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As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system which have been exported to the rest of the

As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system which have been exported to the rest of the world due to the dominance of the US market. 20 years when I was still living in Germany, hardly anyone had a credit card, while everyone was using automatic payments and electronic wiretransfers. I was very surprised when later (about 13 years ago) a US friend told me that they were still using cheques for most things. I had only touched a cheque maybe 2 or 3 times in my life. Even today many people in Germany still don't have a credit card or if they have one largely use it for travel. Of the people (in Germany) I know, they also never use charge backs on the cards (I suspect many don't even know that you can do it) and instead rely on the court system to get refunds etc..

nixass 4y ago
Why would I use credit card at all? Sure it does help when traveling but not much use for it otherwise
- philip1209 4y ago
  For consumers in the USA, there's a negative take rate. You get cash back if you pay with a card.
- PaulDavisThe1st 4y ago
  Don't think of it as a credit card. Think of it as payment mechanism. It comes with certains costs (to some users, and to all merchants) and also with certain benefits. It also comes with a certain aggregate cost to the whole of society, since essentially prices are increased to cover fees, and then some fraction of the fees are refunded to the wealthiest users (redistribution, just more subtle than taxes).
- JumpCrisscross 4y ago
  > Why would I use credit card at all? Float. If I charge $10k to a card, I get an interest-free loan until the balance has to be paid off. In a zero-rate environment that's meaningless. But even at the 30-day's 2.22% [1], that's almost twenty bucks. I'm probably paying about 1% more for the CC fees, but I can use my card that gives me 1.5% back on everything. [1] https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202208 https://home.treasury.gov/resource-center/data-chart-center/...
  - GekkePrutser 4y ago
    That seems so much hassle for so little. But in Europe credit cards don't give cashback.
    - novok 4y ago
      Your going to pay with some sort of payment card, and credit cards are easy to sign up for and less hassle to use with payments than debit cards, which require you to tap in a pin all the time. Also less fraud protection, etc.
      - GekkePrutser 4y ago
        Here in Europe it's the complete opposite. They're hard to sign up for (banks don't like giving them) and you get registered for the loan which means you will have a harder time getting a mortgage or car loan. The more loans you already have the harder it gets. I heard in the US it works the opposite way. And the pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't. But the same goes for both. And we don't get much additional fraud protection or other benefits like insurance on them that we don't get with our debit cards. I'm surprised the payment systems are so completely opposite. Despite being the same tech from the same companies. The only reason I have one is that my work insists that I get an Amex due to some dirty deal they have. Which is a horrible card for traveling in Europe, nobody accepts it besides hotels. Try getting a taxi in Paris for example.. I also had my personal one as my debit sometimes didn't work but these days it works everywhere.
        JumpCrisscross 4y ago
        > pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't. Across Italy, France, Britain, the Netherlands and Portugal, over the last thirty days, I never had to provide a PIN over contactless. This was true for minor purchases to €5,000+.
- xboxnolifes 4y ago
  Why would I not use a credit card? It's essentially a better debit card in every scenario, except for when paying with a credit card has an additional fee.
  - einpoklum 4y ago
    1. Extra hassle of interaction with a second company other than your bank, extra credentials, tracking balances, etc. etc. When I was living in the Netherlands I had my bank-account-attached Maestro card (or sometimes cash) and that was that. Except when foreign companies needed a credit card. 2. Fees. The whole point of credit cards - for the CC companies of course - is fees.
    - awillen 4y ago
      Pretty much every major bank in the US issues credit cards, so you don't need to deal with a second company. For most consumers, there are credit cards without fees (the CC companies charge fees to merchants, but unless you're dealing with a place that offers a cash discount, that doesn't affect you at all).
    - searchableguy 4y ago
      > Fees. The whole point of credit cards - for the CC companies of course - is fees. On the merchant side, yes. On the consumer side, no. There aren't many examples than Amex which is mostly popular in US charging high fees for their credit cards. Most credit card companies make money from merchant run programs and overdraft & interest on late payments and penalties. They make half of their profit from vulnerable and poor people to pay rewards.
      - einpoklum 4y ago
        Merchants can forward the fees they pay onto you. And, in fact, some definitely do. So cash/debit card price would be X, credit card price might be X + 1% or X + 3 EUR or whatever. Others just refuse to accept credit cards: Direct debit or cash only.
    - 4y ago
- kube-system 4y ago
  1. Free one month loans 2. The law requires banks to pay for any fraud
