Principles Of Public Finance : Market Failure

890 WordsSep 5, 20164 Pages
Analysis Principle of Public Finance 1 – Market Failure Will deploying the EMV technology protect the U.S. payment systems from suffering market failure? Market Failure is present when card fraud costs U.S. businesses billions of dollars. It was credit and debit card fraud cost $8.6 billion in 2014 and was estimated to increase to $10 billion or higher in 2015 (Austin, n.d.). This money spent on these losses results in the inefficient use of funds or income by consumers, merchants, card issuers and financial institutions. Understanding the benefits of EMV technology and the improvements already shown in other countries, EMV will help lower card present fraud. Canada has seen a reduction of card present fraud by 50% and the U.K. is down 72%, since the deployment of EMV (Austin, n.d.). These facts only support the benefit of moving to EMV technology and the card processers push with the EMV liability shift. A reduction in this level of card present fraud will definitely help the U.S. payment systems avoid market failure from these fraudulent activities. An additional concern with market failure is the United States ability to compete in the global market. EMV is the technical standard for chip based cards and terminals around the world (First Data, 2011). At this time, Americans traveling in foreign countries are finding it increasingly difficult to use their cards at EMV enabled terminals. Nearly 100% of all terminals in Europe are now chip enabled, which does

More about Principles Of Public Finance : Market Failure

Open Document