9 ms·

I've only just heard of this, but it looks like it's an attempt by lots of big European banks to beat Mastercard & Visa at their own game! It says they're buil

I've only just heard of this, but it looks like it's an attempt by lots of big European banks to beat Mastercard & Visa at their own game! It says they're building on EU Instant Payments, which has been standard for a while, and for supported banks (a good percentage now, and presumably all 30 banks listed here) means bank-to-bank euro transfers are free & take less than 10 seconds, 24/7. See https://www.ecb.europa.eu/paym/integration/retail/instant_payments/html/index.en.html https://www.ecb.europa.eu/paym/integration/retail/instant_pa.... Sounds like they're planning to produce card infrastructure on top of that, so with an EPI-supporting merchant and an EPI consumer card, a card transaction is implemented directly as an instant bank transfer, with no traditional credit card companies involved. Oh and they're proposing to support p2p in the same way too. I guess that's more like competing with Revolut et al, since you can't really sign up to process Visa/Mastercard as an individual today anyway. Does anybody know any more background on this? I have no idea about the seriousness of the proposal or anything at all, but it sounds like a big deal if they can pull that off.

bobthepanda 5y ago
What I’m curious about is, how does credit card fraud get handled in the EU? At least in the US that kind of fraud is the bank’s problem, which is why I prefer using credit over debit.
- athenot 5y ago
  In EU, in many cases you can go below zero in your checking account. So there's some buffer in case things go wrong.
- pimterry 5y ago
  It's reduced as a problem I think, and in general credit cards are certainly far less popular than in the US. I suspect fraud is less of an issue because accepting signatures for card purchases hasn't been common for at least a decade (you need the PIN for all spending above the contactless limit - about 30 euros in most countries) and PSD2 (mandatory for transactions since 2020) requires 2FA authentication for most online transactions too. See https://en.wikipedia.org/wiki/Strong_customer_authentication https://en.wikipedia.org/wiki/Strong_customer_authentication. That means copying or stealing a debit card, or capturing entered online card details by themselves won't get you very far in the EU, which removes a lot of classic fraud. In the remaining cases though, I have no idea!
  - larkost 5y ago
    My impression was that because of the PIN used it was a lot riskier for the consumer with European cards: the credit card companies essentially said "the PIN was correct, so it could not have been fraud" so the default assumption was no fraud. In the U.S. the system favors the consumer, so the merchant has to actively prove that it was not fraud (by default, this is definitely not blindly applied). The signature part is one part of this, but the U.S. actually has laws in place to push this, and that largely has driven the non-PIN policy in the U.S. (since most of the anti-fraud pressure is on other parts of the system).
    - 8ytecoder 5y ago
      Yeah the PIN merely shifts the responsibility while adding a small additional protection. This model also adds a lot more friction online - you need to enter the pin again and it’s usually different from the offline pin. Overall, my parents’ generation simply can’t deal with all of this.
    - jmkerr 5y ago
      The customer still pays for fraud, one way or the other. So why not aim to prevent fraud in the first place by using a simple and effective second factor to mere possession of the card?
      - argomo 5y ago
        (1) Most people would rather pay the cost of fraud averaged across all accounts than suffer the risk of unlimited fraud against their own account. (2) Putting the risk on credit card companies highly incentives them to fight fraud. This is ideal because they make the money and they are best positioned to fight it. (3) Your premise is false to begin with. Higher fraud, like taxes, is payed for by some combination of the customers, the employees, and the owners (though actually it's more complicated than that due to contractual agreements: I believe merchants bear the penalty so we get recursive). Even when the customer pays exclusively, there's a propagation delay that hits somebody else's wallet in the interim. (E.g., merchants don't raise prices immediately everytime fraud/taxes/wages increase.) It's a mistake to think of this as a mere transitory effect rather than a structural advantage that favors the consumer.
- m12k 5y ago
  I think the solution is their requirement of 2FA for credit card payments[1]. Basically instead of this massive, expensive system to deal with fraud when it happens, and everyone paying banks to sometimes eat the cost of that, make it not happen in the first place. Not sure how successful it is, but it seems like the right idea. [1] https://en.wikipedia.org/wiki/Strong_customer_authentication https://en.wikipedia.org/wiki/Strong_customer_authentication
  - seppel 5y ago
