Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Can the Visa-Mastercard duopoly be broken?

economist.com

Post reply on HN
Print view View original

511–520 of 703 posts

Re: Can the Visa-Mastercard duopoly be broken?

#511

Post by lxgr »

snazz wrote: post #198
PaulDavisThe1st wrote: post #146

Earlier quoted context omitted.

This does not negate the parent post at all. You're just describing another deficiency of the US banking system.

Out of curiosity, how do European banks avoid this issue? If my debit card or ACH info is compromised and someone drains my checking account, is there a way to use the stolen funds before the bank/court finishes their investigation?

At least in Germany, the dispute process for bank account debits is literally clicking a single button in online banking.

No proof or even reason for this is required in the first 8 or so weeks since the charge (or more than a year if the debiting merchant does not have a "direct debit mandate", which essentially means some sort of evidence of the account holder agreeing to be debited).

Re: Can the Visa-Mastercard duopoly be broken?

#512

Post by lxgr »

mcv wrote: post #489
RHSeeger wrote: post #267

Earlier quoted context omitted.

In the US, automated payments tend to be "pull based", where a company tells your bank "give me this much from this account, I have permission". The company can lie but, by the time you find out, the money is already gone and it can take a long time to get it back. The bank has no real incentive to get your money back. With a credit card, on the other hand, you see what was taken _before_ you pay them. So you can tel…

Dutch banks used to work like that too, by "incasso", and in fact still do to some extent. But any incasso that hasn't been directly authorised by you with the bank can be undone (and apparently at an additional fee to the company that originated it; they really don't like it when that happens). So that's actually very similar to how credit cards work, but without the additional fee. These days you can easily manage…

The problem is that since direct debits are so easily reversible, in Germany they are not seen as a final form of payment (until the charge return time limit expires) as there is no form of dispute arbitration involved.

Merchants will usually not ship goods or provide services for a direct debit alone.

Re: Can the Visa-Mastercard duopoly be broken?

#513

Post by lxgr »

brewdad wrote: post #408
justinc8687 wrote: post #391

Earlier quoted context omitted.

That's not true. As a business, at least, I can run an ACH Debit[0] with just a routing number, account number and name. NACHA rules prohibit this, but nothing programmatically prevents this from happening. [0] https://plaid.com/resources/ach/how-does-an-ach-transfer-wor... .

u/vimy was talking about European banks. There is no "pull" there. People freely share their account info because one can only push money in with that info.

Quite the opposite – SEPA direct debit is an extremely successful payment scheme in many European countries.

Re: Can the Visa-Mastercard duopoly be broken?

#514

Post by lxgr »

Symbiote wrote: post #477
martijnvds wrote: post #455

Earlier quoted context omitted.

You (the account holder) do. Direct debits are instantly reversible for a month (maybe 2?). You'll have to explain to the company that deducted the money why you reversed the charge though, and if it was legit after all you still need to pay them.

There's no time limit for reversing direct debit transactions. https://www.cleardebit.com/indemnity-claims/

There is. It‘s 8 weeks (for any reason including "I‘d like my money back and rather do something else with it") or 13 months (for unauthorized charges).

https://www.europeanpaymentscouncil.eu/what-we-do/sepa-direc...

Re: Can the Visa-Mastercard duopoly be broken?

#515

Post by wink »

cycomanic wrote: post #103
philip1209 wrote: post #49

Fraud protection of credit cards is the root of modern e-commerce. In some ways, Visa and Mastercard are the privatized court systems of the internet. If I end up on a random, self-hosted ecommerce site and decide to make a purchase - what guarantee do I have that the item will show up or be as-described? If I bought something through a bank transfer, reversing that purchase would be incredibly difficult. And, suing…

As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system which have been exported to the rest of the world due to the dominance of the US market. 20 years when I was still living in Germany, hardly anyone had a credit card, while everyone was using automatic payments and electronic wiretransfers. I was very surprised when later (about 13 years ago) a US frie…

What you write is correct re: Germany but you've left out the part where everyone who wanted to order something on the internet (before widespread PayPal adoption) still got a credit card just for that. And maybe for getting money from international ATMs where our Maestro cards would not work (I know I am mixing up timelines here, the cards were Giro, not Maestro at the time and I don't really know the details)

Re: Can the Visa-Mastercard duopoly be broken?

#516

Post by lxgr »

happyopossum wrote: post #220
mcv wrote: post #204

Earlier quoted context omitted.

