Originally Posted by
kebosabi
Precisely my point. A restaurant or a merchant would probably not raise their prices if credit card fraud hits them may be like one transaction every six months or so and maybe one store in a single city at that. At such a rate, it is a cost of doing business and the merchant would likely eat up the cost for the sake of letting consumers pay for their products with a credit card.
If all your competitors are paying $4/gal for fuel, but you know where you can get it for $2/gal, you would be a fool not to take the lower cost and effectively increase your profits. It's a no brainer. By claiming there is a cheaper alternative payment system, but that merchants are rejecting it because they can raise their price with their competitors, you're in effect saying you would continue paying $4/gal because everyone else is. That's nonsense. Regardless of the market price, merchants are interested in lowering costs because this increases profits.
Let's say you're paying half the price of fuel as your competitors. If the optimum price happens to be lower than the competition's price (because the difference is more than made up for in volume), then you would be a fool to charge more. Following the herd is not the smart thing to do if you can increase profits by lowering your price.
Originally Posted by
kebosabi
Now let's say that starts to happen more frequently to the level of five transactions EVERY MONTH and it starts affecting not only you, but practically every competitor out there within the city. If a problem exists that affects more frequently and that hits across an entire market, then there's no need to undercut the other guy to keep your market share,
Why just be satisfied with maintaining market share? Why not increase your market share? Your assumption that it's uninteresting to increase market share is the cause for your failure to see why the portable pos terminal is rejected. Of course you want to increase your market share. The portable POS terminal is not chosen because it increases cost, and thus threatens your market share by forcing you to take a smaller margin above a higher cost.
Originally Posted by
kebosabi
The threat of skim-cloned credit cards is indeed something that is happening more in America today which affects every merchant and their competitor out there.
You don't counter skimming by replacing equipment with new equipment that also has the same vulnerability, and also introduces more vulnerabilities. Creating more fraud opportunities without even controlling the past ones is just a recipe for disaster.