- skimo8 4y ago
  I use it for cash back. It helps to significantly offset sales tax for me. Yes, the money is always coming from somewhere and arguably products might be cheaper without credit cards. However, it’s the game we’re in, so why leave money on the table?
  - misterprime 4y ago
    cash back *rewards. Please don't use your credit cards for cash advances unless you REALLY know what you're doing and why.
    - asiachick 4y ago
      I assumed they were referring to the % cash "back". For example the Apple Card > Get up to 3% cash back on every purchase you make https://apply.applecard.apple/ https://apply.applecard.apple/ I've always assumed I'm paying that 3% so might as well try to get some of it back.
    - Silhouette 4y ago
      For anyone downvoting the solid advice in the parent comment, please be aware that "cash back" has been a widely used term in some countries for getting a shop where you're paying by card to charge an extra amount to your card at the same time and give you that amount in cash. It was a popular alternative to ATM use here in the UK for a long time for example. However if you were paying using a credit card instead of a debit card then the same (often very expensive) charges and interest rates would apply as if you used your credit card to get cash at an ATM and sometimes people didn't realise that and thought it was a free and convenient way to withdraw extra cash (as it typically would have been if paying with a bank debit card instead).
    - skimo8 4y ago
      Apologies - I was indeed referring to the cash back rewards.
- kingrazor 4y ago
  I use one for two reasons. One is that it puts a layer between my purchase and my bank. Any fraudulent purchases can be dealt with before any money is taken from my account. The second is for the rewards and the ability to build credit.
- searchableguy 4y ago
  Predictability in cash flow and free rewards in India. Most places do not charge extra for credit cards and nor do you pay annual credit card fee in most cases. It's an interest free loan for upto 45 days. Many banks will provide 3.5 - 6% interest without risk. If you spend a lot monthly, it's a free nice dinner every month without doing anything. If you can use the capital, it can be worth more. They provide free lounge access and food at airport + concierge service for discounted bookings at hotels. Chargeback protection is necessary in India.
  - blackoil 4y ago
    > Chargeback protection is necessary in India. Why?? Practically all transactions using debit card/UPI require PIN/OTP.
    - searchableguy 4y ago
      Scam and fraud from companies and vendors. I've had official employees from a big company try to scam me. I now only pay using credit card.
- fomine3 4y ago
  Online payment?
insane_dreamer 4y ago
that's the thing; businesses don't want to have to rely on the court system to get refunds. the x% CC processing fee is essentially fraud/non-payment insurance
- mcv 4y ago
  That's the thing; lots of businesses outside the US have no problem using bank transfers. I only have a credit card for internet purchases outside Netherland; every Dutch site (including many international ones, like Steam) supports iDeal, which is far safer than credit cards.
  - shukantpal 4y ago
    Not really safer "There is no chargeback right however, which can be considered a disadvantage for the consumer using this payment method."
julienb_sea 4y ago
The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.
- PaulDavisThe1st 4y ago
  This does not negate the parent post at all. You're just describing another deficiency of the US banking system.
  - kube-system 4y ago
    There are always scams and exploits. Legal consumer protections are necessary regardless.
  - snazz 4y ago
    Out of curiosity, how do European banks avoid this issue? If my debit card or ACH info is compromised and someone drains my checking account, is there a way to use the stolen funds before the bank/court finishes their investigation?
    - Jensson 4y ago
      The law says that the bank needs to give back your money immediately, at least in my country. If it turns out that it was your fault you don't get to keep the money, but you will have money to pay bills with during the investigation. Laws and security adapts to whatever medium people tend to use, so common problems tend to have solutions. The laws in Europe are made to make debit card transactions and security reasonable, because almost everyone uses debit cards.
      - Spooky23 4y ago
        US law does the same thing. But you need to deal with it. My credit card was compromised and AMEX has a problem. My debit card is compromised and I have several problems.
PaulDavisThe1st 4y ago
This, absolutely. It is totally embarrassing to watch my UK family or EU friends interact with their banking systems and compare it with the US. To be fair, things are improving a little bit. But we're still so very far behind the EU banking system. Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone.
- lotsofpulp 4y ago
  > Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone. This is available to most people in the US via Zelle. I have been using it for nearly 10 years I think. https://www.zellepay.com/get-started https://www.zellepay.com/get-started Ideally, the federal government would have already made it a utility available to all, but for now the functionality is there for those who can get a bank account.
  - rPlayer6554 4y ago
    That is no solution. The limits are so low you can't do serious transactions with it. I think it's 1000$ instant daily transfer max, then 2500$ daily non-instant transfer.
