“The virtual Monopoly of VISA/Master Card on the consumer to business type of transactions and their attempt to maintain status quo as well as their reluctance to develop new 100% secure and irreversible payment instruments especially adapted for the merciless realities of doing business in cyber space, brought this country to the current identity thief crisis…”

In my opinion, blaming hackers and spammers from Ukraine, Russia, Romania, Bulgaria, China, South Korea, Pakistan, India, Brazil, and other countries will not solve the Identity Theft crisis in the United States simply because credit cards were not initially designed to be carried over the internet and therefore with today’s realities became completely absolute at least 15 years ago, when identity theft started to grow.

The identification cards and other documents such as birth certificate, social security card, marriage license and other, were adopted when general public did not have access to the scanners and publishing software, colored printers, card embosses or reader/writer….

….It is complete domination and irresponsible vulnerability of Visa and Master Card who is really created this notorious market place. Visa/MC is playing an innocent victim and taking no financial responsibility for their own product and lack of reliable security of their own product. Product which virtually was not evolved since it’s invention 40 years ago.

By transferring actual and potential losses on the shoulders of millions of merchants. And then the merchants are spreading these losses on the consumers in the form of higher prices. The higher prices are reducing the national competitive advantage on all products & services sold in the United States at least 6% of gross sales (2-3% actual processing fees and 3% potential loss associated with future charge backs). In the result, at least 6% of 11 trillion dollars economy translates in loss of $1 trillion every 2 years. And even more one could disagree in this figure, but could not disagree that the number is huge.

Operating a wholesale business, manufacturing or selling products abroad where profit-margin itself is only 2-3% is not possible at all, because or the burden to reserve 6% price mark-up to cover processing fees and potential losses from charge backs.

To secure a profitable business Visa and Master Card prohibits advertising lower prices if an alternative payment instrument is used to pay for the product, and if they will find out that the merchant is doing that, the merchant account could be terminated, what will bankrupt the business overnight.

…If only financial services industry leaders could come up with really effective plan to completely secure all financial transactions, the identity thieves would disappear overnight.

…I believe that by keeping the same, used to be successful, but new dysfunctional system and by not developing inexpensive, completely secured, instant and reversible payment instruments the identity theft problem will not disappear by itself. By doing nothing this problem will stay with us, destroy us, and hunt us for the last penny we have, unless the best minds from all part of the world be attracted to solve this vital to the prosperity and even national security problem.

From: Vadim Vassilenko

Vadim Vassilenko is right now in jail. He was the operator of Western Express in New York and I’ve posted about it before. KYC takes on a truly powerful meaning in the digital currency exchange business.