I cannot believe that Visa transaction overhead would be higher than Amex - there's something going on behind the scenes here.
I don't think this is the end of it either, it smells like a negotiation threat. Visa have a larger market share overall (80%, including debit cards [1]) but Mastercard leads in credit cards. Amex has always been fairly niche because it's not accepted everywhere.
I think situation in 2021 is very different in London: AMEX is accepted nearly everywhere in central London (Even on markets etc), there are ofc some shops that don't take it but generally AMEX is widely accepted.
Re: Mastercard
It seems that Mastercard is more widespread among "hot" banking startups, ie I can create virtual debit Mastercards on Revolut and Monzo
Other than some occasional small restaurants/pubs, and a few small indie shops, its basically accepted everywhere here in Edinburgh, I have a corporate amex and use it for expensing business dinners very often, and supplies from office shops, supermarkets, etc..
I used to have a corporate Amex, and it was a nightmare to use it in London. Even in places that said they accepted it, when I attempted to pay the card reader rejected it. That was about 5 years ago, maybe times have changed - it would be great to see data rather than a mixture of anecdotes.
Yeah, my success rate for the corporate Amex in Europe is 70-80% which means the remaining time I need to fill out more tedious paperwork to get reimbursed to my personal card. The US based finance team continue to insist its much better now, but a 20-30% failure rate is too high
> It seems that Mastercard is more widespread among "hot" banking startups, ie I can create virtual debit Mastercards on Revolut and Monzo
They were definitely first in this space but Revolut has issued Visa's (in some cases) for a while now, and for instance Wise has recently switched from MasterCard to Visa entirely.
I was looking at HSBC’s credit card services earlier; they have a mixture of VISA and Mastercard, though they tend to use Mastercard for the more high-end services.
First direct (HSBC) has recently switched from Visa to Mastercard. The switch felt sudden, and I wouldn’t be surprised if it was due to negotiation that fell through.
Natwest are also swapping to MasterCard debit once cards expire. I just presumed the issuing bank had negotiated a more favourable interchange rates than using Visa.
(MC taking less of a cut of the final fees then Visa, so the banks getting a higher precentage of the fees then they would have sticking with Visa. Lets say MC gave away 5% of their cut to the banks, keeping 95% of the your slice of the pie when you are processing more pies is more than 100% of your slice of fewer pies if you get what I mean).
Quite the opposite in the UK, at least over the last 10 years or so.
99% of debit cards are Visa, and most people buying stuff on Amazon would be using a debit card, folks only really use credit cards for large purchases and things like travel, here.
Even when it comes to credit cards, I would say Mastercard has like a large chunk - like 80% in terms of institutions (but who knows in terms of actual customers), I would say.
Barclays and HSBC are the only majors that do Visa as far as I know. And Vanquis which is a junky one for people with bad credit.
The other majors like Lloyds, TSB, Bank Of Scotland, Halifax, Natwest, RBS, are all Mastercard. Same with most smaller banks like Virgin and CapitalOne, and store branded ones like Sainsburys/M&S/Tesco, too, as well as the remainder of the popular bad-credit cards like Ocean, and Aqua. Mastercard.
You're right, my perception was influenced by how many of my cards are debit cards or debit-like (i.e. prepay of some kind). When those switched issuer over the years, it was always Mastercard -> Visa.
We put all our purchases on credit cards here in the UK (London) - but pay them off monthly. Amex Gold and Barclays Platinum Visa (it has 0 overseas fees, but a bit of a stingy limit. mostly just used where Amex isn't accpeted). Amazon lets you spend Amex points, so guessing the tie up runs deep. Best not to read into fights between gods.
100% I pay for almost everything on AMEX to get the points and use Monzo debit for the rest. Amazon has my amex linked and I use it for 100% of purchases.
Most people in the uk chase points and credit cards have much better points and bonus' than debits.
> most people buying stuff on Amazon would be using a debit card, folks only really use credit cards for large purchases
Huh? I'm in the UK, have been an Amazon customer for over 20 years and have always used a credit card for everything. I didn't even know you could use a debit card, and can't see any reason you'd want to. Paid off in full every month, better consumer protection, what's not to like?
Well, the predatory business model, for one.
The reason your credit card company can offer you "better consumer protection" and other benefits is because they count on a percentage of people not paying off their debt in time (and thus making more money out of them).
Also, I personally wouldn't want "better consumer protection" to be mediated by a private company. That should just be the default.
You actually get much better payment protection from a debit card than people are generally aware of. In the UK, the difference between a debit card and credit card is actually not very big due to legal protections (although you might have an easier time claiming off your credit card).
" the time my debit card did get stolen somehow, my bank did refund out of goodwill" - IMHO not, depending on when that happened, the bank would not have a choice because of EU payment service directive which extends similar (but not exactly the same) protections to all payment instruments including debit cards.
It's not necessarily predatory, so much as they take a couple percent of everything that flows through them. Also, they don't take the hit on chargebacks, the merchant does. Those two things cover purchase protection just fine without relying on people getting hit with high interest rates.
And the cost of handling a debit card transaction is less than either of these.
In bits of Europe where it's allowed (like here in Denmark), it's not unusual for shops to add a percentage to the total for payments by local credit card, business credit card and/or foreign credit card. I haven't yet seen a shop with a different price for cash vs debit cards.
No, it’s not like at some point merchants said “oh yeah, let’s add 2% to account for credit card processing fees”.
The appeal of credit cards is higher volume - more purchases because people can put it on credit, it’s more convenient, etc. That’s why you’ll see even roadside fruit stands offer credit card payments.
Plus stores are in competition with each other (to varying degrees). Some will choose to absorb the entire 2% or a part of it since, in their mind, it’s a net positive trade off.
It’s like saying a 5% increase in property taxes are just passed through as a rent increase. It all depends on the market. The right answer is something between 0-100% is passed through.
Here's why: two debit cards, one for receiving money, one for spending money. Automated payment from the 1st one to the 2nd one once a month with a fixed amount you expect to spend in a month.
Nothing to pay off, you're spending your own money, can't be overcharged, can't go below zero, if someone leaks your spending card they can't touch the majority of your money, no scummy business practices.
Never owned a credit card, don't have the slightest wish to do so.
I guess he's trying to compartimentalize so that, if the spending account is compromised and depleted, the main-income one is untouched.
Seems like a lot of work to do what CCs do automatically. I guess the upside is that crazy spending is impossible (well, if you make sure to forbid negative balances on the spending account) and it's impossible to accrue interest.
I'm with Barclays and Lloyds, and neither can go into negative(well, technically they can I suppose, but it's extremely hard to do. Any debit card or direct debit transaction will just get declined if it's about to go below 0).
I haven't lived in Europe for a while but it used to be common to issue online-only debit cards (VISA Electron, Maestro etc) for this reason, have these fallen out of fashion?
There's a difference between having an arranged overdraft, and being able to have a negative balance (also known as an unarranged overdraft).
Monzo's own help pages explicitly state that your balance can go into the negative, because offline debit card payments will not be rejected. They'll also gladly take you into the negative if you owe them money (e.g. through a Monzo Plus or Premium sub, or use their Flex service).
Search Monzo help for "Unarranged Overdrafts".
As far as I'm aware, there is no UK bank that will guarantee they will reject all payments and never let you go into a negative balance on a debit card transaction. This is also a profit centre for them, so there's little motivation to actually do so.
The mandated fee-cap introduced a few years ago has (or rather should have) curbed the view that overdraft fees are a cost centre. Banks are extremely proactive now, as soon as there is a hint you'll go in the red they'll ping you in a bunch of ways and remind you of what you can and cannot do; so I wouldn't exclude that some (or all) might now refuse to complete purchases when it would push you too deep into unarranged territory, because they cannot charge you more than a fixed amount, so it would become basically a free loan.
Don't most people do this with a credit card they pay off most months? This is what I do plus credit cards give more protection than debit cards.
I have the majority of my net worth invested at one of my brokers and I tend to hold minimal cash in my bank account...better to be invested than hold cash these days.
The flip side to this is using something like an Amex which offers insurance, points, business lounge access and much more. Set up the card with diret debit (much like your automated payments) and never spend above what you can afford.
You now have perks, points, insurance, consumer protection and still zero worries.
It's pretty expensive to have an Amex card, I had one for a bit, but ended up not really using it so the £ they wanted seemed like a rip-off in the end.
The link I shared is a list of cards from Amex that don't charge any fee. Anecdotally the number of places that reject my personal amex is very close to zero (there's one cafe enar me which doesn't take it).
> I see no real reason why to use Amex over Visa or Master/Maestro
Cashback/rewards, and it's accepted on Amazon in the UK after this year is a really good reason to use it over Visa at least. Maestro is non-existant in the UK. Maybe mastercard is a better choice, but I carry two cards _anyway_ , so one might as well be an Amex, and the second should be a mastercard?
Majority of hotels around Europe don't accept it, same with restaurants, small business, shops.. there is not a single reason to own one in Europe, even with cashback (cashback to what actually, since i cannot use it anywhere)
I've travelled around the UK, Ireland, France, Spain, Italy and almost exclusively used my Amex over the last 5 or so years.
> Majority of hotels around Europe don't accept it, same with restaurants, small business, shops
I completely disagree. Almost every restaurant, hotel, cafe takes it. All major airlines accept them, the major train operators accept them, the major hotel booking sites and airbnb both accept it.
> there is not a single reason to own one in Europe, even with cashback (cashback to what actually, since i cannot use it anywhere)
Well there is, cashback, and contrary to what you're saying it _is_ usable in europe. You can book a flight with Ryanair, a train on trainline, hire a car via hertz/sixt/europcar, book a stay with airbnb/booking/hotels, and eat out in restaurants and local cafes all with an amex.
I spend on business travels around Europe 1/4 of the year, 2 years ago we were moved from Visa to Amex and the company reversed the move after 1 month back to Visa.
Couple of major hotel chains didn't accept the Amex.
In Dublin specifically I had huge issues with Amex, not to mention Germany and Scandinavia.
It was just bad experience all together
What about all the free money you're leaving off the table in miles and cash back? I've had a credit card for about 3 years, and while it isn't much, I've never paid a dime in interest and I'm up roughly $800.
Perks on credit cards in the UK are almost non existent because the fees are so low compared to he US. Historically the EU regulated to crush credit card transaction fees.
That said, I do get annual cashback of 1% on one of my cards.
Big corporations giving people free money sound kinda unbelievable, don't you think? They must actually make money on card holders for this to be profitable. The obvious way is that some people will overdraw sooner or later, the other is that people with credit cards simply tend to spend more (some say about 10-15%). The average credit card debt in the USA is more that 6000$.
The "average credit card debt" is a bit difficult to really measure. That isn't necessarily the amount of interest bearing credit card debt which IMO is the real concern.
I've have some credit card debt, none of it carries any interest. When I buy appliances or furniture I usually take the interest free financing despite having the ability to pay. Why pay a few grand today when you can spread that out interest free for 2 years and let that value appreciate? I would have lost out on tons of money if I had sold investments up front to buy those goods. So instead of getting rid of all that money a year ago, I got 30% gains in the market.
Which demonstrates that you in fact are bad with money, so the system is working as intended. If you don't trust yourself with day-to-day spending, why should a lender trust you with a loan representing months or years of income?
Keeping an eye on your spending is great, but you can equally do that with credit; it's easy to look at or download transactions in your credit card app or website. Unless of course you don't trust yourself not to overspend, in which case my point stands.
You are aware that interest rates have been incredibly low for years? They have to go up to keep a lid on inflation, and the BoE needs to be able to do that without worrying about mortgage borrowers being overstretched.
I've not seen a credit card where you can't automatically pay the full balance by direct debit each month. You do still have to do some maths (actual balance = current account balance - card balance) but I don't worry about it not being paid off.
It isn't that a lack of credit card hurts your credit rating, but that a lack of any credit hurts your credit rating in Canada or the US.
There are other ways to get an initial credit rating than a credit card, although I agree that this is the path most easy, and chosen by many to get that first rating.
The method I employed, was to buy a car and had a parent cosign. I made all the payments, and this was enough to kick start, and give me at good credit rating.
Ah but, for most people it's easier to get a low-limit credit card in the UK, than it is to get any other unsecured loan.
I also didn't say 'you need a credit card to get a good credit score', I said not having one will negatively impact your score. This is 100% correct; Your credit score is made up of various metrics on how you manage debt, one of which is credit cards. You will get a % boost if you have a card that you manage well, whereas without a credit card, you will get no boost at all in that category. Granted, you may make up for it overall in other categories, but in the main, for most people, my statement still stands. Credit scores start at 0, and only improve if you show you can manage debt across multiple products.
You can use direct debits instead of loans and are available for a really wide variety of payments, so is easier and safer than getting a credit card for many people.
