The plug to support The Guardian by donating with your VISA card at the bottom of an article about the VISA network being down caused me to laugh out loud. #Ironic
Luckily, credit cards are really a second tier payment system in most of the EU.
Country-specific (debit) cards and the international Maestro payment system are the primary way to pay, along with cash. Apart from online shopping, of course. But even there, you usually have other viable payment options.
It's all Mastercard/Visa now in the UK, for both debit and credit cards - and I think Visa is probably the more common of the two these days. Debit cards are pretty much always Visa here and have been for about a decade now.
There is precisely one issuer of non-Mastercard/Visa credit cards in the UK - Amex - and they're not accepted nearly as widely. There are exactly five banks which issue Mastercard debit cards rather than Visa - Virgin Money, Citibank, Clydesdale Bank, Yorkshire Bank, and Metro Bank - and none of them are particularly major players. (I think it was down to three or less at one point; Virgin and Citibank only switched in 2015.) Santander and TSB have apparently announced they're planning to switch to Mastercard debit in the future but currently their customers have Visa debit cards too. Maestro is dead as a dodo here, and the old UK-specific Switch debit card system no longer exists.
So in actual fact, people in the UK who're reliant on their debit cards are more likely to be affected by this than people with credit cards too, even if the cards are from the same bank - banks that issue Mastercard credit cards generally use Visa for debit cards.
Transferwise recently started issuing MasterCard debit cards. I was surprised that (i) it's technically a debit card, unlike Revolut's card which is a prepaid card, and (ii) it's issued by Transferwise, not be some bank on their behalf.
VISA and MasterCard have their respective networks. The banks issue cards that operate on these networks with their branded logo and packages with benefits, some of which are provided by the credit card networks, and some from the issuing bank.
The european debit card systems are not comparable with how it works in the US. In the US I will use credit cards, because that is the better system down there. Over here in Europe, I'll hardly ever use a credit card.
This is not true for all of Europe. Here in the UK everything works through Visa/Mastercard, whether it's your credit card or your normal "bank card" (debit card).
I really miss this system every time I go back to continental Europe and suddenly have to carry around huge amounts of cash with me. Because nobody accepts cards, and even if they do it's usually only Maestro etc.
Contactless payments have finally rolled out in most discounters/supermarkets and drugstores in Germany, it's a godsend. Just tap the card and the receipt starts printing in 3-5 seconds.
But yeah for other stores and restaurants, better have cash.
every time I go back to continental Europe and suddenly have to carry around huge amounts of cash with me. Because nobody accepts cards
You must be going to the wrong areas in Europe. Literally, everywhere I go (France, Spain, Italy, Switzerland, Czech Republic, Germany, Belgium, Netherlands in the past 6 months alone) cards are accepted.
I was visiting Amsterdam (from the UK) about a month ago and I was quite surprised (and annoyed) to find stores, even supermarkets, that have gone cashless while at the same time they would only accept Maestro.
I was in Berlin recently and not only did public transport ticket machines not accept cards, they didn't even accept notes. Coins only. In London you just tap your credit card. And many smaller cafes and shops didn't accept cards either. Or if they did, only the Maestro ones that don't really exist outside Germany.
+1 for SEPA ICT. Once that's rolled out everywhere it is really going to challenge the established online payment systems in Europe. Last time I bought something in an Austrian online shop it offered me the "eps" option which redirected me to my own onlinebanking portal after logging in the payment had only to be confrirmed with a tan and the payment confirmation from the vendor was instant.
Basically the same flow as paying with paypal but completely through my own bank
>Once that's rolled out everywhere it is really going to challenge the established online payment systems in Europe
Disagree. Most of the German banks that have just announced SEPA Instant are charging 0.50€-2€/transaction. No way the retailers will manage to convince the customers to pay that.
I think PSD2 with the Bank Account API (think Klarna/SOFORT) is the bigger challenger.
Oh. I did not know that. I assumed that all SEPA transactions below 15000€ will be carried out as ICT if both banks support it. Well it seems they found a way to screw us over with another random fee
Chiming in from Germany. Our debit cards are branded "girocard", which is to my knowledge exclusive to Germany and mostly co-branded with either Maestro or V-Pay for international payments.
