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Debit cards are hidden financial infrastructure

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Re: Debit cards are hidden financial infrastructure

#181

Post by c22 »

oneplane wrote: post #142
reaperducer wrote: post #39

Earlier quoted context omitted.

Sounds like you've never had a car break down. Or a relative get hurt on the other side of the country. Or been seriously ill. Or unemployed. Or had a major appliance break. Or a million other things that happen to people every single day.

Pretty much all of that is handled by the social safety that the government is there for or by your own savings that you build up because you are an adult and look ahead to make sure you can deal with such events. One of those things is planning and specifically financial planning.

A full quarter of adults in the US have no savings at all. It can be hard to build up your reserves when more than half the money you make from your two jobs goes to rent. Did I mention those jobs are both "part time" so no benefits either.

Re: Debit cards are hidden financial infrastructure

#182

Post by simonbarker87 »

aynyc wrote: post #4

Use credit card, it’s the card issuers that are on the hook for fraud. It’ll help you build credit. Use debit when you don’t have the means or credit history.

This is a strong US vs the rest of the world difference. In the UK for example most people will do their day to day spending on debit because the rewards we get aren’t worth the faff of paying for things a month later, when you are less “flush” (Americans just seem to have a lot more money sloshing around compared to even well paid Brits and Europeans) it’s much harder to manage that monthly offset from salary payment to credit card falling due and when the rewards are so paltry it’s just nit worth the faff. Only one of my friends does any regular spending on a credit card and he says “it’s Amex so it’s worth the extra faff but only just”

Re: Debit cards are hidden financial infrastructure

#183

Post by rudian »

refurb wrote: post #160
NikolaNovak wrote: post #118

Earlier quoted context omitted.

I'm going to re learn the lyrics to Oh Canada and sing them joyously and thankfully... Our banking system gets a lot of ire but dear Gawd.

Oh boy no. Canada has only a handful of banks, minimal competition (they make money hand over fist) and customers get bent over on a regular basis.

Canada sure learns a lot of tricks from their big brother.

Re: Debit cards are hidden financial infrastructure

#184

Post by doikor »

dsomers wrote: post #162
joecool1029 wrote: post #141

Earlier quoted context omitted.

I seem to recall there being service levels at banks in Canada and maximum numbers of transactions per month until one gets hit with per-transaction fees. I was told explicitly when I opened my TD Canada Trust account there that it was imperative that I both keep money in the accounts and use them occasionally or dormancy fees would accrue (and if there was no money left, they'd then slam it with overdraft fees). The…

Totally agree, the Canadian banking system is a corrupt cartel the levies it’s own tax on every Canadian. This was made even more clear to me when I moved to the Netherlands and every banking fee was suddenly 1/3 as much as in Canada for the exact same service.

Here in Finland banking fees are a thing only for the poor (and even then we are talking about a total of 20 or 30 euros per year)

Basically every bank has some kind of "premium customer" program that you qualify for by having enough investments or loans from that bank and magically all your banking fees go away (obviously they just make their money from the services they provide for your investments/loans)

Re: Debit cards are hidden financial infrastructure

#185

Post by laurent92 »

Foobar8568 wrote: post #165
steveBK123 wrote: post #99

Earlier quoted context omitted.

The transaction re-ordering to maximize the amount of overdraft events should have put execs in prison. Out of all the obviously corrupt, mal-intent, direct consumer harming practices this was quite near the top.

In a French bank, I have credit transactions first then debit ones, in a Swiss bank, the contrary, I was shocked, especially that day, I did check my bank account to verify if I could proceed with a wire transfer, the following day, it shown a temporary minus amount but I didn't get an overdraft. So yes, fuck banks.

In Australia in 2010 I got a debit card for the first time in my life. The card would simply reject transactions. “As should be”, I thought. It was a revolution for me.

Re: Debit cards are hidden financial infrastructure

#186

Post by supertrope »

pc86 wrote: post #121
toomuchtodo wrote: post #106

Earlier quoted context omitted.

The US Federal Reserve is building an instant payment system (FedNow) that goes live in 2023 [1] [2]. Payment providers are moving upmarket and to features that stave off churn (my analysis here) due to expected revenue destruction caused by a free alternative being available (a US version of SEPA). This is alluded to in the second half of this blog post. If payment revenue (interchange and the like) declines, and ne…

What do you think is most likely to "give" in this scenario?

The Durbin Amendment to Dodd-Frank capped debit interchange revenue. Bank of America responded by raising the minimum balance to qualify for no fee checking to $1500.

Re: Debit cards are hidden financial infrastructure

#187

Post by Cederfjard »

alberth wrote: post #40
loosescrews wrote: post #35

Earlier quoted context omitted.

I think that number was supposed to be pre-Dodd-Frank (or Durbin-exempt).

Ah. Yes, that makes more sense - though definitely should be called out for those readers unaware of the regulatory change. Rumors have it there’s another change also on the US horizon.

It makes sense to me, since it’s in chronological order. If you read the whole article, you get the whole and up-to-date picture. Also don’t forget the exemption for banks with less than $10 billion in deposits - presumably that’s pretty relevant to a lot of his readership, given fintechs and how they partner with community banks on this.

Re: Debit cards are hidden financial infrastructure

#188

Post by tehabe »

numair wrote: post #43

The beginning of this article is a fairy tale that ignores what used to be one of the biggest drivers of revenue for banks: overdraft fees. Maybe the HN crowd has never been in a situation where they were auto-billed into a negative balance, which then caused an overdraft fee that then further drove their balance into negative territory, but this was a weekly/monthly fiasco for millions of Americans. I was once in a…

I'm really confused about those overdraft fees (or rather overdraft interests). My bank has also charges overdraft interests, they are currently 6.99% p.a. So if I get into overdraft due to one payment but money comes in on the very same day it shouldn't be that much interest I have to pay to the bank.

For an overdraft of 100 euros it should be like 2 cents for a day.

Re: Debit cards are hidden financial infrastructure

#189

Post by barsonme »

simonbarker87 wrote: post #182
aynyc wrote: post #4

Use credit card, it’s the card issuers that are on the hook for fraud. It’ll help you build credit. Use debit when you don’t have the means or credit history.

This is a strong US vs the rest of the world difference. In the UK for example most people will do their day to day spending on debit because the rewards we get aren’t worth the faff of paying for things a month later, when you are less “flush” (Americans just seem to have a lot more money sloshing around compared to even well paid Brits and Europeans) it’s much harder to manage that monthly offset from salary paymen…

> most people will do their day to day spending on debit because the rewards we get aren’t worth the faff of paying for things a month later, when you are less “flush”

This sort of thinking misses the point that even with credit cards you don’t spend what you don’t have. You (ideally) treat it like a debit card. If I spend $100, then I’ve $100 less in my checking. If you do that, then “flush” never enters the equation.

Re: Debit cards are hidden financial infrastructure

#190

Post by spir »

I'd be interested to know patio11's updated take on the long arc of crypto.

As a crypto person, it's cool to see how the benefits he describes-- eg lower transaction costs, embedded finance, and novel items such as bundling reporting and instant settlement-- are also driving much of the product-side interest in crypto and web3.

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