Hmm. I think the issue here is, we are all in different regions. Not only does the country matter (Canada here), bit the region too (Quebec, Napoleonic civil code, and provincial laws).
Credit bureaus are definitely legislatively controlled here, and court decisions have an effect on them too.
Not only this, but getting a credit card and not using it can cause an issue for your credit, so it's better to setup direct debits and other forms of credit than it is to get a card you never use.
Considering the article is about the UK, I'm not sure how relevent US utilisation is in relation to it.
That aside, I didn't say low utilisation, I said no utilisation. This has a good chance of your card being cancelled by the card issuer, which has a negative effect on your credit.
Bottom line is, unless you plan to use the card, there are better methods of increasing your credit score, so it's not a good idea to get one.
That's odd, I got a mortgage approved at 19yrs old, in the UK, with no credit usage/history whatsoever. I had a credit card but I'd held it for about 3 months at the time, and have never used it to this day.
Only since then have I actually had anything on my credit report (monthly broadband payment, phone contract, monthly car insurance payment because I didn't want to keep paying the whole 3k up front every year after moving out, etc) and despite that the score has remained unchanged.
Yes, a few banks now offer 95-100% LTV mortgages for first time buyers.
In our case, the bank required a savings account containing a 10% deposit in the name of a family member, which is returned to them with interest after 3 years (unless you fall into arrears). ~50% of that money was our own savings and the rest was from parents savings, which allowed us to get on the property ladder with ~1yr less saving and no cost to our families after the 3yr period.
The issue isn't not having a credit card, it's never having used any credit to create a good credit history. Setting up a few direct debits should work in lieu of getting a credit card.
I know this is a thing in the US, but in Norway where I am from it doesn’t matter. Nobody gets a credit card here improve credit rating. I doubt people do they in most of Europe.
When somebody does a credit check on you they don’t get a score, only a remark on whether that person has done any negative with respect to their credit worthiness. Thus there is really only the negatives which count.
Credit reference agencies instead report credit history.
The difference is a subtle but very important one, as it allows companies to assess your individual circumstances, rather than base decisions on an arbitrary score.
The above misunderstanding is so commonplace that the Redit UKPersoanlFinace sub had (has?) a bot explaining this on every UK post mentioning 'credit score'. Here "credit scores" are instead a marketing gimmick launched by credit reference agencies to get consumers to subscribe to monitoring services. The 'score' they give is meaningless.
A credit rating basically isn't considered for a mortgage in the UK. They will check a report, and maybe request you pay outstanding debts (I was asked to clear my CC balance before completion both times), but unless you have a fraud marker or are bankrupt it won't affect you. Mortgages are secured on the asset, so it's far less risky than a personal loan of 5x less - the bank can seize the asset and force the sale of the home (and that difference in risk is reflected in the difference in borrowing rates).
My experience is they do indeed dig into your credit report and will approve/deny based on it. Not sure where your information to the contrary comes from?
Most UK CC T&Cs state explicitly "If you have a home, we will go after it if you default." Personal loans have similar recourse.
Neither are truly unsecured. It just takes longer than an outright repossession because it takes two or three court claims instead of just one.
The debt collection industry relies on this, and regularly forces sales of property to pay back CC and other debts.
So CCs are disastrous for people who can't pay their debts. Not only are the interest rates extortionate, but for lenders they're almost as safe as a secured loan. And because of the high rates they can be considerably more profitable.
Maybe you displayed the ability to not go into debt unnecessarily, which could be also a signal of financial ability.
Getting into debt just to demonstrate you can pay it off is a bit like having to catch a virus so that the doctor can tell you you're healthy once you're done with it.
But it's true that in the era of negative interest rates, only silly people don't owe money.
I guess using the analogy — your doctor won't tell you "you've a great immune system" if you've never caught a bug at all. Maybe you've a really weak immune system, they just don't know.
Not going into debt unnecessarily is a great thing, but it's not a data point in your favour, it's the absence of a data point.
It's more correct to say that never having any credit facility negatively impacts your credit rating. I have a credit card now, but several years ago I didn't, and I had a perfect credit rating, by dint of the multitude of other credit agreements that I had for the general running of my life, like mortgage, telephone, internet, etc.
The way this works in the US is nuts. I had to get a parent to co-sign the loan for my first car (or else they wouldn't lend me money at any rate), but then I spent a year paying a monthly fee to borrow my own money with a "secured credit card" and instantly I'm good for 40 grand, apparently.
Isn't it completely rational from the lender standpoint? First they make sure you will be profitable for them (involve other people who can be milked), then they offer you money and hope you can't pay back on time.
That's not how it works in the US currently. You go through that process to get your first credit card, yes, but you do not get approved for $40k. My first card was $500. My best one now (with excellent credit score) is $5k IIRC.
If you got approved for $40k, there's something else funny going on.
Specifically, the main protection is that if you buy something that turns out to be faulty or the company never delivers the goods, you can get the money back without going to court. You get the money back even if the company goes bankrupt.
Some banks offer similar things on debit cards, but it's always at the banks discretion rather than required by law.
In the UK, credit cards are free (some specialist cards aside), including an automatic direct debit so you never forget to pay it off, so you never get charged interest.
Never paid a penny in fees or interest in over 15 years.... and an annual statement of fees (issued by law) informs me of this fact each year.
Same in the US. Credit cards are so convenient and free and come with rewards. Of course most people don’t realize until they are older that all that ‘money back rewards’ was essentially paid by themselves originally, by the vendor paying the credit card company a fee on every transaction. The issue is that credit card companies build in requirements to be endorsed that they don’t charge different prices for cash only transactions often.
Yes. Anyone paying fees on a credit card should jump ship, that's a huge red flag. And I've made more in cash back rewards than I'll ever pay in interest.
There is no "inevitable forgot to pay it off". Last century when I was old enough I got a credit card and the bank set it to automatically pay off every month. The bank says to itself, full balance of this account this month is say £462.83 and must be paid on or before the 7th of December, then it sets a transfer to occur from my checking account for the amount £462.83 on the 7th of December. No "forgetting" possible.
Indeed if say an IT problem occurs and they can't do that transfer under UK law they eat the fees incurred. "The customer must be made whole".
As to fees, the merchant doesn't have to accept cards, as we see with Amazon, if they don't like the fees. Why should ordinary consumers care? When we were part of the EU the cards couldn't charge excessive fees, now Brexit allowed them to unlock this potential source of profit.
Sure, I've taken out loans, had several mortgages, multiple bank accounts, paid all my utility bills. All of that can influence your credit scores.
It is possible some people could have so little credit history that having a card for a while might be beneficial. I don't know enough about the system to be sure, so maybe I was being a bit flippant, for which I apologise.
It's wildly overstated in the US. Having a CC and not paying it off in a timely manner definitely affect your score but the difference between having a card and not having one isn't as big as people make out.
If you have proof of income you're going 90% of the distance.
In Europe just using debit cards is perfectly viable in 99% of the cases, however when it comes to car rentals you are still in some locations forced to provide a 'real' credit card.
I write 'real' since most of the FinTechs like Revolut, N26 etc often issue debit cards that may fail in exactly that situation. It doesn't help if your account is flush with 10k USD and a car rental could easily block 2k for claims on your debit card, some will just not accept Revolut & co. Thus I am always forced to carry an emergency backup credit card from a major bank just to be on the safe side...
Very much looking forward to the day some other means of international payment (crypto?) will be generally accepted.
They require a credit card because credit card companies have robust ID and credit checking. If their ID checks weren't great, someone could steal the whole credit limit.
Banks and debit providers also do ID checks, as required by law, but don't check anywhere near as hard, since there is no way to steal money from the bank if your account can't go negative.
I am so fortunate to live a in a truly free country that has not yet caved in to most of the western crap despite being a western first world country. Spain.
Here the rental companies accept even cash, and the person who pays doesn't even need to be the same as the one who rents.
In the UK, it's really hard to get a bank account where they'll do that. Instead they'll pay it, call it an "unauthorised overdraft" and then charge you for that. This is their business model - it's how they make sufficient income to operate.
There are "basic bank accounts" which don't provide a credit facility, but these only exist because people with poor credit histories can't get bank accounts otherwise, and the regulator has threatened to enforce their availability otherwise. However since this means that there currently isn't any rule, the banks make it very difficult for an ordinary person (with good credit) to open a "basic bank account".
> In the UK, it's really hard to get a bank account where they'll do that.
I'm pretty sure all of them do, just ring up your bank and ask them to set your overdraft limit to 0
I've certainly done this with HSBC & Santander in the past, and when I got my Monzo account it was 0 by default (You had to sign up for an overdraft if you wanted one).
How is this better than having a single credit card that gives you automatic protection and insurance on everything that you buy without having to think to stay under your self imposed limit otherwise you have to manually top up the card with the amount that you need to spend?
My mom has exactly the same system with her two debit cards and I have not taught her that - she is naturally smart. So proud of her and you too ;) Cheers!
You must be an actual anomaly, like yeah, what you are saying makes sense, but you are the only person I've ever heard about who does that here in UK. Everyone I know, me included, just uses debit cards for purchases everywhere including Amazon. I have a credit card but I very very very rarely use it for anything.
>Everyone I know, me included, just uses debit cards for purchases everywhere including Amazon.
This is just as anecdotal as GP or indeed myself. I never use a debit card and don't know anybody that uses them other than for getting cash out of an ATM
How old are you? People using credit cards in my circle (early 30s, London) are firmly the minority. If we split a bill in a restaurant it's all debit cards. Maybe there's one person with an amex or something.
Do you check everyone's card when you split the bill? What makes you think the others are debit rather than credit cards?
For info: the debit & credit cards from my bank look almost identical. The only difference is one says "credit" in small black text. My credit card handles exactly like my debit card in terms of tap-and-pay etc. I just wouldn't use it to take out cash from an ATM, but then I can't remember when I last needed to do that.
Uk here, I use credit cards for everything. Used wisely, consumer credit is incredibly useful. Example: bought a 4k motorbike, dealer finance or savings drawdown would have cost me hundreds; slapped it all on an 18-months 0% card and am now slowly repaying it on my own schedule, at no extra cost, while happily riding the thing.
Yeah of course, I do the same thing - when I said I use mine "very rarely" I meant that I use it for things like buying laptops or other expensive things, to use the 0% interest period. I just don't know anyone who actually uses it for day to day purchases from amazon and such, I just use my debit card for that.
I have two credit cards, one of them I haven't used in 5 years at all, the other I use as described, and according to Credit Karma my credit rating is 690 our of 700. We just remortgaged the house too without any issue.
So yeah, I don't think I care too much about my credit rating at all, it doesn't seem to be affected by this in the sligtest.
Fair enough if it doesn’t impact your day to day, but it will definitely impact others.
Also worth noting Credit Karma uses TransUnion which is only one of the big three rating agencies, and arguably the least important compared to Equifax and Experian.
Exactly; with a credit card paid off monthly by direct debit and an interest paying current account, you're earning interest on your cash and not paying any on your purchases. What's not to like getting what's basically free money with a little bit of no-brainer arbitrage?
What is this unicorn you speak of...? :) jk, I know some exist, I've just been irrationally faithful to a bank that probably does not deserve it anymore (coop)...
(But I keep my savings in an account that offsets against my mortgage, so I'm effectively getting a similar deal in practice by not accruing interest on that.)
I'm in the UK and always prefer to use a credit card whenever possible. It automatically gets paid off every month so I never get charged any interest, I get points worth minimum 0.5% back for all purchases, and benefit from the fairly strong UK consumer protection laws here.
The only exception where I'd prefer a debit card is in very rare cases when there's an additional fee for using a credit card. That's usually for large sums and/or international payments though, in which case I tend to use a specialised FX company or Revolut. My normal debit card is literally the last card I ever use, when all else fails or is more expensive.
> I have a credit card but I very very very rarely use it for anything.
But why? The credit card is strictly better isn't it? I thought the main reason people used debit cards was that they got one automatically with their checking account and just never bothered to apply for a CC, but that's not the issue for you.
I don't know, when I use my debit card it just goes out of my main account, done, don't have to worry about it. On my credit card I'll have bigger purchases I made some time ago and I'm working towards paying them off - if I put all my monthly purchases there too, I'd lose track of how much of that I need to pay off monthly and how much I've got left on my main account.
And yes, it can be easily worked out but I guess I just can't be arsed. And for purchases under £100, credit cards offer no additional protection whatsoever, so for my daily shopping I'd just be making my life more difficult for no reason.
> And for purchases under £100, credit cards offer no additional protection whatsoever, so for my daily shopping I'd just be making my life more difficult for no reason.
They offer better protection against fraudulent charges though? If your card gets skimmed it doesn't matter whether you were paying £5 or £5000.
I never understood this point - my debit card has been charged fraudulently couple of times, all it always took was a quick call to Barclays, 2 minutes on the phone with the agent and the charges were reversed and the card cancelled.
