7 ms·
You can’t talk about credit cards in isolation without considering the rest of the consumer finance sector in the US. A big part of the reasons credit cards ro
by cactus2093 6y ago
You can’t talk about credit cards in isolation without considering the rest of the consumer finance sector in the US.
A big part of the reasons credit cards rose to such prominence is that the banking and payment rails are so incredibly stupidly designed. The check system and ACH which is the highest volume way that money is sent between people with different banks requires you to give out the secret key every time you make a payment. Plus it takes at least 1-2 days to clear which makes fraud more difficult to deal with.
Interestingly the credit card system also suffers from the first part, your number is printed right there on your card. But they’ve managed to find and/or strong arm ways to reduce fraud on their network, and as a consumer I’m not liable for paying it which is a huge benefit.
The author really lost me at the end though, I don’t see how regulation magically solves everything and they didn’t explain it at all. There is already a ton of regulation in the payment industry. And this comically flimsy underlying system could easily be improved by existing regulators, how about starting with small steps and seeing how that goes? Instead of advocating for throwing out the entire payment system all at once under the very flimsy assumption that the government will do it better.
- vinniejames 6y ago"not liable for paying it," but you're still paying it at the end of the day via fees and increased merchant prices
- ferzul 6y agoif the merchant doesn't charge a creditcard surcharge, and using a credit card is worth 1€ to me, and costs 1.01€/transaction to the merchant. but only 90% of transactions are by credit card. well, then i am better off paying by credit card, since 10% of transactions are subsidising my 1€. (strangely, in australia, card surcharges became normalised just before cash payments fell off a cliff. credit card transactions have also declined; it's visa/mc debit that have skyrocketed.)
- sukilot 6y agoA credit card costs about 3% not 1%. A credit card is a prisoner's dilemma problem where once anyone uses it, the others are pressured to use it also to cut their losses.
- puszczyk 6y agoIn Poland there’s really nice pay-by-link (you’re being redirected to your bank website, log-in, they display the merchants data and amount and you confirm it) and basically all the merchants support it. There’s also BLIK, which is a payment app started by a few banks which is gaining traction. This all is super convenient and easy to use. However, I still prefer to use a credit card, because of the chargeback — the legal protections with credit cards are still higher. —- Edit: about “you’re paying the fees” — maybe, but most of the merchants don’t show different price or don’t charge extra for credit card payment. So why not use the IMHO better option if it costs me the same.