    - toomuchtodo 4y ago
      It’s up to your bank. My max limits are $5k for known parties, $2k for new/unseasoned contacts (Chase).
      - ClumsyPilot 4y ago
        So even you can't pay a rent deposit, pay university tuition or let alone large items like a car
        toomuchtodo 4y ago
        At the moment. FedNow (new instant payment rails) limits will be $25k to start, negating the issue of low Zelle limits. Progress will arrive.
happyopossum 4y ago
> I was very surprised when later (about 13 years ago) a US friend told me that they were still using cheques for most things. I was married with kids 13 years ago and I never touch checks - that’s not a wide spread US thing, it’s a generational thing. Anyone who used checks for ‘everything’ 13 years ago was a massive outlier.
remote_phone 4y ago
This has little to do with the banking system and everything to do with counter party risk. As a consumer you don’t know if you are getting ripped off. Having the weight of a credit card company on your side makes it much easier to buy something knowing you have fraud protection.
martinald 4y ago
Well from my perspective Germany is incredibly backwards with payment infrastructure (apparently has got somewhat better during covid). I've been many many times and so many places do not accept any debit/credit card, only cash. It is incredibly annoying especially at restaurants and you want to pay for a group. Youre right about the rest but in the US card acceptance is very very high (same in the UK, Nordics, etc). Germany definitely is not a shining light of electronic payments imo.
- ephimetheus 4y ago
  That’s due to societal reasons though not really technical ones. In many cases it’s the businesses not being willing to pay the extra fees at all, regardless of how low they are. This seems to indeed have started to rapidly change with covid.
  - martinald 4y ago
    Cash has a load of fees of its own though - loss, theft, peoople giving wrong change out, transport costs (and the risk it entails), bank fees to accept etc. I believe the cost of handling cash is estimated at 1-2%. I know my business bank accounts all charge 0.5%-1% to pay cash in. The only way it makes sense is if you are evading tax, as you'll happily pay 1-2% in cash losses to save 20, 30, 40%+ in taxes.
    - ephimetheus 4y ago
      I've never got it either. I do have to say though that the German society is super focussed on cash as a thing so I wouldn't be surprised if the associated cost of it were lower there. It doesn't make sense to me however that the economics are ostensibly so different between e.g. Germany and France, where in the latter basically even small shops don't care. Either it's something to do with taxes like you said, or German shop's margins are razor thin.
jjtheblunt 4y ago
what's a charge back? (not joking: in the US and I don't know)
- RHSeeger 4y ago
  It's when you tell your credit card company that a specific charge was not valid. Generally because the person/company it was too did not fulfill their end of the transaction. Generally, you're not responsible for the charge until they've looked into it and determined who they believe is at fault.
  - jjtheblunt 4y ago
    thank you
GekkePrutser 4y ago
The US credit card system is also the reason we still have magstripes and all the fraud that goes along with it because chip & pin is still not everywhere there. Not to mention making payments available using nothing but info printed on the actual card being a very bad idea. Especially because in Europe we lack all the cool payment protection and insurance stuff that US cards offer.
- ferdowsi 4y ago
  The credit card companies strongly push merchants to adopt EMV chips by shifting liability for chargebacks onto merchants who are still using magstripes. I don't think I've seen a non-chip capable terminal in the last year.
  - GekkePrutser 4y ago
    Good but still a decade too late. The CC companies won't remove the actual magstripe (and thus the vulnerabilities it represents!) until it's not necessary anywhere. Here it's been banned from all payment terminals since 2014 IIRC. But skimming is still a thing because they send the card scans to other countries where magstripes are still permitted :(
  - Symbiote 4y ago
    The liability shift in Britain was on 1 January 2005. In the USA, gas station transactions only had this shift in 2021. > The magnetic stripe will start to disappear in 2024 from Mastercard payment cards in regions, such as Europe, where chip cards are already widely used. Banks in the U.S. will no longer be required to issue chip cards with a magnetic stripe, starting in 2027. [1] My cards' magnetic stripes haven't been used for at least 10 years. [1] https://www.mastercard.com/news/perspectives/2021/magnetic-stripe/ https://www.mastercard.com/news/perspectives/2021/magnetic-s...
    - GekkePrutser 4y ago
      Oh great to hear that the magstripe is disappearing! Not being able to use my card in remote areas abroad without chip+pin is not an issue for me. I'm much more concerned with skimming. Especially because even if the bank guarantees it, it's still a big hassle.
astura 4y ago
>I was very surprised when later (about 13 years ago) a US friend told me that they were still using cheques for most things. Your friend is strange, the only thing I used checks for 13 years ago was rent.
refurb 4y ago
Credit cards are superior to debit cards in every way. Fraudulent charges can be reversed immediately, don’t impact you at all (since the money isn’t yours). Chargebacks can force a retailer to give your money back. The benefits are endless.