What exactly can a credit card do better than this?
You called and the money was available for you to spend within 2 minutes? When it happened to me I had to go in and fill out a form and wait about a month (not easy on a student budget).
Yep. I rang and said there's a payment I don't recognize and that I didn't make, for Uber in Vietnam. The agent was like "yep, looks fraudulent, we'll cancel it right now and are sending a new card straight away". Money was back by the time I disconnected from the call. Second time it was someone buying stuff on PSN with my card, exact same situation - had the money back instantly.
A friend of mine had her debit card skimmed years ago. The skimmer used it in the area around town, going to restaurants and buying gas in the area. When she noticed the fraudulent charges (transaction declined) she contacted her bank. It took a week for most of her charges to be investigated and reversed, in the mean time she had absolutely no cash.
I don't know in Uk or USA, but in the rest of europe there is no difference at all in protection against fraudulent charges between a credit and a debit card.
There's no difference with fraudulent charges in the UK, as far as I'm aware, but when you buy a product or service on credit, we have a law saying the credit provider and retailer are both liable.
This means for example if you buy a flight and the airline goes out of business, your credit card provider will need to refund you. Also if goods are faulty, you now have two possibilities to get your money back - and the credit card companies are usually more amenable.
Nowadays with open banking, apps are starting to be able to aggregate all your accounts and credit cards into a single pane of glass. It isn't perfect yet, but it's getting there.
1. (As everyone says) consumer protection. I can dispute a charge to a CC and am not standing out the cash (unlike debit)
2. Debit transactions don't have any inherent limit. The bank might flag a very large transaction but once a debit transaction is underway it can't be stopped. I had > £10k stolen from my online account via a debit transaction and though the bank made good, still, bad taste.
3. Most important if you are young - using (and paying off) credit card will improve your credit score which helps you when you do need the credit.
4. Delayed payment. Even when you clear your debt every month you're still getting the benefit of 30 days free credit on your purchases. In our current savings-rate environment this is somewhat moot but anyone who travels for work or has significant work expenses that they have to wait to get reimbursed for will find this a major feature. Lending your employer money really sucks.
5. Rewards cards. These have gone crappy over the last decade but if you are in a role where you have significant work expenses or where you put most of your expenditure through the CC it can be worthwhile to hunt around for and switch cards for deals. Spending £1000 at Amazon/year on a debit card will get you exactly £0 in rewards. Even 1% cashback would be worth having.
The only downside to CC's I see is that some people can't trust themselves with credit - they'll spend up to their limit and get into a spiral of debt. If you don't do that, they're better than debit cards in my opinion.
1) I've been able to dispute payments on my debit cards without any issue, they were always reversed instantly by the bank. Maybe I've been lucky, I don't know. And for the "bank is liable for your purchases" thing - that doesn't apply to anything under £100 either.
2) That is a stupid limitation of UK banks, not debit cards in general. I have a bank account in Poland and for the debit cards with that bank I can set individual limits for internet transactions, terminal payments, CNP(card not present) transactions as well as ATM withdrawals - with separate daily/monthly/temporary limits. Why British banks don't implement this is unfathomable to me.
3) I suppose, I have no comment on this really.
4) yes, but then you need to remember to pay it off and how much exactly, which is a bit of a pain if you have your daily spending mixed in with bigger purchases that you want to pay off over a longer period of time.
5) Again, personal experience - other than 0% interest on purchases, never had a credit card in the UK with any rewards whatsoever.
And yeah, it's not about downsides of CCs - it's just that when I pay for my daily shopping with my debit card it's out of my account, I know how much I have to work with at any given time, done. As I said elsewhere, I can't be arsed to work out it if my spending is spread across multiple accounts and different forms of credit.
I was going to comment "mBank, isn't it?" but then realised that in such a competitive market as you have in Poland probably every bank's implemented this already.
Is there ever a situation that you can use a credit card but not a debit card? There are occasionally places that only accept debit cards, but I think the only time I've had a debit card refused was when hiring a car.
The reason for that is the car rental company does a "pre-auth" that ties up some of your credit limit (reduces your "open to buy" amount), in case you damage the car or don't return it with a full tank of petrol.
Hotels will sometimes do the same for a room night plus potential minibar charges.
The pre-auth gets released when you make the payment at the end of the car rental period.
"Pre-auth" works the same way for VISA/MC debit and VISA/MC credit.
The amount is (temporarily) deducted from my available balance when I use a debit card, just like it is deducted from the credit limit when I use a credit card.
About 10 years ago a hotel I had prepaid wouldn't take a debit card for a damage deposit, but that's the only time in my life I've been asked for credit instead of debit.
A huge number of replies arguing from personal experience, while the single comment providing data from a primary source is ignored.
Come on, Hacker News. You are supposed to be better than this — repeated discussions with the same "but in Europe" "I've do X so Y doesn't happen" comments is why I stopped reading Slashdot.
I've downvoted several anecdotes in this discussion. They contribute nothing to the discussion.
NatWest have recently informed me that my Visa Debit card will be changing over to Mastercard Debit at the end of the year.
Feels like a lot of places are shunning Visa at the moment.
Other than getting a new card number (which some could say is a GOOD thing) switching from Visa to Mastercard in the UK has hardly any impact as 99% of places accept both.
> folks only really use credit cards for large purchases and things like travel, here
This is delusional - the British have as many credit cards as people, £56.5 billion on credit cards, and 40% of credit card transactions were contactless, so certainly not large purchases.
Not quite that bad. In 2019 it was 82% visa 17% mc
and since there has been a move towards mastercard. My main bank, FirstDirect switched my debit card over this year. I also use Wise which is also with mastercard.
Vanquis also for immigrants and people fresh to the UK. As an EU national I remember being the unbanked pariah who had to pitch around 20 high street banks to open an account.
Then to open a business account was even harder, actually similar difficulty to getting an investment.
This was way before Revolut or Transferwise, it's a non-issue now.
There might be something going on with Visa in the UK. I've noticed that all the bank accounts I've had that used Visa for debit cards for many years all seem to have switched to Mastercard recently. Presumably they wouldn't overcome this much inertia unless there was a substantial financial incentive. If card issuers are finding that their costs are too high, chances are payment processors are as well.
Same here, thought I thought was being scammed but everyone else in my family got letters saying that their cards are moving to Mastercard debit in the coming months. I doubt Visa will have much marketshare even in the debit card market by the end of next year.
I think both Visa and Mastercard are increasing their fees like that, but only for payments between the UK and EU (and pretty much simultaneously too - aren't duopolies great?)
They have, but it only applies in the same jurisdiction. So it still applies to intra-UK transactions and to intra-EU transactions. But not to transactions between the two.
Amazon Australia has started charging 0.5% for Visa cards. In Australia a merchant can charge more for payment by credit card but only up to the actual extra cost they incur.
I live in the Netherlands and biggest supermarket chain here, Albert Heijn, is strictly Mastro-only. This is not a problem for the locals, but you will find angry reviews left by tourists on pretty much every ah branch in Amsterdam on Google Maps.
Sure, and in theory that should be the prime example of "free market" at work - merchant doesn't want to accept visa/mastercard? They will lose customers then, if that's acceptable to them then that's their choice.
Same if they pass on the card costs to the customers though - card user doesn't want to pay the true cost of using their card, they can choose to shop elsewhere.
This would make sense if (and only if) all other things are equal. In reality it is slightly more complicated than that.
The second-largest chain, Jumbo, will happily accept my AMEX credit card. In many cases, the groceries are even (slightly) cheaper there. That's why it has been my preferred place to do the groceries for years. But I find my self goes to ah much more often than Jumbo recently, simply because I moved and there is one right across the street.
As a general rule, ah (and bol.com) do not accept credit cards (or debit cards that need to go through the credit card network). This can be independently verified on Google Maps if you look for those 1-star reviews.
There are a small handful ah branches (see below) in tourist spots that does accept credit cards. In all other places, you should see posters apparently made by the staff that puts red crosses on Visa, MasterCard and AMEX logos near the entrance and/or the checkout kassa.
> In sommige winkels kan je met je creditcard of buitenlandse pre-paid debetkaart betalen: de winkels op Schiphol, veel stationswinkels, de winkel achter het paleis op de Dam in Amsterdam en de winkel aan de Weteringschans in Amsterdam. Bij alle andere winkels kan dit niet.
Once I had an interesting experience at AH when I used my combined debit/credit card.
It wasn't a branch that accepted credit cards (it was full of crossed off card logos), the clerk saw my foreign card with Mastercard logo and said that wouldn't work but I insisted by showing it had a Maestro logo on the back. Reluctantly they said OK, go ahead and for everyone's surprise, it worked.
The transaction ended showing up on my credit card statement, and to this day I really don't know what happened. I know that international withdrawals (that should use Maestro network) appear on my checking account. Who knows...
I had a quick look at the rules here in UK, and yes, apparently you can still be charged, but only for using business/corporate credit cards, not otherwise:
If you force cash and credit card transactions to be the same price then the extra 0.5% is charged to everyone, and outside of extreme cases like this post there is little incentive for credit card operators to lower their fee.
> Visa have a larger market share overall (80%, including debit cards [1]) but Mastercard leads in credit cards.
I worked in credit card payments (on acquiring side).
Any market share advantage between Visa and Mastercard is very, very fragile. It is basically your choice which card to pull out for payment.
It is also why Visa and Mastercard these are so alike almost in every aspect. When one does something, the other copies it.
The only reason this is still split between two companies is exactly because of this parity between products. People have no reason to prefer one over other and simply toss a coin to make their choice.
When I had chance to configure my phone to do NFC payments, my bank supported it only for Mastercard, so I configured Mastercard and that's how it is now. I know a lot of people got Mastercard because here (in Poland) it was tiny bit faster than Visa.
If Amazon bans UK Visa, people will not stop using Amazon. They will either pull out the other card or grumble for couple of days and get Mastercard.
It is likely Visa has NO negotiation power here. They are the ones that have commoditized themselves and are easily replaceable for their competitor. It is likely Amazon is well aware of this and this is just a show of strength that will be followed by Visa submitting to it because they have no choice.
Yes, they are actually working together a lot. There is PCI (Payment Card Industry) and then there is EMV. There is probably more but the two have been important from my point of view.
The main motivation for this is to make payment technology transparent to the user (as in use any card anywhere, expect similar behavior, etc.) A lot of this is standardized so much that it is virtually the same for both.
And I know this, because it was my job to implement these standards. I calculated some 17 thousand pages of specifications in various forms.
Both Visa and Mastercard gain a lot form this because it is not a zero-sum game. Because of this cooperation people have been steadily increasing their use of credit card payments and this I think created a lot more revenue than they could have ever created for themselves by winning a cutthroat competition.
> "I cannot believe that Visa transaction overhead would be higher than Amex - there's something going on behind the scenes here."
Especially considering that card transaction fees (in the EU and UK) are capped by the Interchange Fee Regulation (IFR) [1]
But I suppose Amazon processes card payments in such huge volumes that they expect to get rates below the cap limits (0.2% for debit cards and 0.3% for credit cards), or Visa are applying excessive additional fees outside of the interchange fee?
Why would a larger cap benefit the UK or its government in any way? It's not like the "dividend" would be received by them, it's an effective +1% tax on all payments from consumers to the banks.
FWIW, as a UK Amazon buyer with a Visa Credit card, I received an email this morning with Subject line "Visa credit cards will not be accepted, starting 19 Jan, 2022" and nothing but my name in the body. A very, very basic email - interesting 'From' address though.
Received: from a0-156.smtp-out.eu-west-1.amazonses.com (a0-156.smtp-out.eu-west-1.amazonses.com [54.240.0.156]) <redacted>
From: "Amazon.co.uk" <amazon-offers@amazon.co.uk>
Subject: Visa credit cards will not be accepted, starting 19 Jan, 2022
Date: Wed, 17 Nov 2021 09:15:34 +0000
Content-Type: text/plain; charset=utf-8
Amazon.co.uk
<name redacted>
Please note that this e-mail is being sent from an e-mail address that cannot receive e-mails. If you have any questions and wish to contact us, click here:
https://www.amazon.co.uk/gp/help/customer/display.html?<redacted>
2021 Amazon.co.uk is a trading name for Amazon EU Sarl, for Amazon Media EU and for Amazon Services Europe Sarl, all of which have their registered office at 38 avenue John F. Kennedy, L-1855 Luxembourg.
That's interesting, mine definitely only has plain text (no text/html, checked via view source etc). Maybe it's a preference I ticked somewhere back in the mists of time.
I also used to tick that preference when a choice was provided, but have stopped doing so after encountering too many cases of text/plain versions being broken one way or another. Not that common, but still too much of a hassle.