Finland here. We transitioned away from national debit cards to Visas (and MC) about 10-15 years ago, I think these days we are almost exclusively Visa/MC. And practically nobody uses cash as primary payment method.
Most EU?
It's first time I hear about country-specific cards.
Or more specifically, all cards are country specific, they are issued by your bank which is in your country (and has country of issue language printed on it).
I work for a large e-commerce company and we're seeing ~10% decline rates, at most, on VISA cards only, and that's intermittent. Overall average decline rate is more like 1-3% when you factor in the intermittentness of it.
Still not great, but not PAYMENT CHAOS and not a CRASH OF THE VISA NETWORK.
When you say you're seeing 10% decline rates, is that out of your total transactional volume (which I suspect is the case), or just out of the subset of your customer who actually have bona fide Visa credit cards?
I'm British, and we have both Visa Debit and Visa Credit in the UK. I haven't yet looked into whether it's Visa Debit or Visa Credit or both which is experiencing issues.
Occasionally a spike up to 10% failure rate of all our card transactions (sorry, misunderstood your Q). ~80% of our transactions are VISA of some sort.
I think you and the media are both wrong. You're wrong because the distribution of outage is rarely uniform. If 9 of 10 attempts worked, customers would try their cards again and there'd be no story.
What we see here is that some customers are seeing a total outage, while others are entirely unaffected. And the press is more wrong, because by ignoring the 90% who are unaffected, they exaggerate the problem by an order of magnitude.
Yeah i don't know why people are downvoting you.
A new Carrington event, which is actually long overdue, or an unexpected cyber attack from China which i also don't find impossible to imagine in the next decades and society is at an absolute standstill.
Off course more important problems would probably arise before.
But reflecting on the sustainability of microchip-society in times of outage is healthy.
Crash, Bang and suddenly everyone is 3 meals away from slaying their neighbour.
tl;dr When infrasructure of electronic fund transfer becomes unavailable/illiquid, the velocity is M2, unsterstandably, plummets. Correspondingly, the velocity of M0 shoots through the roof like a rocket on the way to Pluto. In the meantime, CPI goes crazy and because of limited M0 barter becomes the main form of transaction.
And in this type of event, there probably isn't a local bitcoin chugger able to mine u a coin or verify a transaction.
This is one of the reasons why every frequent traveller should carry credit cards from at least two different banks and two different credit card companies (like Mastercard and Visa).
My bank recently replaced my Mastercard credit card with a Visa one, despite being Mastercard for years. I also have a Visa debit card. You don't have control over this :(
Here in Sweden many former Visa outfits have gone to Mastercard, so now it's sort of hard to find a Visa CC here. I've gone out of my way to have one Visa and one MC though.
At least to me, the fact this happens on a Friday evening suggests it's deliberate, precisely because nobody with any sense would deploy something on a Friday unless it's an emergency.
That random site happens to agree with my kind of thinking, so I copied that content in here:
"Fire on Mondays. This lets dismissed workers start looking for a job right away.
Make job offers on Thursdays. If candidates need time to think, you can give them one extra day. If you give them the whole weekend, they may find another offer.
Give good job reviews on Fridays. It sets the mood for a good weekend, which can be a reward in itself. It also prevents satisfied workers from "kicking back" for the rest of the week.
Give poor job reviews on Mondays. This provides employees time to work out improvements during the week, instead of stewing about them all weekend."
One day to accept a job offer seems extremely short. If someone gives me one day to accept a job offer, chances are I'm still interviewing elsewhere and will decline unless it's my primary choice.
There're plenty of other explanations. Not all failures are linked to deploys. The root cause could turn out to be a hardware failure somewhere. It could be a botched rollback of a change earlier in the week that had lesser consequences. It could be a change that was scheduled to take place on the 1st of the month, where the person who chose the live-date didn't think about the day of the week. Or it could be, as you describe it, someone without any sense.