- mixmastamyk 4y ago
  They aren't a good solution to paying a friend $10 or your rent every month.
  - brewdad 4y ago
    I can pay my child's college dorm fees with a credit card with no additional fee. At least I get a little cash back. But, yeah, that kind of arrangement is extremely rare.
    - mixmastamyk 4y ago
      It's a several-hundred-dollar a year fee to a middle-man. For a service that should be approaching free after a century of progress in telecommunications.
- flukus 4y ago
  > Fraudulent charges can be reversed immediately This isn't really a benefit, it's a fix to a problem caused by credit cards that doesn't happen at all (or at least rarely) with debit cards.
refurb 4y ago
As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system Disagree. This is like saying "This illustrates that the US bankruptcy system is a solution for the deficiencies in the US credit industry". What you see as a "deficiency" I see as "pro-consumer". As a credit card customer, I carry almost no risk of fraud. Why? Because my credit card company controls payment and will just reverse it if needed. They are also happy to keep retailers in line by holding them to contractual obligations. It's a system I'd prefer than some direct payment from my bank where the risk of fraud and its resolution is entirely on me.
shreyshnaccount 4y ago
yeah, even in India, most online businesses support UPI (unified payment interface) wallets and apps like paytm which can also easily work with subscriptions, and can be connected to your bank account for instant payments. they payments infra in India is unbelievably awesome
wink 4y ago
What you write is correct re: Germany but you've left out the part where everyone who wanted to order something on the internet (before widespread PayPal adoption) still got a credit card just for that. And maybe for getting money from international ATMs where our Maestro cards would not work (I know I am mixing up timelines here, the cards were Giro, not Maestro at the time and I don't really know the details)
- lxgr 4y ago
  Fortunately these days are finally over, with more and more banks finally issuing debit cards co-badged with an international and online capable scheme (Mastercard or Visa Debit), rather than just Maestro or V PAY.
lxgr 4y ago
> in Germany, hardly anyone had a credit card, while everyone was using automatic payments and electronic wiretransfers Neither SEPA direct debit nor SEPA credit transfer offer any means of dispute resolution, though (SEPA direct debit defaults in favor of the payer, credit transfer in that of the payee). This means that all but the largest retailers (which can afford to do fraud management entirely in-house) still depend on third parties to arbitrate the risk of non-payment (for merchants) and non-delivery (for customers). > Of the people (in Germany) I know, they also never use charge backs on the cards (I suspect many don't even know that you can do it) and instead rely on the court system to get refunds etc.. This indeed seems to be the case, which is unfortunate e.g. in the case of travel provider insolvencies. The card scheme rules are very clear in this case, but way too many German banks have in the past declined these disputes (claiming that they are "incompatible with German bankruptcy law"). Cards (both credit and debit) do offer more customer protection that almost any other widely accepted online payment method.
mellavora 4y ago
And Germany invented mail order. It took two things: The German post office (one of the first in the world) and the high trust within German society.
hnaccount_rng 4y ago
Agreed that this is very seldom over here. But it's still the reason why I'm willing to shop that often online. It is _also_ the reason why online retailers are so "customer friendly". If I have a complaint with Amazon or Ebay I tell them I have a problem and I just expect them to sort it in my favour. If you buy stuff from e.g. C&A or H&M (two clothing chains here) and pay by invoice (which is basically always a wire transfer you initialise), then there is always much more hassle. My ex-girlfriend had to have 3-letter discussion with them that they had to find the stuff she didn't want in their warehouse. If she'd just paid via credit card, this discussion wouldn't have lasted that long, because we could have had the bank take care of it. And I'm reasonably certain that ability influence their CS department's behaviour
Glawen 4y ago
credit card was common in France since the 90s, nearly every shop took carte bleu/crédit card. Going to Germany is like going back living in cave, it is crazy to be told to get cash at the ATM in the shop for 1000 euros worth of goods in media markt (Stuttgart, 10 years ago, I hope you went bankrupt). However I love cheque, it is still available in France and I use them regularly. You can actually use it to pay your shopping, it is accepted in a lot of shops. It is perfect to pay something by mail, or to pay sports clubs license. No need to request the IBAN, no need to type it and hope you didn't make a mistake, no need to confirm with 2FA using your secret code and no need to wait for the transfer to go through.
BrandoElFollito 4y ago
We still use cheques a lot in France. Even without that we are the Middle Ages of banking on Europe. As for charge back, this is not something you can do yourself, you need to complain to the bank. By law they have to credit you back and investigate (and possibly charge back)

