From: Michael Conlen <meconlen@IntNet.net>
Date: Fri, 18 Aug 95 13:16:51 PDT
To: Michael Froomkin <mfroomki@umiami.ir.miami.edu>
Subject: Re: SSL challenge -- broken !
In-Reply-To: <Pine.3.89.9508181449.A623131443-0100000@umiami.ir.miami.edu>
Message-ID: <Pine.SV4.3.91.950818160146.15493A-100000@xcalibur>
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On Fri, 18 Aug 1995, Michael Froomkin wrote:

> On Fri, 18 Aug 1995, Perry E. Metzger wrote:
> > > The credit card market has thin margins?  That's news to me.
> > 
> > Its true. The issuers often end up making most of their money for a
> 
> actually the NYT reported this week that banks make super-profits on 
> credit cards.  economists are not sure why the margins are about 3 times 
> that of other lines of biz.

Thats the business of banking. In any case most business run tight net 
margins. Over half of the gross margin in Retail Electronics dissapears, 
and in some markets like Los Angeles, its as low as 6 or 7 percent.

The Credit card companys dont have a whole lot to worry about other then 
public image, and only a few like American Express worrys about this 
alot. A large portion of phone calls paid for by credit cards are 
declined for payment. Its the establishment that didnt check the person 
using the card that looses out. Mail order business take the loss when a 
computer is carded, beacuse they dont have a signature on hand to back up 
the charge. The credit card company dosent take the hit at all. American 
Express is the toughest of all the companys that I have delt with. While 
I can steal a card in the mail, sign it, and use it, at which case the 
person who the card was intended for can be held liable for the bill, 
AmEx requires that teh person who's name is on the card sign for the 
charge. Basicaly what it comes down to is, card companys and banks dont 
take the hit unless they want to for public image and customer service. 
What do they care if their card is being used by someone who shouldnt 
have it. They can decline payment at will without a signature. 

I in some ways hope using credit cards on the net takes off, is abused, 
and people go back to using cash, and checks, and buying things in 
person. 


						Groove on Dude
						Michael Conlen
						meconlen@intnet.net