>because nobody with any sense would deploy something on a Friday unless it's an emergency
So, this is completely irrelevant in this case due to usage patterns (a CC network should not push on a Friday unless they are staffed over the weekend), but we push on Fridays at my company. We are a clinical testing laboratory and we do not receive samples or new orders over the weekend, so it makes perfect sense to deploy on a Friday and deal with potential issues when no one else needs to get work done.
One would expect that this is some kind of very hard to anticipate cascading failure in a distributed system. I find it hard to believe that it would be possible for something affecting all Visa transactions in a region would be deployable by a individual or without extensive integration testing.
Any thoughts why a system like Eagle Cash[1] couldn't be used more generally? Obviously this particular design is stored value, but that's just a limit the chip is tracking, there's no particular reason it couldn't be based on your credit limit.
That seems like a really cool concept. But also way too free. How are they making money?
Their privacy policy (which was hard to find) doesn't describe how they handle your transaction data, yet almost half of the policy is describing how they're going to collect and disclose (web) information for advertising.
Glad I happen to be in Munich where cash is king otherwise I would’ve noticed. Using cash here has made me rethink my habits.
Still no chance I will put down my AMEX. 6% cashback at Grocery stores, 3% at the pump, and 3% at the department store I shop at. Even if I carry a balance sometimes I made almost $700 back last year.
Cashback is very US thing though, so using cash in Germany won't deprive you from that. There are some companies offering modest cashback in Europe too, but in my experience their cards are rarely accepted anywhere. Which is fine by me, I'd rather have lower prices to start with.
Groceries is a quite big expense part for me, so REWE, Aldi and tegut in Germany are quite good for earning. Other expenses are traveling, where basically everyone accepts Amex. Starbucks accepts is as well, quite a lot of McDonalds and most fashion retailers as well.
You probably can't survive on Amex alone, but at least in Germany there is a quite big chunk that you can cover.
Ironically my credit card info literally got stolen at a restaurant last night and most of the purchases they tried to make were declined hahahahah
Honestly, I really enjoy using my credit card. I can buy anything, anytime, online, the customer service department always resolves fraud quickly, and they even pay me to use the damn thing
That works fine until people sleepwalk into cashless society and then someone from the government will think you are undesirable and delete your assets.
I do all my day to day in-person payments in cash, yet all my assets would be just as vulnerable to that kind of attack as those of a completely cashless person.
Which is smart because at least in the US there's a large portion of the country where police can use civil forfeiture to take your money, even if you are not guilty of any crime.
When cash was used for most retail transactions, you were still going to have a couple thousand on hand at most. That won’t last long. It’s the payroll side, not the POS side, where that matters.
I know, it seems great. But who is paying for that fraud protection? Who is paying for that customer service team? Who is paying for the fact you get paid to use it?
In the end.. It's you, through slightly higher prices on everything you buy every day because retailers have to price in the cost of credit card fees that pay for all that.
In the US, that is no longer true. They can at least have a minimum, not sure if they can charge differently, but for small purchases it is effectively the same
They don't forbid charging a different price, or even advertising a different price; they only forbid advertising a surcharge for using a card. An advertised cash discount is acceptable. States may have further requirements, for example, California requires gas stations report credit prices in at least the same size numbers as cash prices, but enforcement is light.
I've seen an estimate that credit cards are actually slightly cheaper overall for the economy than cash, when you factor in everything. The physical infrastructure to deal with cash is not cheap.
Even without the physical infrastructure it might be cheaper to use credit cards. How much cash is lost in loose change after small transactions every year? I'd bet more than 2%
That depends on where you are. In Europe, electronic payments directly from bank accounts or using various types of card that debit directly are much more reliable and have much lower fees, for example.
Can you imagine the queue forming in the morning at the coffee place, where someone is trying to pay them with a bank transfer... ? Just typing in the IBAN Takes ages..
Card/Phone Contactless payments are super fast and efficient.
But you don't make a bank transfer in that environment. I can make a contactless payment with my bank's debit card, and it comes straight from my bank account. Many people here in the UK do this routinely for minor purchases, and the technology has been available for several years now. As you say, it's fast and efficient.