Sometimes they are "empty" like here, or contain placeholders in place of the actual data, or just break random features (e.g. eBay prevented other users from sending me photos).
If this is a negotiation tactic, why is it not a global proposal?
Perhaps because bank transfer is very developed in the UK, and wire transfers could totally replace credit cards, with lower fees?
On mobile devices, the effort to set up a wire transfer or direct debit is only maybe 1 minute for most users, and that's a one time thing, and unlike credit cards they don't expire either. Fees for the use of the system are effectively nil.
Most users either have a MasterCard or have a visa, and the majority of people couldn't get the other without substantial hassle. It would normally involve switching to a new bank, which in the UK is less frequent than divorces.
That gives visa a lot of lock in - and the competition is no longer MasterCard but instead openbanking API's.
Presumably Amazon have some stats of how frequently each type of card is used on their platform, even if that's just aggregation done on the first 4 digits of the card number.
They are probably well placed to determine how many customers use Visa with them versus Mastercard, or even have both and use both on the website. The subset who have only ever used Visa on Amazon may or may not have an alternative card they could use, but they will presumably have factored in the cost of potentially losing the sale entirely as a result of refusing Visa.
With Visa so entrenched in UK finance, it's not going to be received by customers the same way as Amex being refused (let's face it, Amex is refused most places because the only people who use it do so because they are getting cashback which is paid for by the merchant having increased fees). Instead, Visa will be the card they've always used, so if Amazon stop accepting it, I think a lot of customers will just shop elsewhere instead.
If everyone using Visa credit cards stop buying on Amazon starting 19th January, Amazon will probably budge.
But since everyone has a debit card Amazon must be betting that if they do stop accepting Visa credit cards then customers will just shrug and switch card because they really, really need that stuff now.
This is not an improvement, it's basically saying you don't need to worry about Mothra because Godzilla will turn up to save us. Ignoring those who get trampled under the fighting behemoths.
> Perhaps because bank transfer is very developed in the UK, and wire transfers could totally replace credit cards, with lower fees?
Or, you know, Visa debit cards? Amazon don't actually let you pay with Faster Payments or direct debit AFAIK? And you can't wire transfer money you don't have, which is the whole point of a credit card in the first place.
No, this is going to be something weird about credit.
Has anyone successfully nationalised/regulated into sanity this business? It's 2021, buying stuff should involve neither precious metals nor weird faceless financial cooperatives owned by private banks.
Denmark has a standardized national debit card. Physical stores are not allowed to charge a fee, but online stores are (typically DKK1.50/$0.25). Works great, but obviously only for stores in Denmark. They are almost always combined with a Visa debit card on the same card for a yearly fee (typically DKK150/$25).
Downside of this as a tourist/visitor in Denmark at least some smaller shops force you to pay with cash since they don’t accept visa/mastercard but only the national debit card. Just a minor annoyance at least as a Swede since we don’t usually carry cash these days.
Why? There's a real cost associated with running the cards. In the US, that's paid by selling your data, by the percentages the merchants pay (which in turn is paid by everyone, even those customers paying cash) and by the extreme fees for not paying your bill on time.
If all these consumer-unfriendly practices are banned, you see the real cost of such cards. Same happens for many customers in Germany: pay 10€/month for a bank account with included VISA/MasterCard, pay 30€-60€/year for such a card, or use only a national card.
Funny how Europeans consider anything that they have to pay for a "real cost" that's justified.
What are your thoughts on ATM fees? Is there a "real cost" to maintaining ATM fees? Should it be passed to the consumer? Or is it an unfriendly consumer practice that Europe has rightfully "banned" (aka not common)? It seems to me they're just charging you another way by selling your data or whatever!
How much do Europeans pay for Whatsapp, by the way?
Also, can you share the European law that bans merchants paying a percentage for financial transactions to the payment processor? I'm unfamiliar with it, and am also curious to understand how Visa and Mastercard exist at all in Europe given the banning of this consumer-unfriendly practice.
> How much do Europeans pay for Whatsapp, by the way?
If I had my way, the 1€/year fee would be back ;)
> What are your thoughts on ATM fees?
I hate them, but I can understand why they exist and are still legal to this date (although it is inconvenient having to find an ATM that has a contract with my bank).
> Also, can you share the European law that bans merchants paying a percentage for financial transactions to the payment processor?
It’s limited to 0.2%, which is why the card companies have been asking customers to pay a monthly cost for the cards instead.
While not nationalized or regulated, Poland is an interesting example with its ubiquitous application of BLIK, a bottom-up initiative of major Polish banks:
"(...) at the end of 2020 BLIK overtook payment cards in terms of the number of transactions made in global ecommerce (Polish and foreign) for the first time."
You can use it everywhere: from your local convenience store to Uber or Amazon Poland. It's also a Polish Venmo, or rather Zelle, where you can send money p2p using a phone number.
They are now experimenting with contactless payments, as well as trying to integrate with international online payment systems, and if those are a success, the future of Visa/Mastercard in Poland is rather... complicated.
And if Poland continues to be the predicting greenfield it was so far for FinTech, the decentralized, national solutions like these are likely to largely displace the 3rd parties of Visa/Mastercard/Amex alike.
That having said, one of BLIK's board members is the Mastercard CEE country manager, so... looks like they do anticipate that change.
Indeed, it's super easy. And safer than cards, especially when withdrawing money from ATMs where you only type in a code on the screen, so nothing can get skimmed.
If it wasn't for the regular 2-5% I get back on my US-issued credit cards, I'd be mostly using BLIK only when in Poland.
Pretty much all Australian & New Zealand cards use a system called EFTPOS[1] in addition to Visa / MasterCard credit since the 80s. Fees are virtually nil, and payments are instant. They cannot be used for online purchases though, I believe.
I'm not entirely sure that network owned by private banks is the worst possible thing. If properly regulated and open to everyone on same rules and fees.
I would actually trust such one more than anything bought by government...
Buying is effectively a solved problem, the circuits will be de-facto nationalised across Europe very soon if they're not already, as an inevitable outcome of going cashless (which COVID19 accelerated). What will likely never be nationalised is credit, that's where VISA/MSC/AMEX/MBNA will hang around for the foreseeable - unless some of the "new banks" like Revolut and Starling explode on a level where they can afford to start their own thing.
In Germany, we have our own debit card scheme called 'girocard' owned jointly by a group of German banks that has very low fees.
Unfortunately, this card does not work for online payments, which has lead to PayPal being extremely popular. Other solutions, some national, some international exist as well, but have comparatively high fees.
Amazon Germany allows users to pay via SEPA direct debit from any European bank account. That incurs virtually no fees (iirc it's a flat 8c for a successful transaction), but comes with other problems regarding authorization. Only the biggest merchants tend to offer this option.
The European Payment Initiative (EPI) [0] is an ongoing effort towards online payments that work without trusting one particular private institution.
Oh don't get me started with the EC card shenanigans - I've had so many problems in Munich with shops demanding an EC card as the only form of card accepted.
Drives me crazy that in some cases it's either that (which is unavailable to non German residents) or cash....
There's a reason for those so called "shenanigans".
The merchant fees for EC card are the lowest amongst all cards. Pretty much all banks issue EC cards. Earlier, merchant fees could not be passed along to the consumer. Earlier this year, a change in regulation meant these fees would now be passed on to the consumer [0].
I foresee a future where there will be two prices (1) Payment w/o credit card and (2) Payment with EC card. I don't see why EC card owners should bear the costs of people who want to use credit card as a convenience.
I would completely understand if other types of debit card were accepted - but at least in the vast majority of my arguments with local shop owners, Visa Debit or Mastercard Debit are not accepted - cards which are otherwise accepted globally.
I understand if the the fees accepted need to be added on and covered by the consumer who wants to pay with the most convenient form of payment they have - but again in Germany that's not even a possibility. I find it quite strange that it's one of the only places (if not the only place) in Western Europe where you struggle to pay with either cash or a card type that is only available in the country.
I foresee a future in which the "EC card" (please let's call it Girocard, because that's it's name) ceases to exist in a few years.
Banks are already in the process of issuing Visa or MasterCard debit cards to customers as top-of-wallet product, and issuing girocards only on request, sometimes also with additional fees. Visa/MC debit cards have much easier integration with Apple and Google Pay. And they can be used online, and are easier to be used internationally, as they are accepted in most places where Visa/MC credit cards are accepted, too.
The recent deprecation of the Maestro card scheme by MasterCard, which has been co-badged on virtually every Girocard for many years and which allowed the cards to be used during international trips in most countries, has only resulted in aforementioned moves of banks away from the Girocard to be accelerated.
If the EPI does not quickly come up with a card scheme that is a) very very cheap for merchants and b) rolled out quickly in all of Europe, the debit card market in Germany will fall into the hands of Visa and MasterCard. That's just how it is, unfortunately.
The bad joke behind all of this is that this entire outcome has essentially been kick-started by the European Union moving to cap interchange fees on Visa/MC debit and credit transactions - a move against Visa and MC, but one that backfired and opened the doors for national card schemes to essentially be eaten alive by those very two actors. That's because that move made these transactions cheap enough for many big merchants to start accepting these cards in the first place. Before the cap, those rates were outrageously expensive, and virtually nobody outside of the travel business accepted them.
Ironically, an EC card these days is just a MasterCard. They used to be called EC (EuroCheque) card, but rebranded in 2007 when MasterCard was ousted from the system. MC kept the brand rights and didn't do anything with them for a decade. Meanwhile people kept using the old name. Now, however, MC started using the brand for some debit MasterCards, which can lead to great confusion by unsuspecting merchants.
That said, for many shops it was either girocard and cash or just cash only. Merchants just weren't willing to eat the fees associated with other card schemes.
Things have changed, though. The EU has capped the interchange fees of four party debit and credit cards to 0.2% and 0.3% respectively and now most shops tend to accept MasterCard and Visa as well.
It's not just a MasterCard. There are still shops that will accept Maestro and not MasterCard. Further, some girocards, like mine, a V-Pay cards, Visa's equivalent, and not co-branded with Maestro.
Maestro is disjoint from MasterCard, this is correct. But it's also unrelated to what I said. You're right that many girocards are co-branded with Maestro and not MasterCards. However, they are not "EC cards".
Those cards that actually use the "ec" brand (rather than girocard) are proper debit MasterCards. You can see this on MasterCards German website [0]. Some banks are also using that branding to issue cards [1].
Beyond that, there are some girocards which are co-branded not with Maestro, but with MasterCard proper [2], although that is also unrelated to my previous statement.
I see a really good example in India's UPI. You can make payments upto $600 USD using that, it directly deducts from your bank account and you can do P2P too.
There are also startups such as Swiipe [1] that replace debit card payments by direct app-initiated account-to-account transfer.
This is enabled by the payment service provider APIs as per the EU Payment Services Directive (PSD 2) and the EU Single Euro Payments Area (SEPA) infrastructure that make these payments free and "instant".
Brazil has a pretty successful system in place. The only reason I still use credit cards anymore are aggressive cashback policies. For everything I can do with PIX I'm more than likely to choose it nowadays.
Well that's annoying. Visa credit cards are very common in the UK, I myself use one for everything online. I don't know anyone who's got an American Express card in the UK
Edit: Could it also be that Amazon offer their own Mastercard credit card and they're trying to nudge people towards that?
Lots of business meetings in London -> merchants need to accept Amex company cards -> people realize acceptance is high -> people look into Amex for their personal usage, for instance to enjoy higher rewards.
I had my wallet nicked in Padstow on the last day of a trip there and was just about take the 3.5 hour drive home. Problem was I didn't have enough fuel to make it. My CC providers took ages to even answer the phone and cancel the cards. Amex dealt with it a just a few mins, arranged to courier a replacement card to me by the next day and authorised a fuelling stop for me on my way home. I'll never be without one, ever.
I went to an agreed petrol station, they'd authorised spend there. From memory, I think I just told them my name and that was all I needed to do: fill up, thank the staff, drive off.
I had a similar experience in Washington. Amex had an international courier deliver a new card within days. In the UK, the three companies that won't lose my custom (unless things go very downhill) are Amex, NFU Mutual and firstdirect. In my dealings with each, their staff come across as competent and efficient, with a get-stuff-done attitude and evidently empowered to make their own decisions.
Really? Sure it doesn't have to do with the bank backing it? My Amex card has the second lowest limit of all my credit cards at a measly $6,500 whereas I have other cards with $30,000, $25,000, and $20,000 limits. Only one lower is my target card but they are known for having low limits.
I have a UK perspective. Here, to get a VISA-backed bank to grant you more than 6-8k is a real struggle, whereas Amex will happily start at 10-12k and grow from there.
If you compare the rental flats with other top European cities, it’s really not overpriced.
Look at a 6k eur pcm flat in Barcelona and London, in Barcelona you will find slightly bigger flats with terrible build quality and services. In London you’ll get top quality fit and finish with excellent services.