    For people like me "make it not happen in the first place" means online payments using credit card are no longer happening.
    - floitsch 5y ago
      Credit card payments in Europe now have to have 2-factor authentication. This makes fraud much harder, while still allowing online payments with credit cards. It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
      - afiori 5y ago
        > Credit card payments in Europe now have to have 2-factor authentication. > This makes fraud much harder, while still allowing online payments with credit cards. As an European I can confirm, > It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there. Nope, sadly. Amazon apparently can magically skip the 2FA most/all times. My guess is that amazon has deals with banks to streamline the process, but I don't really know
    - m12k 5y ago
      Could you elaborate? Did SCA somehow drive you to stop accepting credit card payments? Are you using a payment provider that doesn't offer support for 2FA?
- Pasorrijer 5y ago
  As a Canadian, the only time I've had a credit card stolen is in the US. Not saying credit card doesn't happen in Canada, it does, but it's definitely a much, much bigger problem in the US. Almost like the banking system isn't adopting measures such as chip cards to combat theft fast enough.
  - treve 5y ago
    USA banking is usually a few years behind Canada, and 10 years behind Europe when it comes to adopting new technology. In Europe the last time I saw a cheque was in the early 90's, and they are still used in Canada for things like rent. I also remember traveling to the states in 2016 with my tap-enabled credit card, blowing people's minds in shops. All their equipment was ready for tap, but no US cards had it yet. It also surprised me that things like Venmo have a reason to exist! I don't think many Americans know how bad they have it terms of banking tech.
    - adventured 5y ago
      I never cease to be amused by the wild exaggerations of foreigners. How bad we have it. Comeon, just stop it. So five years ago, you still had to enter a pin / swipe, you couldn't just tap. We've got it so bad. So bad! It's the dark ages here, circa five years ago. > my tap-enabled credit card, blowing people's minds in shops Yeah right. The iPhone had been around for nearly a decade, but oh wow tapping credit cards to blow minds. > It also surprised me that things like Venmo have a reason to exist! Crazy stuff! But like you said, we've got it so bad. An easy to use software service exists to transfer funds, incredible. The suffering. I feel dread just writing this comment and thinking about it.
      - gertrunde 5y ago
        I think the Venmo comment may have been misunderstood. The reason that Venmo is seen as an unusual, and somewhat superfluous concept, is that the functionality is just expected to exist as part of every financial app, either legacy/mainstream bank or trendy new fintech upstart - it's really not anything special enough to require a separate system.
- dkarp 5y ago
  Like others say, maybe fraud is less common, but personally I use a credit card 99% of the time. Most banks will refund fraud in most cases even on a debit card here (UK)
  - systemvoltage 5y ago
    What’s in it for the bank? How does it recover these costs? Do they charge monthly fee?
    - dtech 5y ago
      They usually charge a small monthly fee if you want a credit card. I assume successful fraud is just an operational cost like all the others.
      - etothepii 5y ago
        In the UK credit cards (as with almost all bank accounts) are usually completely free if you pay the balance in full every month. New accounts frequently come with years of 0% interest on balance transfers. They are also required by law to be jointly and severally liable for the completion of your purchase contracts with the seller if between £100 and £40k.
    - M2Ys4U 5y ago
      With chargebacks, the customer's bank will (attempt to) reclaim the money from the vendor's bank. For credit cards the credit card issuer also shares legal liability with the vendor for purchases over £100. https://www.ukfinance.org.uk/area-of-expertise/cards/chargeback-and-section-75 https://www.ukfinance.org.uk/area-of-expertise/cards/chargeb...
- seppel 5y ago
  We handle it by making online credit card payments super annoying (you have to login into our bank account and verify it with a second factor), so most people I know stopped using credit card payments.
  - ko27 5y ago
    I get a push notification and then use my finger scanner. That's it. Hardly annoying. I think this is a new protocol and all banks will soon migrate to this.
- dtech 5y ago
  credit cards are used minimally in Europe, cash and debit cars are the overwhelming majority of transactions. There's no difference in fraud protection between debit and credit cards in Europe, at least on my bank. Fraud is refunded following the same rules.
- Bayart 5y ago
  Carding is a non-issue in the EU, at least most places I'm aware of. Between PIN codes that are required everywhere and 2FA that's universal for direct payments on the Internet, there's just not much value there. Accounts with registered payment information are probably worth much more (Paypal). Losing a card isn't very stressful here.
