5 ms·

In case anyone didn't catch what this actually costs, the answer is: 1.5-2%, which is the rate you could get cash back (or airline miles/etc) with good credit.

by ac29 11y ago

In case anyone didn't catch what this actually costs, the answer is: 1.5-2%, which is the rate you could get cash back (or airline miles/etc) with good credit. Because this service draws directly from your bank account, and takes what would otherwise be your rewards from the credit card fees their banking partners charge, it provides a nice business model for them at the cost of you getting 0% rewards back. Not worth it, in my opinion.

AznHisoka 11y ago
In the footer it also says its accepted everywhere Visa debit cards are, NOT credit cards. That's a huge caveat because debit cards aren't as universally accepted as credit cards.
- loeg 11y ago
  You can pretty much universally run a debit card as a credit card. It's the other way around that's expensive.
  - dcosson 11y ago
    A merchant can choose to decline prepaid debit cards, e.g. here's how the braintree api exposes it[0]. I assume that's what this shows up as. [0] https://developers.braintreepayments.com/reference/response/credit-card/ruby#prepaid https://developers.braintreepayments.com/reference/response/...
    - akhatri_aus 11y ago
      A prepaid debit card is different from a plain old 'debit card'. The debit card is accepted everywhere a credit card is (as long as it says Visa or Mastercard on it). In fact a few places accept debit cards but do not accept credit cards as fees with debit cards can be lower. There's just a handful of subscription merchants that don't take prepaid debit cards.
      - URSpider94 11y ago
        The problem comes with things like hotels and car rentals. For example, I'm staying in a hotel tonight, and they just authorized my credit card for $200 more than the nightly rate to cover incidentals (the notice came to my iPhone). If that were a debit card (or Privacy), they would have to pull the full amount from my checking account right away, and it could be days or weeks until they put it back. Since it's a credit card, they'll release the hold when the final bill comes through in a day or two, and I'll never know the difference.
        akhatri_aus 11y ago
        You can put a hold on a debit card too without pulling the entire amount (they run an authorisation and release it immediately) I've used it to rent cars and hotel rooms, they do a check but the amount isn't 'blocked' off. In effect your statement looks just like a credit card.. There's absolutely no difference except with a credit card it's a borrowed balance. I'm not too aware of how cards are in the US but generally in Europe & Australia (afaik) they're this way. Do cheque cards have mastercard/visa on them in the US (What about maestro/electron)?
        URSpider94 11y ago
        US merchants don't do this. Most of the ones who take a deposit (hotels, car rental) have signs at the counter warning that they may put a substantial hold on your cash if you use a debit card, which won't be released for quite a while. You are right -- if the card is bank-issued, then they can simply place a hold and release it without money flowing. With Privacy, it would seem they will need to actually pull the cash to be able to ensure that its there when the final charge comes through. Curious to see how this plays out.
        fluxquanta 11y ago
        >US merchants don't do this. Most of the ones who take a deposit (hotels, car rental) have signs at the counter warning that they may put a substantial hold on your cash if you use a debit card, which won't be released for quite a while. My company used to send us on work related trips which were paid for in advance, but relied on us to provide our own cards at the hotels for incidentals. After a few (presumably less financially stable) employees used debit cards with low balances to check into hotels (effectively leaving them with no money during their stay), this policy changed so now the company credit card is used for hotel check-ins. I personally hate the new policy because I have good credit and like getting room service, and for some reason I find it kind of emasculating that I'm not allowed to use my own card.
  - dave2000 11y ago
    Yes but I want the protection of a credit card. In the uk at least you get a big advantage legally buying things on a credit card.
- baby 11y ago
  What? I don't have a credit card and I haven't run in any problem so far
seanp2k2 11y ago
Esp when Citi offers this on the DoubleCash card, which is 2% (though the experience of the Flash-based or desktop-app-based Citi number generator combined with their lack of support for require-every-time 2FA make it a lot less than ideal)
mtgx 11y ago
You could think of it like that, or you could think of it as a cheaper Paypal with better privacy. I for one don't care for the puny rewards which are much smaller than the value of the data they get from me anyway.
pcooney10 11y ago
Yea I'd agree with that. Was bummed this couldn't be set up with a credit card, and didn't bother asking after realizing it'd break their business model. All online transactions are processed as credit - even if the card used is debit/prepaid debit - and the card issuer earns 1-3% for each transaction. Some of this fee is rebated back to people through cashback/travel rewards cards, but I am assuming Privacy & Customer's Bank will be using it to fund their business. Pretty cool idea! And even cooler website!! Would be interesting to see some sort of loyalty/rewards program implemented, although that doesn't really jive with your anti-marketing pitch. I'll be sticking with my credit cards for now. They're worth a lot more than their rewards, and it's a shame so many people choose to stick with debit...
brokentone 11y ago
They actually get one better. Whereas a credit card takes 1-3%, gives you 1-2%, makes $$ on various partnerships for redemption, sell your data for additional $$, and potentially charges you yearly, monthly, or interest fees. The CC ALSO extends you 1 month liquidity for free. These guys directly debit you, so they have to float nothing, they have no fee on the ACH, and they keep the 1-3% merchant fee. That said... avoiding some of those earlier issues of fees and data selling, this seems kinda cool.
- panabee 11y ago
  can you please elaborate on why they don't have to pay ACH fees?
geoelectric 11y ago
Don't forget no warranty doubling, no theft/loss protection, no price increase protection, none of the usual benefits for a decent credit card.