Good luck finding a building with a decent concierge team in most European capitals. It’s almost unheard of.
Luxury product for rich people? Yeah, of course. Overpriced? Definitely not, there simply aren’t any viable alternatives to settle in.
London has a much higher [wealthy] international populous than the rest of the country. Amex business model is all about having a card that is accepted globally, and comes with lots of nice perks for the [wealthy] traveller.
People with higher incomes can afford Amex's Platinum card, which includes good travel insurance, good customer service, access to a good hotel booking program, airport lounge access, boosted status with a few airlines, etc. Most places in the UK that cater to this segment also accept Amex.
However, it's a charge card and not a credit card, so it does need to be paid off in full every month.
Barclaycard was the most popular credit card in the UK at one point and they have ten million customers. As far as I know, they only offer visa credit cards.
I never knew Visa even has credit cards, only knew about MC and I know plenty of people who use Amex for everyday shopping. It's my default for pretty much ALL online payments, even grocery deliveries.
Those have existed in Germany for a long time. I got one, but canceled it after using up the 50€ they gave me because the banking interface of their partner was atrocious.
The HN headline doesn't fit the article. UK issued Visa cards != Amazon UK, and it says Amazon.com, not Amazon UK.
For example Revolut is available in a lot of countries, they're UK-based, and I'm guessing the cards are UK-issued since a lot of merchants think it's a GBP card (and they conveniently ask if they should do the currency conversion (and conveniently don't tell you their conversion rate is much higher and profits them)).
Some customers received a notification from Amazon this week after making purchases, which said that "starting 19 January 2022, we will no longer accept Visa credit cards issued in the UK" due to the high fees charged by Visa to process the transactions
Visa would lose face if they charged the end user with transaction fees, so the merchant pays it instead. Then the merchant delegates the transaction fee to the user, but thankfully nobody knows about that.
I think you left out a few steps who's getting their fat cut (issuer of the card, aquirer, merchang provider etc) but not sure how it exactly goes down.
I suppose consumer to merchant payments are optimized and men in the middle can't get much, everything goes to Visa. Card to card transactions are less optimized and issuer might get a cut.
Has this been confirmed by Amazon? I received this notice and another one last week about my payment method expiring for one Amazon service but not any of the others on the same card. I couldn’t confirm that one either and it had the distinct whiff of phish about it.
I've recieved an email from Amazon.co.uk about it as well. Although I can only go by the subject "Visa credit cards will not be accepted, starting 19 Jan, 2022". My email preferences on Amazon are set to text only, and the text only email has no useful content beyond my name and generic headers / footers.
09:15 GMT. Unlike what the report says, I haven't ordered anything from Amazon in the past week or so I don't think it's directly tied to a super recent purchase (although I probably used a Visa Credit card for whatever it was).
Yep, I had a direct email from Amazon this morning advising me that I could no longer use my Visa Credit card for orders.
"Starting 19 January, 2022, we will unfortunately no longer accept Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit card transactions. You can still use debit cards (including Visa debit cards) and non-Visa credit cards like Mastercard, Amex, and Eurocard to make purchases. Please update your default payment method now, or add one of these new, eligible payment methods if you do not have one."
Well that's annoying. My bank (Natwest) just recently sent me a letter to boast we're getting shiny new VISA credit cards to replace our existing Mastercards. (which aren't near expiry)
But additionally I use the +servicename trick on Amazon, and the email was delivered to me at jack+amazon@myemail. If it’s phishing it’s incredibly well done as it came from the source to the recipients used by the source
This says that only Visa credit cards will be blocked, not Visa debit cards.
I have a speculative guess that it might not just be about the merchant cost... It does seem that Visa offers more customer protection than Mastercard from what I can tell, so perhaps too many customers have got Visa involved for refunds because of the many dubious Amazon marketplace sellers listing fake or substandard products.
If I had to guess this is fall out from the rate increase Visa put in place after Brexit. Now that they are no longer restricted by pro-consumer caps they hiked the rates from 0.3% to 1.5% on credit card payments: https://www.ft.com/content/4820b619-4d35-4c6a-8523-fc685c047...
That's only for cross-border transactions between the EU and UK, and as the article says Mastercard is doing the same thing as well. I know there was a lot of speculation on social media that this was to blame but there's a lot of social media misinformation whenever someone finds a way to blame anything on Brexit... (Also, in practice people were getting ripped off by banks on the exchange rates for those cross-border transactiopns anyway. A lot of these EU measures require being part of the Euro to get the full benefit, and the UK isn't because we'd likely have gone the way of Italy and Greece if we joined.)
2% sounds high, something under 1% sounds reasonable for unified network providing reasonably secure payment flow. Dealing with lot of cash isn't really free either. It gets quite complicated and less secure if sums were really to increase.
2-3% sounds reasonable to bootstrap taking into account risk, but the question is why hasn't it gotten lower (and processors seem to want it to go higher) as technology has improved? Probably not enough competition and incentive to make improvements and pass on savings.
online payment transaction costs are huge, and completely unnecessary, and they will keep eating up on the value of the economy because they're a monopoly.
at least all b2b transactions should move out of card payments, and hopefully with crepto or modern digital banks the b2c will follow, but right now too many banks are holding people's money and too many of them are consolidated / act as a cartel.
I think this is not the case. Actually, it's more like they give you some restricted benefits matching something near the fees incurred. And only if you redeem them.
It is also virtually cross subsidy from people paying cash/bank transfer to people paying by credit cards.
The full 2% isn’t squeezed out but a big portion is. When I can sign up for a credit card, charge $5000 then get $800 back, it’s pretty clear the credit card company is using much of that 2% for customer acquisition.
And as per my other comment, the customer isn’t necessarily paying the full 2%. If credit card companies became charities and charged 0% would all prices drop by 2%? Of course not.
I really don't get why we accept this de-facto tax on the world economy by US companies. Amex, Visa and Mastercard are all based in the US, and all charge a (nowadays) non-negotiable fee on selling anything. Cash has many problems, and clearly won't work for online purchases, but at least small business owners could pay their employees "out of the till" at the end of the week, bypassing bank transaction fees and a fairly substantial (~1%) barely-negotiable and highly regressive charge on their income.
If anything, that's an argument in favour of the whole thing being government controlled -- it's clearly a natural monopoly with a large capital expenditure requirement and a comparatively minimal (as a percentage of transactions) ongoing charge required to continue to run it. I mean, it clearly doesn't cost Visa / MC any more to make a £/$/€45 000 payment than a £/$/€5 one – database writes are not cheaper or more expensive if the fixed point value you change is smaller or larger (subject to fitting within the range requirements, etc)...
Brazil has gone that route with PIX [0]. It's a fund transfer system with realtime confirmation. Many e-commerce stores accept it besides debit/credit, they can confirm the payment almost instantaneously and they usually give discounts if you use PIX instead of debit/credit (3-10%).
Also, paying at stores, clinics, doctors, etc.. all done with PIX nowadays. Very few people are carrying cash these days. Very few clinics had a payment machine to accept debit/credit cards and now with PIX they have no incentive to do so anymore.
To transfer funds, you can specify the user's ID (which can be a phone number, national tax identification or some random string the user creates). To pay for purchases, you usually scan a QR code or copy a payment string using your bank's app/website. It's very convenient.
> If anything, that's an argument in favour of the whole thing being government controlled
Absolutely, and I kinda expect this to become the case eventually across Europe, as the "cashless society" vision becomes inevitable. If you make it de-facto compulsory for citizens to operate electronically, it's only fair that there should be the sort of guarantees and accountability that only the State can provide, even if you lose a bit of innovation or efficiency.
Unless a business is extremely small, extremely low margin or doesn’t want an electronic record of the transaction most businesses prefer not to deal with cash.
So you are back to a payments network. Those are very hard to bootstrap and are not free to run.
> "Pablo was earning so much that each year we would write off 10% of the money because the rats would eat it in storage or it would be damaged by water or lost," Escobar wrote.
Which doesn’t apply in the UK post Brexit, hence this situation. The UK could cram down interchange fees (such that the EU had) with their own regulation if they don’t want merchants banning rent seeking payment networks.
The whole point of brexit was to get rid of the sort of fair, efficient, reasonable legislation the EU pushes. Brits want to be fucked over by big US mega corps and are tired of the EU refusing them that right. As a Brit I wish it wasn't true but here we are.
Yeah sure, but that‘s all added on by other parties. As far as I know, the layers above VISA/MC are diverse enough (not a duopoly). If that‘s true you could rely on the market to drive down fees if it‘s profitable.
It's a problem of regulation. E.g. in my home country, the Netherlands, practically everyone uses a Maestro or V Pay card issued by Mastercard or Visa, but card fees are very reasonable: € 0.0082 + 0,010% (for domestic transactions). The bank charges a much higher fee, but total fees still come out to less € 0.05. That's much cheaper than handling cash is.
Cash is not free to handle. Considering the whole “cash lifecycle”: shrinkage, cost of secure transport to the bank, &c., costs can be up to 8% for some industry sectors.
Because regulations which goverments supports because they prefer digital transactions to physical money for several reasons. (EU country perspective)
By VISA/ MasterCard contract backed by governments' regulations a merchant in EU can not charge more because he's using a card instead of cash. Of course the transactions costs are paid by the customer, it's just all customers instead of those paying by card.
That's why some cards have charges, to the merchants, of around 2%... because the customer who use that cards does not pay them.
If I, as a customer, when doing an Amazon checkout saw a 2% charge to use VISA I would drop them in a second. Because that's hidden on purpose, I keep using it.
To clarify, it seems that transactions costs vary a lot in the EU. I have the prices in Portugal for 2 terminal payments provider and I see lot of comissions around 2% which is strange because the EU states that the comissions are much lower.
Australia has had instant, free interbank transfers for years now (PayID) but for some reason I have yet to see a business accept it at PoS and only very rarely for online purchases. The only business that seem to accept it are crypto and stock exchanges, to get your money in fast...
VAT evasion is widespread in certain countries (like Italy for instance), and pushing people to prefer electronic payments to cash is empirically the only realistic way to counter it, but there will always be resistance from small retailers until payment fees are low enough. The availability of electronic payments should be universal, I personally hate being forced to constantly carry cash on myself at all times.
In a cashless society, there's no point in mugging and robbing, because people don't have untraceable items of value on the at all times.
> VAT evasion is widespread in certain countries (like Italy for instance), and pushing people to prefer electronic payments to cash is empirically the only realistic way to counter it
The only realist way to counter it is to stop charging VAT.
> In a cashless society, there's no point in mugging and robbing, because people don't have untraceable items of value on the at all times.
Because all the valuable items are digital and hackers can steal your money without meeting you in person.
On the other hand, shifting to electronic payments is building up an incredible surveillance mechanism.
Let's just take an example of who is endangered... a 16 year old girl from a strictly religious family who had unprotected sex and needs Plan B. In a cash environment, she'll pay for it with her allowance, and her parents won't ever discover she had bought Plan B. In a cashless society, her parents can see the evidence by checking her bank account.
Also, un(der)documented / "illegalized" people literally won't have a way to survive, as their access to bank accounts may be revoked or the government demand a live feed of all transactions, which means that e.g. the police can be dispatched to a supermarket where that person just bought food.
IT (and politics) definitely needs ethics education, as all the tech bros and other hypers of "going cashless" never take into account who will be negatively affected by their ideas!
> In a cash environment, she'll pay for it with her allowance, and her parents won't ever discover she had bought Plan B. In a cashless society, her parents can see the evidence by checking her bank account.
Playing devil's advocate: that's only if the payment and the product are linked. When I buy something at a pharmacy with a credit or debit card, all that appears on the card together with the value is the name of the pharmacy. Looking at the bank account does not reveal whether the item I bought was toothpaste or chocolate (yes pharmacies also sell chocolate here).
Sure, but it exposes the person to a risk nevertheless, especially if they did not think of a suitable excuse that rhymes up with parents going on a deep dive (which many abusive parents or spouses do... just read r/2X, JustNoX, AITA and the likes).
A lack of cash allowance can easily be explained by buying some soda or fast food, but a paper trail is harder to consistently explain away.
Lost VAT revenue is not due to mom-and-pop shops offering a discount under the table. The vast majority of lost VAT revenue is due to organized VAT carousel frauds, also knows as missing trader fraud, where an organized groups of 10-20 people siphons tens of millions into their pockets through reimbursements of fictitious trades. It's one of the most lucrative fraud schemes there is, but if caught and convicted, the sentences are usually comparable to that of murderers. If not caught, the accomplices frequently try to assassinate each other in a sort of a sick tournament-style elimination
I don't understand how this works. If I see correctly, one entity in the chain simply does not pay the VAT it collected. Why is it important that it's cross border? I could issue an invoice to my neighbour's company myself and simply not report it. You can always do that and hope you don't get an audit.
