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Money Horror

oltdaniel.at

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Re: Money Horror

#51

Post by ben_w »

hn_throwaway_99 wrote: post #10

To be honest, I always kind of lol at these kinds of rants. Wishing for the "one true payment system" is like thinking that everyone will switch over to speaking Esperanto in the near future. NEVER going to happen. Also, many of his gripes seem ridiculous. I don't know if the situation is different in Europe, but in the US I think pretty much everyone should have a credit card. You can use a secured card if you have…

I moved from the UK to Germany about 18 months ago.

In the UK, credit cards are widely used but by no means universally owned.

In Berlin, quite a lot of places only take cash, and those which do take cards often only take debit. I don’t think I’ve even seen a single credit card advertised in the window of any high-street bank.

Re: Money Horror

#52

Post by 4ad »

Pt_ wrote: post #41

Would it be correct to assume the vending machine only accepts credit as it likely doesn't have a direct connection to a banking system to authorize the payments at time of purchase? I seem to remember credit being a requirement for making purchases on planes for this same reason. I'm curious because I live in the UK and pretty much all terminals here accept debit cards, although I think the UK in general has been a…

The author (who seems to use his cards in Germany) is most likely confused. The problem is not with debit cards vs. credit cards. Every terminal I've seen in Austria and Germany supports both (but see below). The problem is that Austrians, Germans, and perhaps other EU countries think that Mastercard/Visa means credit card, and Maestro/Giro/whatever means debit card. This is exacerbated by the fact that until very recently you couldn't even get a Mastercard/Visa debit card in Austria (1).

These terminals support Mastercard/Visa cards, plus more recently contactless. Mastercard debit cards certainly work.

Btw, if you are an american visiting these countries, and you want to pay with a debit card, when the cashier asks if you pay with a debit or a credit card, answer credit card. They don't care whether it's credit vs. debit, they need to know if it's Mastercard/Visa or the local crap card, to push the correct button on the PoS. If you answer debit, it will NOT work.

1. Austria recently started replacing Maestro cards with Mastercard debit cards... but they seem to be some kind of funny Mastercard cards, not "real" enough for these terminals (except in contactless mode)... But at least you can pay for your plane ticket.

Re: Money Horror

#53

Post by SQueeeeeL »

Pt_ wrote: post #47
SQueeeeeL wrote: post #26

Earlier quoted context omitted.

I feel like there's an argument to be made for having an actual human monitoring large transactions. If you're trying to take out a $600,000 mortgage at 3 AM on a Sunday, that probably shouldn't go through, or at the very least have some human verification. Humans tend to work 9-5 Monday to Friday

Surely anomaly detection is better done by a machine? I guess there's a certain level of human "intuition" about these things but is this not what most banks anti-fraud systems do already?

I imagine the problem with this is it becomes a game-able system if it's purely automated. Sort of like the stereotype in Law and Order where they always pay hitmen $9,999 because "the IRS only monitors transfers over 10k."

Re: Money Horror

#54

Post by Pt_ »

4ad wrote: post #52
Pt_ wrote: post #41

Would it be correct to assume the vending machine only accepts credit as it likely doesn't have a direct connection to a banking system to authorize the payments at time of purchase? I seem to remember credit being a requirement for making purchases on planes for this same reason. I'm curious because I live in the UK and pretty much all terminals here accept debit cards, although I think the UK in general has been a…

The author (who seems to use his cards in Germany) is most likely confused. The problem is not with debit cards vs. credit cards. Every terminal I've seen in Austria and Germany supports both (but see below). The problem is that Austrians, Germans, and perhaps other EU countries think that Mastercard/Visa means credit card, and Maestro/Giro/whatever means debit card. This is exacerbated by the fact that until very re…

He specifically mentions that he's in the Netherlands in the article.

And based on the writing in the "banking standards" paragraph it appears he understands the difference between debit / credit cards and that banking network they operate on doesn't determine the type of finance they provide

Re: Money Horror

#55

Post by CaptArmchair »

rsync wrote: post #3

"Yes transactions are paused on the weekend. Thats like google would do a break on the weekend." This is correct. The correct response to payment and settlement "pauses" for silly things like weekends and holidays is derision. Contempt. Ridicule. These settlement timelines are based literally on horse and buggy schedules from the 1800s. They have no place in our modern workflow.

When you use a credit card, it's not just a single transaction that happens between you and the merchant. There are 2 more stakeholders here: your bank and the credit card company. In the background, that's a lot of transactions that happen at different times. So, not everyone gets their money at the same time.

This creates risks: as debts are created and exchanged, it may be that that debt won't be settled (i.e. maybe you went bankrupt). So, that's why clearing houses exist:

https://en.wikipedia.org/wiki/Clearing_house_(finance)

During the 1970's, automated clearing houses became a thing:

https://en.wikipedia.org/wiki/Automated_clearing_house

These don't always process transactions in real time, but in batches for various complex reasons. Legal framework and compliancy being one of them, reducing risks was another reason.

