who is responsible for the fraud
Nobody cares if business goes down more than the fraud costs.
> Visa/MC were both bank consortiums
This is wrong. American Express is bank-like because it owns its own credit book. Visa and MasterCard are payment processors. They are publicly traded and not bank consortiums. This is crucial to understanding the power dynamic: the payment processors do not take diktats from the banks.
> America is not a "convenience optimizer" its a "changing consumer behavior is hard so lets not do it" optimizer
Sure. Friction avoided for not being worth the trouble is optimising for convenience.
I can personally tell you that had a card gone chip + PIN mandatory, I’d have dropped it, and if a merchant started requiring special payment requirements I’d expect compensation for the trouble. Many merchants, notably Starbucks, did this, but it could never go mainstream. And unlike countries where consumer banks were incentivised to lobby for reforms, that political will to override the public’s preferences couldn’t exist here.
Both Visa and Mastercard started out as companies that were owned by a consortium of banks.
"By 1970, BofA gave up direct control of the BankAmericard program, forming a cooperative with the other various BankAmericard issuer banks to take over its management. It was then renamed Visa in 1976."
Both Visa and Mastercard mandated upgrades to merchant terminals in the non-US world. For example, in Australia, as of 1 August 2014, Chip+PIN was required.
That upgrade has been delayed repeatedly in the US because of pushback from the merchants that don't want to upgrade their terminals. It has nothing to do with the consumers.
Visa in the US states: "When you upgrade to chip technology, you continue to be protected from counterfeit fraud losses. As of October 1, 2015, businesses that don’t accept Visa chip card transactions may be responsible for any resulting counterfeit fraud. Similarly, effective April 17, 2021, Visa transactions made at ATMs and Automated Fuel Dispensers (AFDs) will be included in the Liability Shift Policy."
In the US however, they continue to support signatures, which have been removed pretty much every where else:
"No. Visa continues to support a range of cardholder verification methods (CVMs) including signature, online PIN, and no-signature for low-value, low-risk transactions. Visa will maintain interoperability across those methods with technical standards, business rules, and compliance programs."
The fraud of magstripes was huge, because there was literally no security. Anyone could create a magstripe. Customers using credit cards in the US are protected by legislation against that fraud.
The whole point of EMV was to remove the capability of fraud by replicating the magstripe. It meant that the transaction could correctly tell between "card present" and "card not present" transactions. So the risk of card-present transactions is dramatically lowered, independent of who is responsible for the fraud.
It is to both the merchants and the banks benefit to reduce/remove fraud. The banks offloaded it to the merchants in the US (as they did in other countries), but the introduction of EMV was "sold" to the merchants in the rest of the world by the banks saying they would take on the risk of fraud for "card present" transactions.
The banks were never "neutral" in the US. Visa/MC were both bank consortiums.
America is not a "convenience optimizer" its a "changing consumer behavior is hard so lets not do it" optimizer.