nixass 4y ago

Why would I use credit card at all? Sure it does help when traveling but not much use for it otherwise

philip1209 4y ago
For consumers in the USA, there's a negative take rate. You get cash back if you pay with a card.
PaulDavisThe1st 4y ago
Don't think of it as a credit card. Think of it as payment mechanism. It comes with certains costs (to some users, and to all merchants) and also with certain benefits. It also comes with a certain aggregate cost to the whole of society, since essentially prices are increased to cover fees, and then some fraction of the fees are refunded to the wealthiest users (redistribution, just more subtle than taxes).
JumpCrisscross 4y ago
> Why would I use credit card at all? Float. If I charge $10k to a card, I get an interest-free loan until the balance has to be paid off. In a zero-rate environment that's meaningless. But even at the 30-day's 2.22% [1], that's almost twenty bucks. I'm probably paying about 1% more for the CC fees, but I can use my card that gives me 1.5% back on everything. [1] https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202208 https://home.treasury.gov/resource-center/data-chart-center/...
- GekkePrutser 4y ago
  That seems so much hassle for so little. But in Europe credit cards don't give cashback.
  - novok 4y ago
    Your going to pay with some sort of payment card, and credit cards are easy to sign up for and less hassle to use with payments than debit cards, which require you to tap in a pin all the time. Also less fraud protection, etc.
    - GekkePrutser 4y ago
      Here in Europe it's the complete opposite. They're hard to sign up for (banks don't like giving them) and you get registered for the loan which means you will have a harder time getting a mortgage or car loan. The more loans you already have the harder it gets. I heard in the US it works the opposite way. And the pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't. But the same goes for both. And we don't get much additional fraud protection or other benefits like insurance on them that we don't get with our debit cards. I'm surprised the payment systems are so completely opposite. Despite being the same tech from the same companies. The only reason I have one is that my work insists that I get an Amex due to some dirty deal they have. Which is a horrible card for traveling in Europe, nobody accepts it besides hotels. Try getting a taxi in Paris for example.. I also had my personal one as my debit sometimes didn't work but these days it works everywhere.
      - JumpCrisscross 4y ago
        > pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't. Across Italy, France, Britain, the Netherlands and Portugal, over the last thirty days, I never had to provide a PIN over contactless. This was true for minor purchases to €5,000+.
xboxnolifes 4y ago
Why would I not use a credit card? It's essentially a better debit card in every scenario, except for when paying with a credit card has an additional fee.
- einpoklum 4y ago
  1. Extra hassle of interaction with a second company other than your bank, extra credentials, tracking balances, etc. etc. When I was living in the Netherlands I had my bank-account-attached Maestro card (or sometimes cash) and that was that. Except when foreign companies needed a credit card. 2. Fees. The whole point of credit cards - for the CC companies of course - is fees.
  - awillen 4y ago
    Pretty much every major bank in the US issues credit cards, so you don't need to deal with a second company. For most consumers, there are credit cards without fees (the CC companies charge fees to merchants, but unless you're dealing with a place that offers a cash discount, that doesn't affect you at all).
  - searchableguy 4y ago
    > Fees. The whole point of credit cards - for the CC companies of course - is fees. On the merchant side, yes. On the consumer side, no. There aren't many examples than Amex which is mostly popular in US charging high fees for their credit cards. Most credit card companies make money from merchant run programs and overdraft & interest on late payments and penalties. They make half of their profit from vulnerable and poor people to pay rewards.
    - einpoklum 4y ago
      Merchants can forward the fees they pay onto you. And, in fact, some definitely do. So cash/debit card price would be X, credit card price might be X + 1% or X + 3 EUR or whatever. Others just refuse to accept credit cards: Direct debit or cash only.
  - 4y ago
kube-system 4y ago
1. Free one month loans 2. The law requires banks to pay for any fraud
skimo8 4y ago
I use it for cash back. It helps to significantly offset sales tax for me. Yes, the money is always coming from somewhere and arguably products might be cheaper without credit cards. However, it’s the game we’re in, so why leave money on the table?
- misterprime 4y ago
  cash back *rewards. Please don't use your credit cards for cash advances unless you REALLY know what you're doing and why.
  - asiachick 4y ago
    I assumed they were referring to the % cash "back". For example the Apple Card > Get up to 3% cash back on every purchase you make https://apply.applecard.apple/ https://apply.applecard.apple/ I've always assumed I'm paying that 3% so might as well try to get some of it back.
  - Silhouette 4y ago
    For anyone downvoting the solid advice in the parent comment, please be aware that "cash back" has been a widely used term in some countries for getting a shop where you're paying by card to charge an extra amount to your card at the same time and give you that amount in cash. It was a popular alternative to ATM use here in the UK for a long time for example. However if you were paying using a credit card instead of a debit card then the same (often very expensive) charges and interest rates would apply as if you used your credit card to get cash at an ATM and sometimes people didn't realise that and thought it was a free and convenient way to withdraw extra cash (as it typically would have been if paying with a bank debit card instead).
  - skimo8 4y ago
    Apologies - I was indeed referring to the cash back rewards.
kingrazor 4y ago
I use one for two reasons. One is that it puts a layer between my purchase and my bank. Any fraudulent purchases can be dealt with before any money is taken from my account. The second is for the rewards and the ability to build credit.
searchableguy 4y ago
Predictability in cash flow and free rewards in India. Most places do not charge extra for credit cards and nor do you pay annual credit card fee in most cases. It's an interest free loan for upto 45 days. Many banks will provide 3.5 - 6% interest without risk. If you spend a lot monthly, it's a free nice dinner every month without doing anything. If you can use the capital, it can be worth more. They provide free lounge access and food at airport + concierge service for discounted bookings at hotels. Chargeback protection is necessary in India.
- blackoil 4y ago
  > Chargeback protection is necessary in India. Why?? Practically all transactions using debit card/UPI require PIN/OTP.
  - searchableguy 4y ago
    Scam and fraud from companies and vendors. I've had official employees from a big company try to scam me. I now only pay using credit card.
fomine3 4y ago
Online payment?