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
Nothing about this is customer obsession. This is Amazon throwing their weight around and putting customers in the firing line.
Rather interestingly my bank (First Direct) in the UK swapped over from a Visa Debit card to a Mastercard recently - I wonder if perhaps there are things going on behind the scenes that consumers are not currently aware of.
Rather annoyingly most of my spending with Amazon is on my Visa credit card - can't quite figure out why they are now more expensive to process than the historically expensive AMEX.
Sooo.... if I have an Amazon account that is also an AWS account.
I can pay with Visa on AWS, but not Amazon?
And if I close the Amazon account, it will close the AWS account?
I only really use AWS for S3, and if Cloudflare get R2 into my hands soon it does appear that Amazon will have finally done that which de-Amazons me... made it impossible to pay them. If the choice is "Change bank" or "Change shop"... one of these has far lower friction.
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[ 3.4 ms ] story [ 518 ms ] threadI don't think this is the end of it either, it smells like a negotiation threat. Visa have a larger market share overall (80%, including debit cards [1]) but Mastercard leads in credit cards. Amex has always been fairly niche because it's not accepted everywhere.
[1] https://www.statista.com/statistics/1116580/payment-card-sch...
> Visa was the largest card issuer in Ireland and the United Kingdom, with market shares of over 80 percent in both countries. (from 2019)
Reading further it does look like most Visa cards are debit cards and Mastercard has the lead in credit cards.
PS: Comment updated after some research.
Re: Mastercard
It seems that Mastercard is more widespread among "hot" banking startups, ie I can create virtual debit Mastercards on Revolut and Monzo
They were definitely first in this space but Revolut has issued Visa's (in some cases) for a while now, and for instance Wise has recently switched from MasterCard to Visa entirely.
All the major banks apart from Barclays and HSBC use Mastercard for credit
(MC taking less of a cut of the final fees then Visa, so the banks getting a higher precentage of the fees then they would have sticking with Visa. Lets say MC gave away 5% of their cut to the banks, keeping 95% of the your slice of the pie when you are processing more pies is more than 100% of your slice of fewer pies if you get what I mean).
99% of debit cards are Visa, and most people buying stuff on Amazon would be using a debit card, folks only really use credit cards for large purchases and things like travel, here.
Even when it comes to credit cards, I would say Mastercard has like a large chunk - like 80% in terms of institutions (but who knows in terms of actual customers), I would say.
Barclays and HSBC are the only majors that do Visa as far as I know. And Vanquis which is a junky one for people with bad credit.
The other majors like Lloyds, TSB, Bank Of Scotland, Halifax, Natwest, RBS, are all Mastercard. Same with most smaller banks like Virgin and CapitalOne, and store branded ones like Sainsburys/M&S/Tesco, too, as well as the remainder of the popular bad-credit cards like Ocean, and Aqua. Mastercard.
Most people in the uk chase points and credit cards have much better points and bonus' than debits.
Huh? I'm in the UK, have been an Amazon customer for over 20 years and have always used a credit card for everything. I didn't even know you could use a debit card, and can't see any reason you'd want to. Paid off in full every month, better consumer protection, what's not to like?
Well, the predatory business model, for one. The reason your credit card company can offer you "better consumer protection" and other benefits is because they count on a percentage of people not paying off their debt in time (and thus making more money out of them).
Also, I personally wouldn't want "better consumer protection" to be mediated by a private company. That should just be the default.
(Although the time my debit card did get stolen somehow, my bank did refund out of goodwill presmably becuase they didn't want to lose a customer).
https://www.which.co.uk/consumer-rights/regulation/section-7...
In bits of Europe where it's allowed (like here in Denmark), it's not unusual for shops to add a percentage to the total for payments by local credit card, business credit card and/or foreign credit card. I haven't yet seen a shop with a different price for cash vs debit cards.
The appeal of credit cards is higher volume - more purchases because people can put it on credit, it’s more convenient, etc. That’s why you’ll see even roadside fruit stands offer credit card payments.
Plus stores are in competition with each other (to varying degrees). Some will choose to absorb the entire 2% or a part of it since, in their mind, it’s a net positive trade off.
It’s like saying a 5% increase in property taxes are just passed through as a rent increase. It all depends on the market. The right answer is something between 0-100% is passed through.
You’re confused - in the UK the better consumer protection with a credit card is the law. On debit cards it’s at their discretion.
Nothing to pay off, you're spending your own money, can't be overcharged, can't go below zero, if someone leaks your spending card they can't touch the majority of your money, no scummy business practices.
Never owned a credit card, don't have the slightest wish to do so.
What do you mean debit card for receiving money? In what sense?
>> Automated payment from the 1st one to the 2nd one
Again, I have absolutely no idea what you mean by that. Payment from a debit card to a debit card? What?
Seems like a lot of work to do what CCs do automatically. I guess the upside is that crazy spending is impossible (well, if you make sure to forbid negative balances on the spending account) and it's impossible to accrue interest.
I'm unaware of a UK bank that will let you do this, so...
e.g. a train ticket purchase from a guard using a mobile terminal
they were very easy to spot as they didn't have the raised digits (for the imprinting machine... old fashioned offline transaction)
now they're coming back again, but still not super common
Monzo's own help pages explicitly state that your balance can go into the negative, because offline debit card payments will not be rejected. They'll also gladly take you into the negative if you owe them money (e.g. through a Monzo Plus or Premium sub, or use their Flex service).
Search Monzo help for "Unarranged Overdrafts".
As far as I'm aware, there is no UK bank that will guarantee they will reject all payments and never let you go into a negative balance on a debit card transaction. This is also a profit centre for them, so there's little motivation to actually do so.
https://monzo.com/help/overdrafts-loans/unauthorised-overdra...
Keep your primary account for getting paid, and for covering bills, then load up the second account with play money for the month.
I know a few people who do this.
I just use an AmEx account but it's a little frustrating that you can't set a spending limit on the card.
I have the majority of my net worth invested at one of my brokers and I tend to hold minimal cash in my bank account...better to be invested than hold cash these days.
You now have perks, points, insurance, consumer protection and still zero worries.
https://www.americanexpress.com/uk/credit-cards/all-cards/?i...
> I see no real reason why to use Amex over Visa or Master/Maestro
Cashback/rewards, and it's accepted on Amazon in the UK after this year is a really good reason to use it over Visa at least. Maestro is non-existant in the UK. Maybe mastercard is a better choice, but I carry two cards _anyway_ , so one might as well be an Amex, and the second should be a mastercard?
> Majority of hotels around Europe don't accept it, same with restaurants, small business, shops
I completely disagree. Almost every restaurant, hotel, cafe takes it. All major airlines accept them, the major train operators accept them, the major hotel booking sites and airbnb both accept it.
> there is not a single reason to own one in Europe, even with cashback (cashback to what actually, since i cannot use it anywhere)
Well there is, cashback, and contrary to what you're saying it _is_ usable in europe. You can book a flight with Ryanair, a train on trainline, hire a car via hertz/sixt/europcar, book a stay with airbnb/booking/hotels, and eat out in restaurants and local cafes all with an amex.
Everyone is paying for the perks, since prices are the same for everyone, but only the people with a credit card are getting them.
You're paying for their perks every time you buy with a debit card - it's madness to use debit.
That said, I do get annual cashback of 1% on one of my cards.
I've have some credit card debt, none of it carries any interest. When I buy appliances or furniture I usually take the interest free financing despite having the ability to pay. Why pay a few grand today when you can spread that out interest free for 2 years and let that value appreciate? I would have lost out on tons of money if I had sold investments up front to buy those goods. So instead of getting rid of all that money a year ago, I got 30% gains in the market.
Bizarrely, never owning a credit card will negatively impact your credit rating.
I have to spend everything on a credit card, then when i get home from shopping 45 minutes later go and pay it off using a debt card.
Its so unfriendly for the consumer.
Keeping an eye on my spending and borrowing on a daily basis is now a negative?
I assume you sit in the same camp that thinks i can afford £1400 monthly rent for 5 years but not an £800 mortgage yeah?
You are aware that interest rates have been incredibly low for years? They have to go up to keep a lid on inflation, and the BoE needs to be able to do that without worrying about mortgage borrowers being overstretched.
I had this issue, and had to get a credit card and buy stuff on it for a year... basically without using credit you may not have a credit rating.
I always lose my cards and have to get them replaced, so have been back on just a debit card for a few years now.
I had to get a credit card as mortgage got denied because my credit record didn't exist. Three months after the card, I got approved.
This is despite me earning an extravagant wage relative to my age for over a decade and never missing rent/utilities/council tax.
Bad system.
It isn't that a lack of credit card hurts your credit rating, but that a lack of any credit hurts your credit rating in Canada or the US.
There are other ways to get an initial credit rating than a credit card, although I agree that this is the path most easy, and chosen by many to get that first rating.
The method I employed, was to buy a car and had a parent cosign. I made all the payments, and this was enough to kick start, and give me at good credit rating.
I also didn't say 'you need a credit card to get a good credit score', I said not having one will negatively impact your score. This is 100% correct; Your credit score is made up of various metrics on how you manage debt, one of which is credit cards. You will get a % boost if you have a card that you manage well, whereas without a credit card, you will get no boost at all in that category. Granted, you may make up for it overall in other categories, but in the main, for most people, my statement still stands. Credit scores start at 0, and only improve if you show you can manage debt across multiple products.
Credit bureaus are definitely legislatively controlled here, and court decisions have an effect on them too.
That aside, I didn't say low utilisation, I said no utilisation. This has a good chance of your card being cancelled by the card issuer, which has a negative effect on your credit.
Bottom line is, unless you plan to use the card, there are better methods of increasing your credit score, so it's not a good idea to get one.
Only since then have I actually had anything on my credit report (monthly broadband payment, phone contract, monthly car insurance payment because I didn't want to keep paying the whole 3k up front every year after moving out, etc) and despite that the score has remained unchanged.
In our case, the bank required a savings account containing a 10% deposit in the name of a family member, which is returned to them with interest after 3 years (unless you fall into arrears). ~50% of that money was our own savings and the rest was from parents savings, which allowed us to get on the property ladder with ~1yr less saving and no cost to our families after the 3yr period.
When somebody does a credit check on you they don’t get a score, only a remark on whether that person has done any negative with respect to their credit worthiness. Thus there is really only the negatives which count.
Credit reference agencies instead report credit history.
The difference is a subtle but very important one, as it allows companies to assess your individual circumstances, rather than base decisions on an arbitrary score.
The above misunderstanding is so commonplace that the Redit UKPersoanlFinace sub had (has?) a bot explaining this on every UK post mentioning 'credit score'. Here "credit scores" are instead a marketing gimmick launched by credit reference agencies to get consumers to subscribe to monitoring services. The 'score' they give is meaningless.
https://blog.moneysavingexpert.com/2021/06/martin-lewis-cred...
By the same logic credit scores don’t exist in the US either. It’s just an approximation, your bank still makes their own decisions.
https://www.which.co.uk/money/mortgages-and-property/mortgag...
Neither are truly unsecured. It just takes longer than an outright repossession because it takes two or three court claims instead of just one.
The debt collection industry relies on this, and regularly forces sales of property to pay back CC and other debts.
So CCs are disastrous for people who can't pay their debts. Not only are the interest rates extortionate, but for lenders they're almost as safe as a secured loan. And because of the high rates they can be considerably more profitable.
But it's true that in the era of negative interest rates, only silly people don't owe money.
Not going into debt unnecessarily is a great thing, but it's not a data point in your favour, it's the absence of a data point.
If you got approved for $40k, there's something else funny going on.
I own a credit card, as you get additional consumer protections using a credit card rather than a debit card in the UK.
Pay it off in full every month. No problem.
Some banks offer similar things on debit cards, but it's always at the banks discretion rather than required by law.
Never paid a penny in fees or interest in over 15 years.... and an annual statement of fees (issued by law) informs me of this fact each year.
Indeed if say an IT problem occurs and they can't do that transfer under UK law they eat the fees incurred. "The customer must be made whole".
As to fees, the merchant doesn't have to accept cards, as we see with Amazon, if they don't like the fees. Why should ordinary consumers care? When we were part of the EU the cards couldn't charge excessive fees, now Brexit allowed them to unlock this potential source of profit.
...and can't get a mortgage and buy a house because you have no credit score.
It is possible some people could have so little credit history that having a card for a while might be beneficial. I don't know enough about the system to be sure, so maybe I was being a bit flippant, for which I apologise.
If you have proof of income you're going 90% of the distance.
No idea where the card is now, but the credit systems seemed to become aware of me after that.
I can’t even begin to imagine how you could see this as an advantage. It’s really not.