No one can drain ky bank account through my payment card either. For one, they lack the authorisation to do so, and for another, there's a limit (which I can change) to how much can be transferred per day.

> they lack the authorisation to do so How does the German banking system prevent an unscrupulous online retailer from charging you 500€ for a 50€ item? Or charging you twice?

If they do that (via direct debit), I can click a button in my online banking interface, immediately get the money credited back, and the merchant is debited that amount plus a fee.

Re: Can the Visa-Mastercard duopoly be broken?

#517

Post by lxgr »

Jensson wrote: post #254
happyopossum wrote: post #220

Earlier quoted context omitted.

> they lack the authorisation to do so How does the German banking system prevent an unscrupulous online retailer from charging you 500€ for a 50€ item? Or charging you twice?

2FA, you get a popup in your bank app asking "Do you want to pay X euro to Y?" for online payments. Can turn that off if you want, but it isn't a big bother.

That‘s not how direct debit works. There is no accountholder involvement with processing direct debits, but they can be easily reversed (although after the fact).

There are related payment schemes though that do initiate a push payment (i.e. SEPA credit transfer), giving the accountholder control over the amount and payee, but they are not yet as ubiquitous or usable internationally.

Re: Can the Visa-Mastercard duopoly be broken?

#518

Post by einpoklum »

searchableguy wrote: post #232
einpoklum wrote: post #167

Earlier quoted context omitted.

1. Extra hassle of interaction with a second company other than your bank, extra credentials, tracking balances, etc. etc. When I was living in the Netherlands I had my bank-account-attached Maestro card (or sometimes cash) and that was that. Except when foreign companies needed a credit card. 2. Fees. The whole point of credit cards - for the CC companies of course - is fees.

> Fees. The whole point of credit cards - for the CC companies of course - is fees. On the merchant side, yes. On the consumer side, no. There aren't many examples than Amex which is mostly popular in US charging high fees for their credit cards. Most credit card companies make money from merchant run programs and overdraft & interest on late payments and penalties. They make half of their profit from vulnerable and…

Merchants can forward the fees they pay onto you. And, in fact, some definitely do. So cash/debit card price would be X, credit card price might be X + 1% or X + 3 EUR or whatever. Others just refuse to accept credit cards: Direct debit or cash only.

Re: Can the Visa-Mastercard duopoly be broken?

#519

Post by wink »

crote wrote: post #266
dalyons wrote: post #248

Earlier quoted context omitted.

> consumers can dispute anything within x days and merchants have to issue a refund. No administration. Er merchants will get instantly crushed with first party fraud. As soon as people realize they can acquire a good and then get an instantly approved dispute the day after, game over. Unless thats not what you mean?

Which is currently already happening. I work at a small online store, and we are extremely lenient when it comes to cancelling, returning, or warranty. And yet some customers decide to just do a chargeback instead, which costs us a significant amount of money. Almost all of the time we would've happily send them a replacement or given them a refund! As a merchant, credit cards suck.

To be fair, you seem to be in the minority. The amount of time I've wasted by just trying to get my money back for items that never arrived, arrived broken...

No matter how you argue, the people who do not abuse the system and are honest to the degree of hurting themselves will always be at a disadvantage versus the people who either refuse to replace an item or just file a chargeback instead of even contacting the merchant.

Or the customer support is so bad that you enjoy filing a chargeback.

"Hello, the tracking site says the item was delivered. It was NOT delivered and I asked the neighbors, it's not here." "Thank you for contacting us, the tracking site says the item was delivered. Have a nice day!"

Re: Can the Visa-Mastercard duopoly be broken?

#520

Post by Jensson »

lxgr wrote: post #517
Jensson wrote: post #254

Earlier quoted context omitted.

2FA, you get a popup in your bank app asking "Do you want to pay X euro to Y?" for online payments. Can turn that off if you want, but it isn't a big bother.

That‘s not how direct debit works. There is no accountholder involvement with processing direct debits, but they can be easily reversed (although after the fact). There are related payment schemes though that do initiate a push payment (i.e. SEPA credit transfer), giving the accountholder control over the amount and payee, but they are not yet as ubiquitous or usable internationally.

That is exactly how my debit card transactions works. When I buy a game on steam using my debit card I get a popup in my phone asking if I really initiated the payment and lets me decline.

The payment page spins until I click ok on it in the phone, since my bank wont accept the transaction otherwise.

Post reply on HN