insane_dreamer 4y ago

that's the thing; businesses don't want to have to rely on the court system to get refunds. the x% CC processing fee is essentially fraud/non-payment insurance

mcv 4y ago
That's the thing; lots of businesses outside the US have no problem using bank transfers. I only have a credit card for internet purchases outside Netherland; every Dutch site (including many international ones, like Steam) supports iDeal, which is far safer than credit cards.
- shukantpal 4y ago
  Not really safer "There is no chargeback right however, which can be considered a disadvantage for the consumer using this payment method."

julienb_sea 4y ago

The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.

PaulDavisThe1st 4y ago
This does not negate the parent post at all. You're just describing another deficiency of the US banking system.
- kube-system 4y ago
  There are always scams and exploits. Legal consumer protections are necessary regardless.
- snazz 4y ago
  Out of curiosity, how do European banks avoid this issue? If my debit card or ACH info is compromised and someone drains my checking account, is there a way to use the stolen funds before the bank/court finishes their investigation?
  - Jensson 4y ago
    The law says that the bank needs to give back your money immediately, at least in my country. If it turns out that it was your fault you don't get to keep the money, but you will have money to pay bills with during the investigation. Laws and security adapts to whatever medium people tend to use, so common problems tend to have solutions. The laws in Europe are made to make debit card transactions and security reasonable, because almost everyone uses debit cards.
    - Spooky23 4y ago
      US law does the same thing. But you need to deal with it. My credit card was compromised and AMEX has a problem. My debit card is compromised and I have several problems.

PaulDavisThe1st 4y ago

This, absolutely. It is totally embarrassing to watch my UK family or EU friends interact with their banking systems and compare it with the US. To be fair, things are improving a little bit. But we're still so very far behind the EU banking system. Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone.

lotsofpulp 4y ago
> Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone. This is available to most people in the US via Zelle. I have been using it for nearly 10 years I think. https://www.zellepay.com/get-started https://www.zellepay.com/get-started Ideally, the federal government would have already made it a utility available to all, but for now the functionality is there for those who can get a bank account.
- rPlayer6554 4y ago
  That is no solution. The limits are so low you can't do serious transactions with it. I think it's 1000$ instant daily transfer max, then 2500$ daily non-instant transfer.
  - toomuchtodo 4y ago
    It’s up to your bank. My max limits are $5k for known parties, $2k for new/unseasoned contacts (Chase).
    - ClumsyPilot 4y ago
      So even you can't pay a rent deposit, pay university tuition or let alone large items like a car
      - toomuchtodo 4y ago
        At the moment. FedNow (new instant payment rails) limits will be $25k to start, negating the issue of low Zelle limits. Progress will arrive.

