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I was recently interviewed by NPR’s Planet Money (podcast, transcript) regarding a particular form of credit card fraud. One comment which tragically ended on the cutting room floor: "the optimal amount of fraud is greater than zero."
Crime rates are a policy choice
Scoping down to payments fraud
Who pays for payments fraud?
Fraud as a necessary business expense
Costs and benefits of policy choices around trust
Making a customer of someone you’ve never met
Anti-fraud loops used in online commerce
Different businesses have different tolerance for fraud
This extends beyond payments
Counterintuitively, businesses, customers, and society prefer having fraud to what they'd need to do to not have it.
We are not affiliated with Patrick McKenzie. This unofficial audio edition is available to listen to and share for free. Read the original on Bits about Money.
Duration
~14 minutes (13K characters)
Release date
Sep 2, 2022