- jonkoops 5y ago
  We just don't use credit cards, in fact many countries have their own payments systems of varying popularity. The only time I need to reach for a credit card is when interacting with US companies. IMHO credit cards and the systems around them are a remnant of the past. The US just hasn't caught up with the rest of the world yet.
  - kmlx 5y ago
    > are a remnant of the past weird. i'm european, live in europe, only use credit cards. either visa or amex. they offer better protection when buying something, protection against scammers, plus added benefits (from travel to cashback etc). it also contributes to my credit score. if anything i think europe is actually craving a lot more credit, see klarna as a good example.
    - jopsen 5y ago
      In Denmark we mostly use local debit card, which also duals as VISA debit card when going international. But using a credit card like MasterCard or VISA in Denmark usually incurs a fee with most merchants. As for protection, I think you still have months to report fraud. Although you should always report it as soon as discovered.
    - afiori 5y ago
      My guess is that many countries in Europe (all 3 I have been in for significant time) have their own internal payment circuit. I two of those debit cards also worked on visa/mastercard, while in 1 (the netherlands) there was a much stronger separation (most stores only accepted the national circuit, bigger stores sometimes had a special register you might have to ask to use)
  - ksec 5y ago
    Well It used to be something like 95% of EUR uses Debit Card ( Visa or Master Debit, it doesn't matter but Debit Card not Credit Card ). And 95% of US were Credit Card. 2008 changes a few things and somehow Debit Card in US caught on. Credit Card in EUR increased as well. I think Debit Card now represent something like 40%+ of transaction in US. Credit Card in EUR is still comparatively small, but much larger than pre 2010s mostly due to company spending.
pacman2 5y ago
"I've only just heard of this, but it looks like it's an attempt by lots of big European banks to beat Mastercard & Visa at their own game!" Not really. Europe has Vpay and Maestro/EC. Online payments can be done in some countries by "Sofort" https://www.klarna.com/pay-now/ https://www.klarna.com/pay-now/ They may just want to standardize it for all of Europe. In general, US banking often looks like stone age compared with Europe. Alo ne a money wire is annoying. IBAN payments are free. I think they charge a small fee for instant money wires.
- messe 5y ago
  > Europe has Vpay and Maestro/EC ...owned by Visa and Mastercard?
- zaarn 5y ago
  Fee for instant transfers is optional, my bank charges me 0€ during normal banking hours and 0,10€ outside banking hours.
- mrweasel 5y ago
  Note that depending on country, Klarna and similar providers require you to pay them using a debit card. It specifically cannot be a credit card, because that would mean incurring new debt to cover existing debt.
- crote 5y ago
  Don't forget iDeal! It's only used in The Netherlands, but unlike Sofort there is no intermediary company. Basically, a merchant redirects you to your own bank's website. You have to log in, but all transaction details are already fixed. After confirmation, you're redirected back to the merchant and the transaction is complete.
the-dude 5y ago
I wonder what they'll do on weekends. Because Dutch banks for sure still have 'weekends'. I suspect it will be 24/5.
- dtech 5y ago
  Most Dutch banks have instant payments in between them for a couple of years [1]. Iirc I recently transferred money from ING to ABN and it was instantaneous in the weekend. [1] https://www.rtlnieuws.nl/tech/artikel/4843376/instant-payment-banken-geld-overmaken-werkdag-5-seconden-betaalvereniging https://www.rtlnieuws.nl/tech/artikel/4843376/instant-paymen...
  - the-dude 5y ago
    One of the things I am aware of is the payout of the PIN-revenue to retailers, which are still not done in the weekends AFAIK. The article mentions this, some Danish businesses switched away from PIN to direct payments, to get the funds immediately.
- hestefisk 5y ago
  It’s 24/7/365 like other instant payment systems.
- toyg 5y ago
  UK banks also have weekends, but it's no big deal. Transaction are queued up and settled on Monday morning, but most systems know about them anyway; if your credit limit is 1000 and you pay 900 on a Saturday, your official balance is still 1000 but your available funds are shown as 100.
marcosdumay 5y ago
Why do they need a card infrastructure? Since Brazil implemented our free instant interbank transfers (it's called PIX), people have been using it for all kinds of stuff that previously required a credit card. The seller simply asks the buyer to tag the transaction, and reads the tag on his phone when the buyer says the payment is complete.
- afiori 5y ago
  More than an card infrastructure it might be simply an infrastructure, now even between banks that support instant SEPA transfers it is not really usable to buy things with it.