In the U.S., the legal framework was recently changed to allow processing within the same business day:

https://www.investopedia.com/terms/a/ach.asp

That network of clearing houses is not just used for domestic debts, it's also used for large financial transactions. These are institutions that are build on immense amounts of trust. And so, simply re-tooling them to be "instantly responsive" towards someone who wants to buy pop from a vending machine? That's not gonna happen.

The author assumes that cryptocurrency is going to change this because "open source". Well, no. Not really.

First, buying from your own crypto wallet is more like debet then it is credit. Second, being able to take out a small cryptocoin credit or loans has little to do with the fact that a blockchain prevents you from spending the same coin twice.

The idea of credit is that you take out a debt you'll settle up at a later time, i.e. 3 weeks later. There's still the issue of risk and you still need to do the entire transaction dance done by lenders, merchants and borrower. That's not something cryptocoins make fundamentally can dispense with.

Finally, the author is a student. Large organisations, like higher ed, often offer a local e-wallet solutions that allows payment for everything within their facilities (also barring outsiders from enjoying benefits reserved for organization members such as staff and students). You simply wire money to your account from your bank and your good to go. Another option is... simply asking if that vending machine could be swapped for one that accepts debet cards and cash.

Re: Money Horror

#56

Post by PaulHoule »

LeifCarrotson wrote: post #29
chkaloon wrote: post #19

"Only with a credit card. I am a student, I have no real world use for this kind of card" Yes you do, that vending machine you're standing in front of

You feel the need to take out a short-term loan for your soda purchase? The fact that a debit card isn't considered as good as (and further, that it's not assumed to be better than) a credit card is yet another bit of money horror.

Debit cards are a dumpster fire in my opinion, at least if you own a car.

When you use a debit card to buy gas they put a hold for a few hundred dollars, as if you were filling up the side saddle gas tanks of a huge pickup truck at $6 a gallon instead of filling up a compact. The holds last for days instead of the one minute it takes for me to fill my Honda, or the ten minutes it takes somebody to fill an Escalade.

If it works at all, you can go on a road trip and wind up with enough holds that you have overdraft fees, bouncing checks, fees because you wrote bouncing checks, late fees because of payments that failed, etc.

The "short term loan" from a credit card is not a rip-off, but it means you are laying off risk on them.

If somebody steals your debit card number then they can clean out your bank account and you have little recourse. When I did have my debit card number stolen the bank told me that I had to be careful because they could only change one digit in the number because the rest of it was based on my bank account number.

I told them to turn off debit card transactions on my ATM card.

Re: Money Horror

#57

Post by eterm »

This makes me glad to live in the UK, where it seems to me we might just have the best payments industry in the world.

\* Faster (instant) payments 24/7.

\* All purchase transactions are generally assumed to be debit card, credit cards are never required and very much optional (I don't have a credit card)

\* Contactless payments are instant, easy and completely standard, everything from the corner shop upward has them. You don't need your PIN for less than £30 (£45 quid from next week).

\* A banking industry that is quick to refund anything from any fraud without asking, which makes for a low case of fraud because they pro-actively block odd transactions.

\* Up to £75k insured per bank

I've often heard stories about payments that I just can't relate to because it seems our payment industry is so good. We have no need for bitcoin and the trendy start-ups don't even gain much traction because the banks own apps are normally just as good anyway.

Re: Money Horror

#58

Post by tener »

orev wrote: post #35
LeifCarrotson wrote: post #29

Earlier quoted context omitted.

You feel the need to take out a short-term loan for your soda purchase? The fact that a debit card isn't considered as good as (and further, that it's not assumed to be better than) a credit card is yet another bit of money horror.

The way the credit card system is setup is what it is. If you know what you are doing you can take advantage of it. One should almost never use a debit card, as if it gets compromised the money comes directly out of your account and the banks don’t have much incentive to help too much. With a credit card, that stolen money belongs to the bank, and therefore they have a big incentive to get it back, so using this kind…

Perhaps this is regional thing, but in my country I get exact same level of protection for both credit and debit cards. Regulatory pressure can be useful at times.

Re: Money Horror

#59

Post by Pt_ »

SQueeeeeL wrote: post #53
Pt_ wrote: post #47

Earlier quoted context omitted.

Surely anomaly detection is better done by a machine? I guess there's a certain level of human "intuition" about these things but is this not what most banks anti-fraud systems do already?

I imagine the problem with this is it becomes a game-able system if it's purely automated. Sort of like the stereotype in Law and Order where they always pay hitmen $9,999 because "the IRS only monitors transfers over 10k."

I think its game-able automated or not. Fraud exists today and is playing on these exact systems.

Re: Money Horror

#60

Post by kevinventullo »

SQueeeeeL wrote: post #53
Pt_ wrote: post #47

Earlier quoted context omitted.

Surely anomaly detection is better done by a machine? I guess there's a certain level of human "intuition" about these things but is this not what most banks anti-fraud systems do already?

I imagine the problem with this is it becomes a game-able system if it's purely automated. Sort of like the stereotype in Law and Order where they always pay hitmen $9,999 because "the IRS only monitors transfers over 10k."

On the other hand, maybe this is a kind of perverse benefit of opaque ML systems.
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