I write 'real' since most of the FinTechs like Revolut, N26 etc often issue debit cards that may fail in exactly that situation. It doesn't help if your account is flush with 10k USD and a car rental could easily block 2k for claims on your debit card, some will just not accept Revolut & co. Thus I am always forced to carry an emergency backup credit card from a major bank just to be on the safe side...
Very much looking forward to the day some other means of international payment (crypto?) will be generally accepted.
Banks and debit providers also do ID checks, as required by law, but don't check anywhere near as hard, since there is no way to steal money from the bank if your account can't go negative.
In the UK, it's really hard to get a bank account where they'll do that. Instead they'll pay it, call it an "unauthorised overdraft" and then charge you for that. This is their business model - it's how they make sufficient income to operate.
There are "basic bank accounts" which don't provide a credit facility, but these only exist because people with poor credit histories can't get bank accounts otherwise, and the regulator has threatened to enforce their availability otherwise. However since this means that there currently isn't any rule, the banks make it very difficult for an ordinary person (with good credit) to open a "basic bank account".
More information here: https://researchbriefings.files.parliament.uk/documents/SN03...
And a Supreme Court decision here: https://www.supremecourt.uk/cases/docs/uksc-2009-0070-judgme...
I'm pretty sure all of them do, just ring up your bank and ask them to set your overdraft limit to 0
I've certainly done this with HSBC & Santander in the past, and when I got my Monzo account it was 0 by default (You had to sign up for an overdraft if you wanted one).
Monzo might be an exception here.
In the US, 2%+ on all purchases (either directly or through points) is pretty standard. Going up to 5%+.
But I know this can be very different in other countries. I believe Japan has little to no incentives?
This is just as anecdotal as GP or indeed myself. I never use a debit card and don't know anybody that uses them other than for getting cash out of an ATM
For info: the debit & credit cards from my bank look almost identical. The only difference is one says "credit" in small black text. My credit card handles exactly like my debit card in terms of tap-and-pay etc. I just wouldn't use it to take out cash from an ATM, but then I can't remember when I last needed to do that.
You can be dinged both for having credit and not using it in a given month, as well as exceeding a certain threshold (~10%?) of your credit limit.
So yeah, I don't think I care too much about my credit rating at all, it doesn't seem to be affected by this in the sligtest.
Also worth noting Credit Karma uses TransUnion which is only one of the big three rating agencies, and arguably the least important compared to Equifax and Experian.
What is this unicorn you speak of...? :) jk, I know some exist, I've just been irrationally faithful to a bank that probably does not deserve it anymore (coop)...
(But I keep my savings in an account that offsets against my mortgage, so I'm effectively getting a similar deal in practice by not accruing interest on that.)
The only exception where I'd prefer a debit card is in very rare cases when there's an additional fee for using a credit card. That's usually for large sums and/or international payments though, in which case I tend to use a specialised FX company or Revolut. My normal debit card is literally the last card I ever use, when all else fails or is more expensive.
But why? The credit card is strictly better isn't it? I thought the main reason people used debit cards was that they got one automatically with their checking account and just never bothered to apply for a CC, but that's not the issue for you.
And yes, it can be easily worked out but I guess I just can't be arsed. And for purchases under £100, credit cards offer no additional protection whatsoever, so for my daily shopping I'd just be making my life more difficult for no reason.
They offer better protection against fraudulent charges though? If your card gets skimmed it doesn't matter whether you were paying £5 or £5000.
What exactly can a credit card do better than this?
the key difference is with the debit card it's your money that's been stolen, whereas with a credit card it's the bank's money
This means for example if you buy a flight and the airline goes out of business, your credit card provider will need to refund you. Also if goods are faulty, you now have two possibilities to get your money back - and the credit card companies are usually more amenable.
1. (As everyone says) consumer protection. I can dispute a charge to a CC and am not standing out the cash (unlike debit)
2. Debit transactions don't have any inherent limit. The bank might flag a very large transaction but once a debit transaction is underway it can't be stopped. I had > £10k stolen from my online account via a debit transaction and though the bank made good, still, bad taste.
3. Most important if you are young - using (and paying off) credit card will improve your credit score which helps you when you do need the credit.
4. Delayed payment. Even when you clear your debt every month you're still getting the benefit of 30 days free credit on your purchases. In our current savings-rate environment this is somewhat moot but anyone who travels for work or has significant work expenses that they have to wait to get reimbursed for will find this a major feature. Lending your employer money really sucks.
5. Rewards cards. These have gone crappy over the last decade but if you are in a role where you have significant work expenses or where you put most of your expenditure through the CC it can be worthwhile to hunt around for and switch cards for deals. Spending £1000 at Amazon/year on a debit card will get you exactly £0 in rewards. Even 1% cashback would be worth having.
The only downside to CC's I see is that some people can't trust themselves with credit - they'll spend up to their limit and get into a spiral of debt. If you don't do that, they're better than debit cards in my opinion.
1) I've been able to dispute payments on my debit cards without any issue, they were always reversed instantly by the bank. Maybe I've been lucky, I don't know. And for the "bank is liable for your purchases" thing - that doesn't apply to anything under £100 either.
2) That is a stupid limitation of UK banks, not debit cards in general. I have a bank account in Poland and for the debit cards with that bank I can set individual limits for internet transactions, terminal payments, CNP(card not present) transactions as well as ATM withdrawals - with separate daily/monthly/temporary limits. Why British banks don't implement this is unfathomable to me.
3) I suppose, I have no comment on this really.
4) yes, but then you need to remember to pay it off and how much exactly, which is a bit of a pain if you have your daily spending mixed in with bigger purchases that you want to pay off over a longer period of time.
5) Again, personal experience - other than 0% interest on purchases, never had a credit card in the UK with any rewards whatsoever.
And yeah, it's not about downsides of CCs - it's just that when I pay for my daily shopping with my debit card it's out of my account, I know how much I have to work with at any given time, done. As I said elsewhere, I can't be arsed to work out it if my spending is spread across multiple accounts and different forms of credit.
I used to fly to New York in first for free once a year on my reward points before COVID.
Is there ever a situation that you can use a credit card but not a debit card? There are occasionally places that only accept debit cards, but I think the only time I've had a debit card refused was when hiring a car.
Hotels will sometimes do the same for a room night plus potential minibar charges.
The pre-auth gets released when you make the payment at the end of the car rental period.
The amount is (temporarily) deducted from my available balance when I use a debit card, just like it is deducted from the credit limit when I use a credit card.
https://www.ukfinance.org.uk/data-and-research/data/cards/ca...
£16.9bn on credit, £61bn on debit.
I suspect credit card spending is much more popular than you are suggesting due to consumer credit act protections and cashback offers.
Come on, Hacker News. You are supposed to be better than this — repeated discussions with the same "but in Europe" "I've do X so Y doesn't happen" comments is why I stopped reading Slashdot.
I've downvoted several anecdotes in this discussion. They contribute nothing to the discussion.
Feels like a lot of places are shunning Visa at the moment.
Other than getting a new card number (which some could say is a GOOD thing) switching from Visa to Mastercard in the UK has hardly any impact as 99% of places accept both.
This is delusional - the British have as many credit cards as people, £56.5 billion on credit cards, and 40% of credit card transactions were contactless, so certainly not large purchases.
Not quite that bad. In 2019 it was 82% visa 17% mc
and since there has been a move towards mastercard. My main bank, FirstDirect switched my debit card over this year. I also use Wise which is also with mastercard.
If they try to shaft both sides, then they'll simply lose market share.
I live in the Netherlands and biggest supermarket chain here, Albert Heijn, is strictly Mastro-only. This is not a problem for the locals, but you will find angry reviews left by tourists on pretty much every ah branch in Amsterdam on Google Maps.
The second-largest chain, Jumbo, will happily accept my AMEX credit card. In many cases, the groceries are even (slightly) cheaper there. That's why it has been my preferred place to do the groceries for years. But I find my self goes to ah much more often than Jumbo recently, simply because I moved and there is one right across the street.
There are a small handful ah branches (see below) in tourist spots that does accept credit cards. In all other places, you should see posters apparently made by the staff that puts red crosses on Visa, MasterCard and AMEX logos near the entrance and/or the checkout kassa.
From https://www.ah.nl/klantenservice/onze-winkels/zelfscannen-en... (in Dutch):
> In sommige winkels kan je met je creditcard of buitenlandse pre-paid debetkaart betalen: de winkels op Schiphol, veel stationswinkels, de winkel achter het paleis op de Dam in Amsterdam en de winkel aan de Weteringschans in Amsterdam. Bij alle andere winkels kan dit niet.
It wasn't a branch that accepted credit cards (it was full of crossed off card logos), the clerk saw my foreign card with Mastercard logo and said that wouldn't work but I insisted by showing it had a Maestro logo on the back. Reluctantly they said OK, go ahead and for everyone's surprise, it worked.
The transaction ended showing up on my credit card statement, and to this day I really don't know what happened. I know that international withdrawals (that should use Maestro network) appear on my checking account. Who knows...
Example in English: https://www.flysas.com/en/help-and-contact/faq/booking/why-d...
And in Danish: https://www.tivoli.dk/da/om/vilkaar-og-betingelser/betalings... (or without the reasoning in English: https://www.tivoligardens.com/en/om/vilkaar-og-betingelser/b... )
https://www.citizensadvice.org.uk/debt-and-money/borrowing-m...
If you force cash and credit card transactions to be the same price then the extra 0.5% is charged to everyone, and outside of extreme cases like this post there is little incentive for credit card operators to lower their fee.
I would be willing to bet the fees Amazon gets are vastly different from the fees a small merchant has to endure.
They obviously tried to squeeze a little bit more and now they’ll leave it to the shareholders to pressure the company to accept whatever Bezos wants.
I worked in credit card payments (on acquiring side).
Any market share advantage between Visa and Mastercard is very, very fragile. It is basically your choice which card to pull out for payment.
It is also why Visa and Mastercard these are so alike almost in every aspect. When one does something, the other copies it.
The only reason this is still split between two companies is exactly because of this parity between products. People have no reason to prefer one over other and simply toss a coin to make their choice.
When I had chance to configure my phone to do NFC payments, my bank supported it only for Mastercard, so I configured Mastercard and that's how it is now. I know a lot of people got Mastercard because here (in Poland) it was tiny bit faster than Visa.
If Amazon bans UK Visa, people will not stop using Amazon. They will either pull out the other card or grumble for couple of days and get Mastercard.
It is likely Visa has NO negotiation power here. They are the ones that have commoditized themselves and are easily replaceable for their competitor. It is likely Amazon is well aware of this and this is just a show of strength that will be followed by Visa submitting to it because they have no choice.
The main motivation for this is to make payment technology transparent to the user (as in use any card anywhere, expect similar behavior, etc.) A lot of this is standardized so much that it is virtually the same for both.
And I know this, because it was my job to implement these standards. I calculated some 17 thousand pages of specifications in various forms.
Both Visa and Mastercard gain a lot form this because it is not a zero-sum game. Because of this cooperation people have been steadily increasing their use of credit card payments and this I think created a lot more revenue than they could have ever created for themselves by winning a cutthroat competition.
Merchants put up with high Amex transaction fees because Amex cardholders tend to be affluent and frequent purchasers.
Especially considering that card transaction fees (in the EU and UK) are capped by the Interchange Fee Regulation (IFR) [1]
But I suppose Amazon processes card payments in such huge volumes that they expect to get rates below the cap limits (0.2% for debit cards and 0.3% for credit cards), or Visa are applying excessive additional fees outside of the interchange fee?
[1] https://www.psr.org.uk/our-work/card-payments/the-ifr/
The email formatting was so shite, I'm pretty sure any savvy reader assumed it was pishing (even though the URL appears legit).
Sometimes they are "empty" like here, or contain placeholders in place of the actual data, or just break random features (e.g. eBay prevented other users from sending me photos).
This should not be a thing.
Perhaps because bank transfer is very developed in the UK, and wire transfers could totally replace credit cards, with lower fees?
On mobile devices, the effort to set up a wire transfer or direct debit is only maybe 1 minute for most users, and that's a one time thing, and unlike credit cards they don't expire either. Fees for the use of the system are effectively nil.
That gives visa a lot of lock in - and the competition is no longer MasterCard but instead openbanking API's.
https://www.nytimes.com/2021/01/17/technology/google-faceboo...
They are probably well placed to determine how many customers use Visa with them versus Mastercard, or even have both and use both on the website. The subset who have only ever used Visa on Amazon may or may not have an alternative card they could use, but they will presumably have factored in the cost of potentially losing the sale entirely as a result of refusing Visa.
With Visa so entrenched in UK finance, it's not going to be received by customers the same way as Amex being refused (let's face it, Amex is refused most places because the only people who use it do so because they are getting cashback which is paid for by the merchant having increased fees). Instead, Visa will be the card they've always used, so if Amazon stop accepting it, I think a lot of customers will just shop elsewhere instead.