bobthepanda 5y ago

What I’m curious about is, how does credit card fraud get handled in the EU? At least in the US that kind of fraud is the bank’s problem, which is why I prefer using credit over debit.

athenot 5y ago
In EU, in many cases you can go below zero in your checking account. So there's some buffer in case things go wrong.
pimterry 5y ago
It's reduced as a problem I think, and in general credit cards are certainly far less popular than in the US. I suspect fraud is less of an issue because accepting signatures for card purchases hasn't been common for at least a decade (you need the PIN for all spending above the contactless limit - about 30 euros in most countries) and PSD2 (mandatory for transactions since 2020) requires 2FA authentication for most online transactions too. See https://en.wikipedia.org/wiki/Strong_customer_authentication https://en.wikipedia.org/wiki/Strong_customer_authentication. That means copying or stealing a debit card, or capturing entered online card details by themselves won't get you very far in the EU, which removes a lot of classic fraud. In the remaining cases though, I have no idea!
- larkost 5y ago
  My impression was that because of the PIN used it was a lot riskier for the consumer with European cards: the credit card companies essentially said "the PIN was correct, so it could not have been fraud" so the default assumption was no fraud. In the U.S. the system favors the consumer, so the merchant has to actively prove that it was not fraud (by default, this is definitely not blindly applied). The signature part is one part of this, but the U.S. actually has laws in place to push this, and that largely has driven the non-PIN policy in the U.S. (since most of the anti-fraud pressure is on other parts of the system).
  - 8ytecoder 5y ago
    Yeah the PIN merely shifts the responsibility while adding a small additional protection. This model also adds a lot more friction online - you need to enter the pin again and it’s usually different from the offline pin. Overall, my parents’ generation simply can’t deal with all of this.
  - jmkerr 5y ago
    The customer still pays for fraud, one way or the other. So why not aim to prevent fraud in the first place by using a simple and effective second factor to mere possession of the card?
    - argomo 5y ago
      (1) Most people would rather pay the cost of fraud averaged across all accounts than suffer the risk of unlimited fraud against their own account. (2) Putting the risk on credit card companies highly incentives them to fight fraud. This is ideal because they make the money and they are best positioned to fight it. (3) Your premise is false to begin with. Higher fraud, like taxes, is payed for by some combination of the customers, the employees, and the owners (though actually it's more complicated than that due to contractual agreements: I believe merchants bear the penalty so we get recursive). Even when the customer pays exclusively, there's a propagation delay that hits somebody else's wallet in the interim. (E.g., merchants don't raise prices immediately everytime fraud/taxes/wages increase.) It's a mistake to think of this as a mere transitory effect rather than a structural advantage that favors the consumer.
m12k 5y ago
I think the solution is their requirement of 2FA for credit card payments[1]. Basically instead of this massive, expensive system to deal with fraud when it happens, and everyone paying banks to sometimes eat the cost of that, make it not happen in the first place. Not sure how successful it is, but it seems like the right idea. [1] https://en.wikipedia.org/wiki/Strong_customer_authentication https://en.wikipedia.org/wiki/Strong_customer_authentication
- seppel 5y ago
  For people like me "make it not happen in the first place" means online payments using credit card are no longer happening.
  - floitsch 5y ago
    Credit card payments in Europe now have to have 2-factor authentication. This makes fraud much harder, while still allowing online payments with credit cards. It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
    - afiori 5y ago
      > Credit card payments in Europe now have to have 2-factor authentication. > This makes fraud much harder, while still allowing online payments with credit cards. As an European I can confirm, > It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there. Nope, sadly. Amazon apparently can magically skip the 2FA most/all times. My guess is that amazon has deals with banks to streamline the process, but I don't really know
  - m12k 5y ago
    Could you elaborate? Did SCA somehow drive you to stop accepting credit card payments? Are you using a payment provider that doesn't offer support for 2FA?
Pasorrijer 5y ago
As a Canadian, the only time I've had a credit card stolen is in the US. Not saying credit card doesn't happen in Canada, it does, but it's definitely a much, much bigger problem in the US. Almost like the banking system isn't adopting measures such as chip cards to combat theft fast enough.
- treve 5y ago
  USA banking is usually a few years behind Canada, and 10 years behind Europe when it comes to adopting new technology. In Europe the last time I saw a cheque was in the early 90's, and they are still used in Canada for things like rent. I also remember traveling to the states in 2016 with my tap-enabled credit card, blowing people's minds in shops. All their equipment was ready for tap, but no US cards had it yet. It also surprised me that things like Venmo have a reason to exist! I don't think many Americans know how bad they have it terms of banking tech.