happyopossum 4y ago

> I was very surprised when later (about 13 years ago) a US friend told me that they were still using cheques for most things. I was married with kids 13 years ago and I never touch checks - that’s not a wide spread US thing, it’s a generational thing. Anyone who used checks for ‘everything’ 13 years ago was a massive outlier.

remote_phone 4y ago

This has little to do with the banking system and everything to do with counter party risk. As a consumer you don’t know if you are getting ripped off. Having the weight of a credit card company on your side makes it much easier to buy something knowing you have fraud protection.

martinald 4y ago

Well from my perspective Germany is incredibly backwards with payment infrastructure (apparently has got somewhat better during covid). I've been many many times and so many places do not accept any debit/credit card, only cash. It is incredibly annoying especially at restaurants and you want to pay for a group. Youre right about the rest but in the US card acceptance is very very high (same in the UK, Nordics, etc). Germany definitely is not a shining light of electronic payments imo.

ephimetheus 4y ago
That’s due to societal reasons though not really technical ones. In many cases it’s the businesses not being willing to pay the extra fees at all, regardless of how low they are. This seems to indeed have started to rapidly change with covid.
- martinald 4y ago
  Cash has a load of fees of its own though - loss, theft, peoople giving wrong change out, transport costs (and the risk it entails), bank fees to accept etc. I believe the cost of handling cash is estimated at 1-2%. I know my business bank accounts all charge 0.5%-1% to pay cash in. The only way it makes sense is if you are evading tax, as you'll happily pay 1-2% in cash losses to save 20, 30, 40%+ in taxes.
  - ephimetheus 4y ago
    I've never got it either. I do have to say though that the German society is super focussed on cash as a thing so I wouldn't be surprised if the associated cost of it were lower there. It doesn't make sense to me however that the economics are ostensibly so different between e.g. Germany and France, where in the latter basically even small shops don't care. Either it's something to do with taxes like you said, or German shop's margins are razor thin.

jjtheblunt 4y ago

what's a charge back? (not joking: in the US and I don't know)

RHSeeger 4y ago
It's when you tell your credit card company that a specific charge was not valid. Generally because the person/company it was too did not fulfill their end of the transaction. Generally, you're not responsible for the charge until they've looked into it and determined who they believe is at fault.
- jjtheblunt 4y ago
  thank you

GekkePrutser 4y ago

The US credit card system is also the reason we still have magstripes and all the fraud that goes along with it because chip & pin is still not everywhere there. Not to mention making payments available using nothing but info printed on the actual card being a very bad idea. Especially because in Europe we lack all the cool payment protection and insurance stuff that US cards offer.

ferdowsi 4y ago
The credit card companies strongly push merchants to adopt EMV chips by shifting liability for chargebacks onto merchants who are still using magstripes. I don't think I've seen a non-chip capable terminal in the last year.
- GekkePrutser 4y ago
  Good but still a decade too late. The CC companies won't remove the actual magstripe (and thus the vulnerabilities it represents!) until it's not necessary anywhere. Here it's been banned from all payment terminals since 2014 IIRC. But skimming is still a thing because they send the card scans to other countries where magstripes are still permitted :(
- Symbiote 4y ago
  The liability shift in Britain was on 1 January 2005. In the USA, gas station transactions only had this shift in 2021. > The magnetic stripe will start to disappear in 2024 from Mastercard payment cards in regions, such as Europe, where chip cards are already widely used. Banks in the U.S. will no longer be required to issue chip cards with a magnetic stripe, starting in 2027. [1] My cards' magnetic stripes haven't been used for at least 10 years. [1] https://www.mastercard.com/news/perspectives/2021/magnetic-stripe/ https://www.mastercard.com/news/perspectives/2021/magnetic-s...
  - GekkePrutser 4y ago
    Oh great to hear that the magstripe is disappearing! Not being able to use my card in remote areas abroad without chip+pin is not an issue for me. I'm much more concerned with skimming. Especially because even if the bank guarantees it, it's still a big hassle.

astura 4y ago

>I was very surprised when later (about 13 years ago) a US friend told me that they were still using cheques for most things. Your friend is strange, the only thing I used checks for 13 years ago was rent.

refurb 4y ago

Credit cards are superior to debit cards in every way. Fraudulent charges can be reversed immediately, don’t impact you at all (since the money isn’t yours). Chargebacks can force a retailer to give your money back. The benefits are endless.

