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In the US, automated payments tend to be "pull based", where a company tells your bank "give me this much from this account, I have permission". The company can

In the US, automated payments tend to be "pull based", where a company tells your bank "give me this much from this account, I have permission". The company can lie but, by the time you find out, the money is already gone and it can take a long time to get it back. The bank has no real incentive to get your money back. With a credit card, on the other hand, you see what was taken _before_ you pay them. So you can tell the credit card company "this amount that was charged to me is not me, I'm not paying that". Then the credit card company has to look into it; they have incentive to figure out what happened (unlike banks) because they aren't getting payed back their "loan" to you until they do.

blackoil 4y ago
In India, now you have to approve all such scheduled payments with a 2FA and upto a limit. So even if I have approved ShadyCorp they can't demand more than approved amount.
mcv 4y ago
Dutch banks used to work like that too, by "incasso", and in fact still do to some extent. But any incasso that hasn't been directly authorised by you with the bank can be undone (and apparently at an additional fee to the company that originated it; they really don't like it when that happens). So that's actually very similar to how credit cards work, but without the additional fee. These days you can easily manage all upcoming incassos through your banking app and block them before they happen, though I generally prefer to pay such recurring payments through automated "push" transfer.
- lxgr 4y ago
  The problem is that since direct debits are so easily reversible, in Germany they are not seen as a final form of payment (until the charge return time limit expires) as there is no form of dispute arbitration involved. Merchants will usually not ship goods or provide services for a direct debit alone.
  - mcv 4y ago
    In Netherland incasso is mostly used for recurring membership fees, not the purchase of goods. Those are generally done through a direct, authorised transaction, which isn't so easily reversible.

blackoil 4y ago

In India, now you have to approve all such scheduled payments with a 2FA and upto a limit. So even if I have approved ShadyCorp they can't demand more than approved amount.

mcv 4y ago

Dutch banks used to work like that too, by "incasso", and in fact still do to some extent. But any incasso that hasn't been directly authorised by you with the bank can be undone (and apparently at an additional fee to the company that originated it; they really don't like it when that happens). So that's actually very similar to how credit cards work, but without the additional fee. These days you can easily manage all upcoming incassos through your banking app and block them before they happen, though I generally prefer to pay such recurring payments through automated "push" transfer.

lxgr 4y ago
The problem is that since direct debits are so easily reversible, in Germany they are not seen as a final form of payment (until the charge return time limit expires) as there is no form of dispute arbitration involved. Merchants will usually not ship goods or provide services for a direct debit alone.
- mcv 4y ago
  In Netherland incasso is mostly used for recurring membership fees, not the purchase of goods. Those are generally done through a direct, authorised transaction, which isn't so easily reversible.