  - adventured 5y ago
    I never cease to be amused by the wild exaggerations of foreigners. How bad we have it. Comeon, just stop it. So five years ago, you still had to enter a pin / swipe, you couldn't just tap. We've got it so bad. So bad! It's the dark ages here, circa five years ago. > my tap-enabled credit card, blowing people's minds in shops Yeah right. The iPhone had been around for nearly a decade, but oh wow tapping credit cards to blow minds. > It also surprised me that things like Venmo have a reason to exist! Crazy stuff! But like you said, we've got it so bad. An easy to use software service exists to transfer funds, incredible. The suffering. I feel dread just writing this comment and thinking about it.
    - gertrunde 5y ago
      I think the Venmo comment may have been misunderstood. The reason that Venmo is seen as an unusual, and somewhat superfluous concept, is that the functionality is just expected to exist as part of every financial app, either legacy/mainstream bank or trendy new fintech upstart - it's really not anything special enough to require a separate system.
dkarp 5y ago
Like others say, maybe fraud is less common, but personally I use a credit card 99% of the time. Most banks will refund fraud in most cases even on a debit card here (UK)
- systemvoltage 5y ago
  What’s in it for the bank? How does it recover these costs? Do they charge monthly fee?
  - dtech 5y ago
    They usually charge a small monthly fee if you want a credit card. I assume successful fraud is just an operational cost like all the others.
    - etothepii 5y ago
      In the UK credit cards (as with almost all bank accounts) are usually completely free if you pay the balance in full every month. New accounts frequently come with years of 0% interest on balance transfers. They are also required by law to be jointly and severally liable for the completion of your purchase contracts with the seller if between £100 and £40k.
  - M2Ys4U 5y ago
    With chargebacks, the customer's bank will (attempt to) reclaim the money from the vendor's bank. For credit cards the credit card issuer also shares legal liability with the vendor for purchases over £100. https://www.ukfinance.org.uk/area-of-expertise/cards/chargeback-and-section-75 https://www.ukfinance.org.uk/area-of-expertise/cards/chargeb...
seppel 5y ago
We handle it by making online credit card payments super annoying (you have to login into our bank account and verify it with a second factor), so most people I know stopped using credit card payments.
- ko27 5y ago
  I get a push notification and then use my finger scanner. That's it. Hardly annoying. I think this is a new protocol and all banks will soon migrate to this.
dtech 5y ago
credit cards are used minimally in Europe, cash and debit cars are the overwhelming majority of transactions. There's no difference in fraud protection between debit and credit cards in Europe, at least on my bank. Fraud is refunded following the same rules.
Bayart 5y ago
Carding is a non-issue in the EU, at least most places I'm aware of. Between PIN codes that are required everywhere and 2FA that's universal for direct payments on the Internet, there's just not much value there. Accounts with registered payment information are probably worth much more (Paypal). Losing a card isn't very stressful here.
jonkoops 5y ago
We just don't use credit cards, in fact many countries have their own payments systems of varying popularity. The only time I need to reach for a credit card is when interacting with US companies. IMHO credit cards and the systems around them are a remnant of the past. The US just hasn't caught up with the rest of the world yet.
- kmlx 5y ago
  > are a remnant of the past weird. i'm european, live in europe, only use credit cards. either visa or amex. they offer better protection when buying something, protection against scammers, plus added benefits (from travel to cashback etc). it also contributes to my credit score. if anything i think europe is actually craving a lot more credit, see klarna as a good example.
  - jopsen 5y ago
    In Denmark we mostly use local debit card, which also duals as VISA debit card when going international. But using a credit card like MasterCard or VISA in Denmark usually incurs a fee with most merchants. As for protection, I think you still have months to report fraud. Although you should always report it as soon as discovered.
  - afiori 5y ago
    My guess is that many countries in Europe (all 3 I have been in for significant time) have their own internal payment circuit. I two of those debit cards also worked on visa/mastercard, while in 1 (the netherlands) there was a much stronger separation (most stores only accepted the national circuit, bigger stores sometimes had a special register you might have to ask to use)
- ksec 5y ago
  Well It used to be something like 95% of EUR uses Debit Card ( Visa or Master Debit, it doesn't matter but Debit Card not Credit Card ). And 95% of US were Credit Card. 2008 changes a few things and somehow Debit Card in US caught on. Credit Card in EUR increased as well. I think Debit Card now represent something like 40%+ of transaction in US. Credit Card in EUR is still comparatively small, but much larger than pre 2010s mostly due to company spending.

