341–350 of 1001 posts
Earnest question: is the EU really Visa and Mastercard's most profitable market? I would have expected it to be the US, both by customer volume numbers and in terms of regulatory environment (i.e. the US allowing payment processors to take a larger cut).
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It's just now how it works in most of Europe. I've lived in four countries, had accounts with lots of banks, paid for countless plane tickets and booking reservations, and only had a credit card once when I was issued one at work. I don't expect I'd ever get a personal one, and can't think of anyone that regularly uses one. The only time I even considered it was to build a credit score in the UK to eventually apply f…
In EU to build credit score the best thing is to have no credit at all. I'd be surprised if the UK works differently.
Not having a credit score isn't necessarily a big problem, as banks use it for context rather than making decisions purely based on it, but I did see some advice online about getting a "credit builder card" [1] (essentially a high interest and low credit limit card) as a way to build up credit history.
I decided that getting in debt just so I can prove I can get out of it is a stupid system, and didn't do it. Last time I checked (with Experian), I had a perfect credit score, so I don't know what happened in the meantime.
1: https://www.experian.co.uk/consumer/credit-cards/types/credi...
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There are many countries where debit cards are the norm and credit cards are extremely rare. In France, people are so afraid of consumer credit that cards are renamed ‘deferred debit cards’ rather than credit cards, otherwise people do not want them.
Debit cards come with the same fraud protection as credit cards do, which is the most important benefit of Visa/MasterCard.
It’s sort of true in a legal sense, but not a practical one. If you find yourself in a dispute (even outright fraud sometimes) you might end up stuck for weeks or months with your disputed funds frozen.
If you are a highly paid software engineer with considerable assets and transaction volume at your bank it’s likely you will never experience hardship with disputing a transaction. If you are someone scraping by and that $200 depends on you paying rent on time that month you will find your experience to perhaps be different.
I’ve helped friends and family with such disputes in the past. Credit cards even when it “goes wrong” are much better to deal with. Your credit limit being reduced a bit is immaterial to your life most of the time. Having your own money tied up during an investigation that demands more and more paperwork like police reports etc. can be incredibly damaging and if nothing else quite stressful. The experience some of my friends had in these matters is nothing like I had when I had my wallet stolen and I no longer recommend anyone use debit if they can avoid it.
Heck, I had a friend who doesn’t even have a passport dispute an ATM transaction in a country he never visited. The bank initially denied it and it took weeks to eventually get it resolved in his favor.
In the end having the banks money tied up vs your own money at risk is always better if you can handle the responsibility of a credit card.
So Wero is not a credit card, but something more like Venmo? How is it supposed to replace Visa and Mastercard?
Wero is just one of many systems available that allow individuals to make transfers easily and almost instantly. There is also Bizum in Iberia and Blik in Poland. These instant phone-to-phone transfers are very popular, especially among young people who rarely use cash. Wero itself was launched by large banking networks because they had no solution to compete with neo-banks such as Lydia, which was a pioneer in this…
Debit or ATM cards are different. They pull money directly from your account and can exist independently of Visa and Mastercard. For example, some credit unions still issue ATM only debit cards that are not part of the Visa or Mastercard networks.
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If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly. But the more concerning fraud is when you purchase something and don't receive what you should have received from the merchant. Whether it is due to outright fraud or not. In these cases you will also have your m…
> If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly. This may be what the letter of the law says but this isn't reality. Using debit puts you at greater financial risk.
What how? Surely the US populations credit card debt dorf even the global populations debit card fraud numbers. So while my whole family in a combined 200 years of adulthood have indeed lost some 1000 euro total in fraud, it's not thing compared to the average Americans credit card bills.
I'd rather risk the street criminals with my debit than the suit wearing ones with their credit.
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Also European merchants who need to accept payments from non-Europeans need to accept Visa and Mastercard.
Of course but they can support an EU standard as well. It's not mutually exclusive. The big benefit is that all internal EU card transactions are no longer routed via US companies which is quite ridiculous.
its not exclusive, but there is a problem with network effects. From the point of view of a business why should they add support for a new payment system no one users, from the point of view of consumers why should they sign up to a new system that no one accepts?
As I said in another comment the most likely alternative is a more decentralised system that all countries/currency blocks that want sovereign payments can get behind.
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Just by their nature, that is inherently untrue. If your CC is stolen, you are not out all the cash in your account until the dispute is resolved. If your debit card is stolen, you lose that cash, making it more difficult to pay whatever other obligations you have that period.
If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly. But the more concerning fraud is when you purchase something and don't receive what you should have received from the merchant. Whether it is due to outright fraud or not. In these cases you will also have your m…
Not to mention the per-purchase (online/in-person) limits, mandatory PIN entry, and daily maximums...
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> credit cards are giving you a revolving loan I'm confused - is it not the issuing bank that gives you the loan, and the credit card company just provides the infrastructure? Btw. having an overdraft limit of a few hundred Euros is quite typical for those liquidity issues. You don't need a credit card for that.
I used "value chain" euphemistically because you can get really complex on this and I wanted to spare the casual reader. I meant your credit card as an end-user product in your pocket and not meaning the card networks in isolation, but the value chain is roughly: 1. Merchant (bears little fraud risk but a lot of chargeback risk) 2. Payment Gateway (little direct risk but some liability risk) 3. Merchant Acquirer (mor…
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The sensible thing would be to do it by currency area - e.g. the Eurozone. Technology and some systems could be shared.
Then we could have an international standard to let the national networks work together, like for the phone network.
There are also business and regulatory problems with regard to international transactions.
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> No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones. And companies like Visa, Mastercard, Ame…
> Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard. Hard disagree. Until Covid, many small shops didn't take cards in Europe. Taxis, restaurants, market stalls, even trains were often cash only not that long ago. I in the UK ran accounts in companies that had people travel extensively in Europe. We used to issue travellers with EUR200 for the things that cards couldn't buy. Mo…