by ac29 11y ago

AznHisoka 11y ago

In the footer it also says its accepted everywhere Visa debit cards are, NOT credit cards. That's a huge caveat because debit cards aren't as universally accepted as credit cards.

loeg 11y ago
You can pretty much universally run a debit card as a credit card. It's the other way around that's expensive.
- dcosson 11y ago
  A merchant can choose to decline prepaid debit cards, e.g. here's how the braintree api exposes it[0]. I assume that's what this shows up as. [0] https://developers.braintreepayments.com/reference/response/credit-card/ruby#prepaid https://developers.braintreepayments.com/reference/response/...
  - akhatri_aus 11y ago
    A prepaid debit card is different from a plain old 'debit card'. The debit card is accepted everywhere a credit card is (as long as it says Visa or Mastercard on it). In fact a few places accept debit cards but do not accept credit cards as fees with debit cards can be lower. There's just a handful of subscription merchants that don't take prepaid debit cards.
    - URSpider94 11y ago
      The problem comes with things like hotels and car rentals. For example, I'm staying in a hotel tonight, and they just authorized my credit card for $200 more than the nightly rate to cover incidentals (the notice came to my iPhone). If that were a debit card (or Privacy), they would have to pull the full amount from my checking account right away, and it could be days or weeks until they put it back. Since it's a credit card, they'll release the hold when the final bill comes through in a day or two, and I'll never know the difference.
      - akhatri_aus 11y ago
        You can put a hold on a debit card too without pulling the entire amount (they run an authorisation and release it immediately) I've used it to rent cars and hotel rooms, they do a check but the amount isn't 'blocked' off. In effect your statement looks just like a credit card.. There's absolutely no difference except with a credit card it's a borrowed balance. I'm not too aware of how cards are in the US but generally in Europe & Australia (afaik) they're this way. Do cheque cards have mastercard/visa on them in the US (What about maestro/electron)?
        URSpider94 11y ago
        US merchants don't do this. Most of the ones who take a deposit (hotels, car rental) have signs at the counter warning that they may put a substantial hold on your cash if you use a debit card, which won't be released for quite a while. You are right -- if the card is bank-issued, then they can simply place a hold and release it without money flowing. With Privacy, it would seem they will need to actually pull the cash to be able to ensure that its there when the final charge comes through. Curious to see how this plays out.
        fluxquanta 11y ago
        >US merchants don't do this. Most of the ones who take a deposit (hotels, car rental) have signs at the counter warning that they may put a substantial hold on your cash if you use a debit card, which won't be released for quite a while. My company used to send us on work related trips which were paid for in advance, but relied on us to provide our own cards at the hotels for incidentals. After a few (presumably less financially stable) employees used debit cards with low balances to check into hotels (effectively leaving them with no money during their stay), this policy changed so now the company credit card is used for hotel check-ins. I personally hate the new policy because I have good credit and like getting room service, and for some reason I find it kind of emasculating that I'm not allowed to use my own card.
- dave2000 11y ago
  Yes but I want the protection of a credit card. In the uk at least you get a big advantage legally buying things on a credit card.
baby 11y ago
What? I don't have a credit card and I haven't run in any problem so far

seanp2k2 11y ago

Esp when Citi offers this on the DoubleCash card, which is 2% (though the experience of the Flash-based or desktop-app-based Citi number generator combined with their lack of support for require-every-time 2FA make it a lot less than ideal)

mtgx 11y ago

You could think of it like that, or you could think of it as a cheaper Paypal with better privacy. I for one don't care for the puny rewards which are much smaller than the value of the data they get from me anyway.

pcooney10 11y ago

Yea I'd agree with that. Was bummed this couldn't be set up with a credit card, and didn't bother asking after realizing it'd break their business model. All online transactions are processed as credit - even if the card used is debit/prepaid debit - and the card issuer earns 1-3% for each transaction. Some of this fee is rebated back to people through cashback/travel rewards cards, but I am assuming Privacy & Customer's Bank will be using it to fund their business. Pretty cool idea! And even cooler website!! Would be interesting to see some sort of loyalty/rewards program implemented, although that doesn't really jive with your anti-marketing pitch. I'll be sticking with my credit cards for now. They're worth a lot more than their rewards, and it's a shame so many people choose to stick with debit...

brokentone 11y ago

They actually get one better. Whereas a credit card takes 1-3%, gives you 1-2%, makes $$ on various partnerships for redemption, sell your data for additional $$, and potentially charges you yearly, monthly, or interest fees. The CC ALSO extends you 1 month liquidity for free. These guys directly debit you, so they have to float nothing, they have no fee on the ACH, and they keep the 1-3% merchant fee. That said... avoiding some of those earlier issues of fees and data selling, this seems kinda cool.

panabee 11y ago
can you please elaborate on why they don't have to pay ACH fees?

geoelectric 11y ago

Don't forget no warranty doubling, no theft/loss protection, no price increase protection, none of the usual benefits for a decent credit card.