pacman2 5y ago

"I've only just heard of this, but it looks like it's an attempt by lots of big European banks to beat Mastercard & Visa at their own game!" Not really. Europe has Vpay and Maestro/EC. Online payments can be done in some countries by "Sofort" https://www.klarna.com/pay-now/ https://www.klarna.com/pay-now/ They may just want to standardize it for all of Europe. In general, US banking often looks like stone age compared with Europe. Alo ne a money wire is annoying. IBAN payments are free. I think they charge a small fee for instant money wires.

messe 5y ago
> Europe has Vpay and Maestro/EC ...owned by Visa and Mastercard?
zaarn 5y ago
Fee for instant transfers is optional, my bank charges me 0€ during normal banking hours and 0,10€ outside banking hours.
mrweasel 5y ago
Note that depending on country, Klarna and similar providers require you to pay them using a debit card. It specifically cannot be a credit card, because that would mean incurring new debt to cover existing debt.
crote 5y ago
Don't forget iDeal! It's only used in The Netherlands, but unlike Sofort there is no intermediary company. Basically, a merchant redirects you to your own bank's website. You have to log in, but all transaction details are already fixed. After confirmation, you're redirected back to the merchant and the transaction is complete.

the-dude 5y ago

I wonder what they'll do on weekends. Because Dutch banks for sure still have 'weekends'. I suspect it will be 24/5.

dtech 5y ago
Most Dutch banks have instant payments in between them for a couple of years [1]. Iirc I recently transferred money from ING to ABN and it was instantaneous in the weekend. [1] https://www.rtlnieuws.nl/tech/artikel/4843376/instant-payment-banken-geld-overmaken-werkdag-5-seconden-betaalvereniging https://www.rtlnieuws.nl/tech/artikel/4843376/instant-paymen...
- the-dude 5y ago
  One of the things I am aware of is the payout of the PIN-revenue to retailers, which are still not done in the weekends AFAIK. The article mentions this, some Danish businesses switched away from PIN to direct payments, to get the funds immediately.
hestefisk 5y ago
It’s 24/7/365 like other instant payment systems.
toyg 5y ago
UK banks also have weekends, but it's no big deal. Transaction are queued up and settled on Monday morning, but most systems know about them anyway; if your credit limit is 1000 and you pay 900 on a Saturday, your official balance is still 1000 but your available funds are shown as 100.

marcosdumay 5y ago

Why do they need a card infrastructure? Since Brazil implemented our free instant interbank transfers (it's called PIX), people have been using it for all kinds of stuff that previously required a credit card. The seller simply asks the buyer to tag the transaction, and reads the tag on his phone when the buyer says the payment is complete.

afiori 5y ago
More than an card infrastructure it might be simply an infrastructure, now even between banks that support instant SEPA transfers it is not really usable to buy things with it.