Credit card companies should switch to a PayPal-like system for online payments, and use “blank” cards (no number visible to the human eye) for offline payments.
By this, I don’t mean, why do we need lines of credit? That’s a question for the economists. I’m simply asking why we need some 16-digit number (plus an expiration date and 3-digit “security code”) that people can use to magically make you owe money. It’s an inherently insecure system.
I tried to split a bill once by asking my friends to let me swipe their cards using Square. For those who don’t know, Square is a little credit card reader that you can use with most modern smartphones. My friends were nervous about the security implications of me initiating a transaction with their credit cards on my phone. My response: If I really wanted to steal their credit card info, I would just memorize the number while it’s sitting on the table in front of me. Second response: Everyone seems quite OK with handing their card over to the underpaid high school student waiter.
The problem is that a credit card number is supposed to be a “secret”, but it’s one we frequently share with all sorts of random strangers. So what’s the alternative? Use a different “number” for every transaction, like PayPal does.