mixmastamyk 4y ago
They aren't a good solution to paying a friend $10 or your rent every month.
- brewdad 4y ago
  I can pay my child's college dorm fees with a credit card with no additional fee. At least I get a little cash back. But, yeah, that kind of arrangement is extremely rare.
  - mixmastamyk 4y ago
    It's a several-hundred-dollar a year fee to a middle-man. For a service that should be approaching free after a century of progress in telecommunications.
flukus 4y ago
> Fraudulent charges can be reversed immediately This isn't really a benefit, it's a fix to a problem caused by credit cards that doesn't happen at all (or at least rarely) with debit cards.

refurb 4y ago

As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system Disagree. This is like saying "This illustrates that the US bankruptcy system is a solution for the deficiencies in the US credit industry". What you see as a "deficiency" I see as "pro-consumer". As a credit card customer, I carry almost no risk of fraud. Why? Because my credit card company controls payment and will just reverse it if needed. They are also happy to keep retailers in line by holding them to contractual obligations. It's a system I'd prefer than some direct payment from my bank where the risk of fraud and its resolution is entirely on me.

shreyshnaccount 4y ago

yeah, even in India, most online businesses support UPI (unified payment interface) wallets and apps like paytm which can also easily work with subscriptions, and can be connected to your bank account for instant payments. they payments infra in India is unbelievably awesome

wink 4y ago

What you write is correct re: Germany but you've left out the part where everyone who wanted to order something on the internet (before widespread PayPal adoption) still got a credit card just for that. And maybe for getting money from international ATMs where our Maestro cards would not work (I know I am mixing up timelines here, the cards were Giro, not Maestro at the time and I don't really know the details)

lxgr 4y ago
Fortunately these days are finally over, with more and more banks finally issuing debit cards co-badged with an international and online capable scheme (Mastercard or Visa Debit), rather than just Maestro or V PAY.

lxgr 4y ago

> in Germany, hardly anyone had a credit card, while everyone was using automatic payments and electronic wiretransfers Neither SEPA direct debit nor SEPA credit transfer offer any means of dispute resolution, though (SEPA direct debit defaults in favor of the payer, credit transfer in that of the payee). This means that all but the largest retailers (which can afford to do fraud management entirely in-house) still depend on third parties to arbitrate the risk of non-payment (for merchants) and non-delivery (for customers). > Of the people (in Germany) I know, they also never use charge backs on the cards (I suspect many don't even know that you can do it) and instead rely on the court system to get refunds etc.. This indeed seems to be the case, which is unfortunate e.g. in the case of travel provider insolvencies. The card scheme rules are very clear in this case, but way too many German banks have in the past declined these disputes (claiming that they are "incompatible with German bankruptcy law"). Cards (both credit and debit) do offer more customer protection that almost any other widely accepted online payment method.

mellavora 4y ago

And Germany invented mail order. It took two things: The German post office (one of the first in the world) and the high trust within German society.

hnaccount_rng 4y ago

Agreed that this is very seldom over here. But it's still the reason why I'm willing to shop that often online. It is _also_ the reason why online retailers are so "customer friendly". If I have a complaint with Amazon or Ebay I tell them I have a problem and I just expect them to sort it in my favour. If you buy stuff from e.g. C&A or H&M (two clothing chains here) and pay by invoice (which is basically always a wire transfer you initialise), then there is always much more hassle. My ex-girlfriend had to have 3-letter discussion with them that they had to find the stuff she didn't want in their warehouse. If she'd just paid via credit card, this discussion wouldn't have lasted that long, because we could have had the bank take care of it. And I'm reasonably certain that ability influence their CS department's behaviour

Glawen 4y ago

credit card was common in France since the 90s, nearly every shop took carte bleu/crédit card. Going to Germany is like going back living in cave, it is crazy to be told to get cash at the ATM in the shop for 1000 euros worth of goods in media markt (Stuttgart, 10 years ago, I hope you went bankrupt). However I love cheque, it is still available in France and I use them regularly. You can actually use it to pay your shopping, it is accepted in a lot of shops. It is perfect to pay something by mail, or to pay sports clubs license. No need to request the IBAN, no need to type it and hope you didn't make a mistake, no need to confirm with 2FA using your secret code and no need to wait for the transfer to go through.

BrandoElFollito 4y ago

We still use cheques a lot in France. Even without that we are the Middle Ages of banking on Europe. As for charge back, this is not something you can do yourself, you need to complain to the bank. By law they have to credit you back and investigate (and possibly charge back)