28 © Copyright 2004, Credentica Drawbacks of (plastic & chip) credit cards Not suitable for peer-to-peer payments Need tamper-resistant point-of-sale terminal Need merchant status Payments must be on-line Merchant liable for bogus charges & card-not-present High costs of exception handling Credit cards not economic for below $10 Even less privacy than cheques: Data trail already in electronic format Central parties learn transaction time / items Cardholder profiling for fraud detection Poor security Especially of card-not-present transactions (e-payments…) ID theft opportunities
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