In the end it's the (usually) poor people who bought more than they could afford (either because they needed food or because they couldn't control their impulse buys) and are stuck paying interest on things they bought years ago
> retailers have to price in the cost of credit card fees
Do retailers actually do this? I briefly worked in retail a while back and the payment processing fees(online and offline) were all considered to be part of the cost of doing business and essentially taken up by the merchant.
Today I provide ecommerce solutions and all my merchants haven't priced in the cost of payment processing either. They aren't necessarily happy about it but they consider it to be part of the cost of engaging in commerce in the modern world otherwise they'll be annihilated by their competitors if they don't provide easy ways to accept payments from their patrons.
It's more than semantics. I once cancelled my Chase credit card and paid (or thought I paid off ) the balance in full. Turns out, it accrued some interest ( $8.56 to be precise) from the time of cancellation to the end of the billing cycle. Chase claimed that they sent me a statement (this was circa 2005) but I never got it. A month later I moved, and it kept going to the old address. A year later, a collection agent found me in San Francisco, just to collect that $8.56 amount and the whole thing ended up ruining my credit score for a few years. I asked them why they didn't call me, it's not like it was a huge debt that I ran away from. They gave me the cookie cutter answer "We sent you multiple statements."
TL;DR: The "pay off balance within the month grace period" works only if you are on top of it all the time. Miss something even once, or you move or are overseas or something, then their penalties, fees and everything else kicks in.
Again, it's a Loan, so all the operations and consequences of taking on a debt applies to credit cards, and to you as the borrower.
>The "pay off balance within the month grace period" works only if you are on top of it all the time.
If you think about how many people using the "maxed out CC" as a loan because they cant get anything else, the financial model looks rather sound. The interest rate on those things is drastic if you are no longer in the grace period, and its an easy trap to fall into, especially if you are falling on bad times or are simply gullible.
I dont think people who have their CC balanced at the end of the month are the business model. They are in the business of providing high interest loans.
If you pay off your card every month, the credit card companies consider you to be a bad investment, and they even have names to describe customers like you -- "deadbeat", among others.
Ha! Self-gloating. I cancelled my Visa just yesterday. Part of my self-imposed program to return to a simpler life. But it's some sort of weird Schadenfreude justification that it hasn't happened to me directly.
If a decentralized cryptocurrency platform could properly scale
in the future, likely with a stable cryptocurrency for currency usage, then this scenario will become a thing of the past.
Currently? Correct, hence I'm referring to a network properly scaling in the future. Ethereum currently has difficulties processing a image-based cat game, nevermind actual transactions.
If you lose x% of sales on a day due to customers not having alternative forms of payment... is there anything a merchant can do to recoup their losses?
Isn't this why you're supposed to be able to do the old hand-imprinted manual transactions? If they can't process the transaction, shouldn't they fall back to the manual option?
And you can bet that even if they did, the staff wouldn't be trained in using it. Particularly true for large stores with high turnovers of young workers. Card machines going down is a one-in-a-million event.
It's not only the card network but also the infrastructure connecting the store to the card network. And the card readers themselves as well. I would say I am at least once a month in a store where, due to some incident, they can't accept electronic payments and have a sign 'card payments not working' on at least one checkout counter
This seems to have changed in the other direction. While I used to have flat, non-embossed cards in the past, all my cards today are embossed. That's despite never having a chance to make use of the embossing.
Was that a thing in Europe?
I've seen such machines only in the USA (e.g. on conferences where they wanted to sell stuff and didn't have connectivity).
>until Visa Europe was re-acquired[0] by Visa in 2015.
Sadly. Visa Europe had some quite good policies such as banning ATM surcharges. It also made the payment sector seem a bit more european, now it's back to the US-duopoly.
On topic: Visa Europe cards are denied when used in other countries outside of Visa Europe.
A few years ago my European Visa debit card wouldn't work in the US unless they ran it as credit.
It always worked fine at US ATMs, other than the first time I informed the bank I was going overseas, which apparently they interpreted as 'please disable my card'
The selection of Credit/Debit in the US is misleading, as it refers to either Visa/MasterCard (credit) or the domestic payment processing of US cards (debit).
International cards always need to be ran as credit in the US, not matter if it is credit, debit or prepiad.
