Yeah the US banking system is really archaic. They still use signatures as a form of security.
I’m really not sure what the resistance to modernisation is. But it causes all sorts of problems like this, that the rest of the world just never experiences.
jqubed@lemmy.world 1 day ago
Mostly no. When they finally transitioned to chips in the US about 15 years ago there was a period where the card issuers maintained the liability for transactions made with stolen cards, but largely after 2015 (except for gas pumps with credit card functionality) any fraudulent transaction made using magstripe fell on the merchant to suffer the loss. Liability is a reason credit cards are much more popular in the US: if a fraudulent transaction is made the cardholder is normally not out any money, whereas a fraudulent transaction on a debit card could result in a permanent loss of money for the cardholder.
The merchants were responsible for upgrading their credit card terminals at their own cost, so that was how they incentivized upgrading. Still, some organizations with larger numbers of terminals or legacy software implementations were slow to switch to terminals that supported chips. One large local hospital and clinical medical group we visit a lot for specialists and physical therapy only stopped using magstripe this year. The front desk staff told me they were still using the old terminals because of how many they would have to replace and how those integrated with their billing software. They would have to upgrade everything: thousands of terminals across a dozen hospitals and many more clinics along with a major software upgrade or change of providers, and as a non-profit organization owned by the state’s public university system that wasn’t prioritized until it couldn’t be sustained any longer.
And as @captainlezbian@lemmy.world said, merchants have the option to swipe the magnetic strip if the chip has a read error, but the merchant is then risking the liability for a fraudulent purchase.