Yeah I just tried to pay with contactless at the Tesco self checkout, it failed and the security guard told me to enter my PIN instead. That worked, though I just checked my balance and see I've been charged twice for my shopping. Fuming.
Not all VISA transactions are protected. I had a scammer steal my credit card while watching my pin entered at a restaurant and then withdraw cash. The bank (Lloyds Bank in the UK) recfused to refund the money, even though there was video of the thief withdrawing the money
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[ 3.4 ms ] story [ 253 ms ] threadCountry-specific (debit) cards and the international Maestro payment system are the primary way to pay, along with cash. Apart from online shopping, of course. But even there, you usually have other viable payment options.
So it's probably not all that much chaos...
If anyone from the UK who does understand that difference would chime in, that would be helpful.
So in actual fact, people in the UK who're reliant on their debit cards are more likely to be affected by this than people with credit cards too, even if the cards are from the same bank - banks that issue Mastercard credit cards generally use Visa for debit cards.
Anyway I got declined with my visa debit card earlier, tried another payment terminal in the supermarket and it worked fine.
I have 3 Visa cards, only one is a credit card.
So yes, luckily.
I really miss this system every time I go back to continental Europe and suddenly have to carry around huge amounts of cash with me. Because nobody accepts cards, and even if they do it's usually only Maestro etc.
But yeah for other stores and restaurants, better have cash.
You must be going to the wrong areas in Europe. Literally, everywhere I go (France, Spain, Italy, Switzerland, Czech Republic, Germany, Belgium, Netherlands in the past 6 months alone) cards are accepted.
Basically the same flow as paying with paypal but completely through my own bank
Disagree. Most of the German banks that have just announced SEPA Instant are charging 0.50€-2€/transaction. No way the retailers will manage to convince the customers to pay that.
I think PSD2 with the Bank Account API (think Klarna/SOFORT) is the bigger challenger.
As far as I can tell "Country-specific (debit) cards and the international Maestro payment" are only common in a couple of really backwards countries.
https://en.m.wikipedia.org/wiki/Maestro_(debit_card)
Or more specifically, all cards are country specific, they are issued by your bank which is in your country (and has country of issue language printed on it).
I work for a large e-commerce company and we're seeing ~10% decline rates, at most, on VISA cards only, and that's intermittent. Overall average decline rate is more like 1-3% when you factor in the intermittentness of it.
Still not great, but not PAYMENT CHAOS and not a CRASH OF THE VISA NETWORK.
Occasionally a spike up to 10% failure rate of all our card transactions (sorry, misunderstood your Q). ~80% of our transactions are VISA of some sort.
What we see here is that some customers are seeing a total outage, while others are entirely unaffected. And the press is more wrong, because by ignoring the 90% who are unaffected, they exaggerate the problem by an order of magnitude.
BITCOIN
only 50% kidding.
What happens when a major rival actually attacks your cashless society?
Off course more important problems would probably arise before.
But reflecting on the sustainability of microchip-society in times of outage is healthy.
Crash, Bang and suddenly everyone is 3 meals away from slaying their neighbour.
And in this type of event, there probably isn't a local bitcoin chugger able to mine u a coin or verify a transaction.
500 USD in $100 bills is easy to carry along with your passport.
That random site happens to agree with my kind of thinking, so I copied that content in here:
"Fire on Mondays. This lets dismissed workers start looking for a job right away.
Make job offers on Thursdays. If candidates need time to think, you can give them one extra day. If you give them the whole weekend, they may find another offer.
Give good job reviews on Fridays. It sets the mood for a good weekend, which can be a reward in itself. It also prevents satisfied workers from "kicking back" for the rest of the week.
Give poor job reviews on Mondays. This provides employees time to work out improvements during the week, instead of stewing about them all weekend."
So, this is completely irrelevant in this case due to usage patterns (a CC network should not push on a Friday unless they are staffed over the weekend), but we push on Fridays at my company. We are a clinical testing laboratory and we do not receive samples or new orders over the weekend, so it makes perfect sense to deploy on a Friday and deal with potential issues when no one else needs to get work done.
>now I'm imagining a Visa IT bloke going to the pub, presenting his card and then shouting "oh SHIT!" and running back to work
[1] https://www.fiscal.treasury.gov/fsservices/gov/pmt/eagleCash...
Make it an alternative it deserve!
Their privacy policy (which was hard to find) doesn't describe how they handle your transaction data, yet almost half of the policy is describing how they're going to collect and disclose (web) information for advertising.
Raising money (around $350 million recently) to hire consultants to figure out a monetization policy.
Still no chance I will put down my AMEX. 6% cashback at Grocery stores, 3% at the pump, and 3% at the department store I shop at. Even if I carry a balance sometimes I made almost $700 back last year.
SME Visa/MasterCards still give around 1% in airline miles.
Groceries is a quite big expense part for me, so REWE, Aldi and tegut in Germany are quite good for earning. Other expenses are traveling, where basically everyone accepts Amex. Starbucks accepts is as well, quite a lot of McDonalds and most fashion retailers as well.
You probably can't survive on Amex alone, but at least in Germany there is a quite big chunk that you can cover.
www.amexvicinity.com
Can't get cash from any ATM right now using my Visa Debit card
Might've been an offline payment, do you see it in your online banking?
Honestly, I really enjoy using my credit card. I can buy anything, anytime, online, the customer service department always resolves fraud quickly, and they even pay me to use the damn thing
I pay cash often but even so I very rarely have more than $1000 in cash at any given time.
... FDR confiscated the gold lol. If they want something of yours, they will take it.
https://en.wikipedia.org/wiki/Executive_Order_6102
In the end.. It's you, through slightly higher prices on everything you buy every day because retailers have to price in the cost of credit card fees that pay for all that.
Of cash used in bigger transactions that are replaced by credit cards? No way
Anti-nerds should get kicked but I probably got shadowbanned somehow by now ;)
Do retailers actually do this? I briefly worked in retail a while back and the payment processing fees(online and offline) were all considered to be part of the cost of doing business and essentially taken up by the merchant.
Today I provide ecommerce solutions and all my merchants haven't priced in the cost of payment processing either. They aren't necessarily happy about it but they consider it to be part of the cost of engaging in commerce in the modern world otherwise they'll be annihilated by their competitors if they don't provide easy ways to accept payments from their patrons.
I understand you are referring to Cashback "Rewards" but at the end of the day, a credit card is still a Loan.
You are borrowing money from the company to pay for goods and services and for all legal purposes you are a debtor.
TL;DR: The "pay off balance within the month grace period" works only if you are on top of it all the time. Miss something even once, or you move or are overseas or something, then their penalties, fees and everything else kicks in.
Again, it's a Loan, so all the operations and consequences of taking on a debt applies to credit cards, and to you as the borrower.
If you think about how many people using the "maxed out CC" as a loan because they cant get anything else, the financial model looks rather sound. The interest rate on those things is drastic if you are no longer in the grace period, and its an easy trap to fall into, especially if you are falling on bad times or are simply gullible.
I dont think people who have their CC balanced at the end of the month are the business model. They are in the business of providing high interest loans.
If you pay off your card every month, the credit card companies consider you to be a bad investment, and they even have names to describe customers like you -- "deadbeat", among others.
A customer paying off their full balance means little risk yet they still make the 1-3% processing fee.
I'm rolling my life back to the 1980's. :D
If you lose x% of sales on a day due to customers not having alternative forms of payment... is there anything a merchant can do to recoup their losses?
Like... BITCO apple pay/android pay
I've never seen it in Europe.
[0] Source: I used to work in payments [1] https://www.visaeurope.com/newsroom/news/vi-to-acquire-ve
Sadly. Visa Europe had some quite good policies such as banning ATM surcharges. It also made the payment sector seem a bit more european, now it's back to the US-duopoly.
On topic: Visa Europe cards are denied when used in other countries outside of Visa Europe.
It always worked fine at US ATMs, other than the first time I informed the bank I was going overseas, which apparently they interpreted as 'please disable my card'
International cards always need to be ran as credit in the US, not matter if it is credit, debit or prepiad.