If everyone using Visa credit cards stop buying on Amazon starting 19th January, Amazon will probably budge.
But since everyone has a debit card Amazon must be betting that if they do stop accepting Visa credit cards then customers will just shrug and switch card because they really, really need that stuff now.
The free market has many problems. This isn't one.
Or, you know, Visa debit cards? Amazon don't actually let you pay with Faster Payments or direct debit AFAIK? And you can't wire transfer money you don't have, which is the whole point of a credit card in the first place.
No, this is going to be something weird about credit.
If all these consumer-unfriendly practices are banned, you see the real cost of such cards. Same happens for many customers in Germany: pay 10€/month for a bank account with included VISA/MasterCard, pay 30€-60€/year for such a card, or use only a national card.
What are your thoughts on ATM fees? Is there a "real cost" to maintaining ATM fees? Should it be passed to the consumer? Or is it an unfriendly consumer practice that Europe has rightfully "banned" (aka not common)? It seems to me they're just charging you another way by selling your data or whatever!
How much do Europeans pay for Whatsapp, by the way?
Also, can you share the European law that bans merchants paying a percentage for financial transactions to the payment processor? I'm unfamiliar with it, and am also curious to understand how Visa and Mastercard exist at all in Europe given the banning of this consumer-unfriendly practice.
If I had my way, the 1€/year fee would be back ;)
> What are your thoughts on ATM fees?
I hate them, but I can understand why they exist and are still legal to this date (although it is inconvenient having to find an ATM that has a contract with my bank).
> Also, can you share the European law that bans merchants paying a percentage for financial transactions to the payment processor?
It’s limited to 0.2%, which is why the card companies have been asking customers to pay a monthly cost for the cards instead.
https://blik.com/en
https://thepaypers.com/thought-leader-insights/blik-and-the-...
"(...) at the end of 2020 BLIK overtook payment cards in terms of the number of transactions made in global ecommerce (Polish and foreign) for the first time."
You can use it everywhere: from your local convenience store to Uber or Amazon Poland. It's also a Polish Venmo, or rather Zelle, where you can send money p2p using a phone number.
They are now experimenting with contactless payments, as well as trying to integrate with international online payment systems, and if those are a success, the future of Visa/Mastercard in Poland is rather... complicated.
And if Poland continues to be the predicting greenfield it was so far for FinTech, the decentralized, national solutions like these are likely to largely displace the 3rd parties of Visa/Mastercard/Amex alike.
That having said, one of BLIK's board members is the Mastercard CEE country manager, so... looks like they do anticipate that change.
Did not knew about the p2p thing. Thanks.
If it wasn't for the regular 2-5% I get back on my US-issued credit cards, I'd be mostly using BLIK only when in Poland.
[1] https://en.wikipedia.org/wiki/EFTPOS#Australia
I would actually trust such one more than anything bought by government...
Unfortunately, this card does not work for online payments, which has lead to PayPal being extremely popular. Other solutions, some national, some international exist as well, but have comparatively high fees.
Amazon Germany allows users to pay via SEPA direct debit from any European bank account. That incurs virtually no fees (iirc it's a flat 8c for a successful transaction), but comes with other problems regarding authorization. Only the biggest merchants tend to offer this option.
The European Payment Initiative (EPI) [0] is an ongoing effort towards online payments that work without trusting one particular private institution.
Drives me crazy that in some cases it's either that (which is unavailable to non German residents) or cash....
The merchant fees for EC card are the lowest amongst all cards. Pretty much all banks issue EC cards. Earlier, merchant fees could not be passed along to the consumer. Earlier this year, a change in regulation meant these fees would now be passed on to the consumer [0].
I foresee a future where there will be two prices (1) Payment w/o credit card and (2) Payment with EC card. I don't see why EC card owners should bear the costs of people who want to use credit card as a convenience.
[0] https://www.handelsblatt.com/finanzen/banken-versicherungen/...
I understand if the the fees accepted need to be added on and covered by the consumer who wants to pay with the most convenient form of payment they have - but again in Germany that's not even a possibility. I find it quite strange that it's one of the only places (if not the only place) in Western Europe where you struggle to pay with either cash or a card type that is only available in the country.
Banks are already in the process of issuing Visa or MasterCard debit cards to customers as top-of-wallet product, and issuing girocards only on request, sometimes also with additional fees. Visa/MC debit cards have much easier integration with Apple and Google Pay. And they can be used online, and are easier to be used internationally, as they are accepted in most places where Visa/MC credit cards are accepted, too.
The recent deprecation of the Maestro card scheme by MasterCard, which has been co-badged on virtually every Girocard for many years and which allowed the cards to be used during international trips in most countries, has only resulted in aforementioned moves of banks away from the Girocard to be accelerated.
If the EPI does not quickly come up with a card scheme that is a) very very cheap for merchants and b) rolled out quickly in all of Europe, the debit card market in Germany will fall into the hands of Visa and MasterCard. That's just how it is, unfortunately.
The bad joke behind all of this is that this entire outcome has essentially been kick-started by the European Union moving to cap interchange fees on Visa/MC debit and credit transactions - a move against Visa and MC, but one that backfired and opened the doors for national card schemes to essentially be eaten alive by those very two actors. That's because that move made these transactions cheap enough for many big merchants to start accepting these cards in the first place. Before the cap, those rates were outrageously expensive, and virtually nobody outside of the travel business accepted them.
That said, for many shops it was either girocard and cash or just cash only. Merchants just weren't willing to eat the fees associated with other card schemes.
Things have changed, though. The EU has capped the interchange fees of four party debit and credit cards to 0.2% and 0.3% respectively and now most shops tend to accept MasterCard and Visa as well.
Those cards that actually use the "ec" brand (rather than girocard) are proper debit MasterCards. You can see this on MasterCards German website [0]. Some banks are also using that branding to issue cards [1].
Beyond that, there are some girocards which are co-branded not with Maestro, but with MasterCard proper [2], although that is also unrelated to my previous statement.
[0] https://www.mastercard.de/de-de/mastercard-fuer-sie/finden-s...
[1] https://www.consorsfinanz.de/banking-service/kontakt/geld-ei...
[2] https://www.it-finanzmagazin.de/girocard-mit-co-badge-master...
This is enabled by the payment service provider APIs as per the EU Payment Services Directive (PSD 2) and the EU Single Euro Payments Area (SEPA) infrastructure that make these payments free and "instant".
[1] https://swiipe.com/en/
https://www.rupay.co.in/
Brazil has a pretty successful system in place. The only reason I still use credit cards anymore are aggressive cashback policies. For everything I can do with PIX I'm more than likely to choose it nowadays.
Edit: Could it also be that Amazon offer their own Mastercard credit card and they're trying to nudge people towards that?
I'd never even consider an Amex card due to my perception of it being something that many places won't even accept.
Lots of business meetings in London -> merchants need to accept Amex company cards -> people realize acceptance is high -> people look into Amex for their personal usage, for instance to enjoy higher rewards.
If you compare the rental flats with other top European cities, it’s really not overpriced.
Look at a 6k eur pcm flat in Barcelona and London, in Barcelona you will find slightly bigger flats with terrible build quality and services. In London you’ll get top quality fit and finish with excellent services.
Good luck finding a building with a decent concierge team in most European capitals. It’s almost unheard of.
Luxury product for rich people? Yeah, of course. Overpriced? Definitely not, there simply aren’t any viable alternatives to settle in.
Amex also has many more premium card with annual fees , travel perks etc which might be more relevant for someone living in London.
However, it's a charge card and not a credit card, so it does need to be paid off in full every month.
Only 2 of the high street banks offer them, and one is moving away from them.
The rest are all Mastercard.
For example Revolut is available in a lot of countries, they're UK-based, and I'm guessing the cards are UK-issued since a lot of merchants think it's a GBP card (and they conveniently ask if they should do the currency conversion (and conveniently don't tell you their conversion rate is much higher and profits them)).
I assume Amazon tried to leverage the tens of billions in purchases (across regions) to get a better fee structure from Visa and Visa said “no”.
No different than Costco dropping their long-standing Amex agreement in favor of Visa in the US a fewer years back.
“Kill the chickens to teach the monkeys” as they say in Singapore.
Now other companies know Visa is willing to tell the likes of Amazon “no”. Lesser companies won’t even ask.
---
Some customers received a notification from Amazon this week after making purchases, which said that "starting 19 January 2022, we will no longer accept Visa credit cards issued in the UK" due to the high fees charged by Visa to process the transactions
Like who is paid what exactly by whom. Is this somewhere available?
"Starting 19 January, 2022, we will unfortunately no longer accept Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit card transactions. You can still use debit cards (including Visa debit cards) and non-Visa credit cards like Mastercard, Amex, and Eurocard to make purchases. Please update your default payment method now, or add one of these new, eligible payment methods if you do not have one."
It's clearly some sort of negotiation ploy over fees.
--
[1] https://www.bbc.co.uk/news/business-59306200
No doubt they’ll work out a deal where the consumer pays more.
But additionally I use the +servicename trick on Amazon, and the email was delivered to me at jack+amazon@myemail. If it’s phishing it’s incredibly well done as it came from the source to the recipients used by the source
This says that only Visa credit cards will be blocked, not Visa debit cards.
I have a speculative guess that it might not just be about the merchant cost... It does seem that Visa offers more customer protection than Mastercard from what I can tell, so perhaps too many customers have got Visa involved for refunds because of the many dubious Amazon marketplace sellers listing fake or substandard products.
"The move to increase interchange fees will bring it into line with MasterCard, its rival payments group, which announced a similar move in January"
So it seems that Visa rate trails the Mastercard one and they will be the same.
I don't know for sure, but 2% over revenue could easily be about what the government collects in corporate taxes derived from that revenue.
at least all b2b transactions should move out of card payments, and hopefully with crepto or modern digital banks the b2c will follow, but right now too many banks are holding people's money and too many of them are consolidated / act as a cartel.
It is also virtually cross subsidy from people paying cash/bank transfer to people paying by credit cards.
And as per my other comment, the customer isn’t necessarily paying the full 2%. If credit card companies became charities and charged 0% would all prices drop by 2%? Of course not.
And if that is a substantial amount - how will the Lightning Network not drive Visa out of business?
[1] https://www.visa.co.uk/about-visa/visa-in-europe/fees-and-in...
Also, there are different payment systems (non US). It is up to sellers to support them.
Also, paying at stores, clinics, doctors, etc.. all done with PIX nowadays. Very few people are carrying cash these days. Very few clinics had a payment machine to accept debit/credit cards and now with PIX they have no incentive to do so anymore.
To transfer funds, you can specify the user's ID (which can be a phone number, national tax identification or some random string the user creates). To pay for purchases, you usually scan a QR code or copy a payment string using your bank's app/website. It's very convenient.
0 - https://www.bcb.gov.br/en/financialstability/pix_en
Absolutely, and I kinda expect this to become the case eventually across Europe, as the "cashless society" vision becomes inevitable. If you make it de-facto compulsory for citizens to operate electronically, it's only fair that there should be the sort of guarantees and accountability that only the State can provide, even if you lose a bit of innovation or efficiency.
Unless a business is extremely small, extremely low margin or doesn’t want an electronic record of the transaction most businesses prefer not to deal with cash.
So you are back to a payments network. Those are very hard to bootstrap and are not free to run.
https://www.businessinsider.com/pablo-escobar-and-rubber-ban...
https://www.mypos.eu/en/pricing-and-fees
Maybe look at Adyen instead.
By VISA/ MasterCard contract backed by governments' regulations a merchant in EU can not charge more because he's using a card instead of cash. Of course the transactions costs are paid by the customer, it's just all customers instead of those paying by card.
That's why some cards have charges, to the merchants, of around 2%... because the customer who use that cards does not pay them.
If I, as a customer, when doing an Amazon checkout saw a 2% charge to use VISA I would drop them in a second. Because that's hidden on purpose, I keep using it.
No idea what's going here.
https://www.frbservices.org/financial-services/fednow/about....
It will be a cheap/free, instant, money sending service. What will be the point of visa/mastercard/paypal then?
In a cashless society, there's no point in mugging and robbing, because people don't have untraceable items of value on the at all times.
The only realist way to counter it is to stop charging VAT.
> In a cashless society, there's no point in mugging and robbing, because people don't have untraceable items of value on the at all times.
Because all the valuable items are digital and hackers can steal your money without meeting you in person.
Let's just take an example of who is endangered... a 16 year old girl from a strictly religious family who had unprotected sex and needs Plan B. In a cash environment, she'll pay for it with her allowance, and her parents won't ever discover she had bought Plan B. In a cashless society, her parents can see the evidence by checking her bank account.
Also, un(der)documented / "illegalized" people literally won't have a way to survive, as their access to bank accounts may be revoked or the government demand a live feed of all transactions, which means that e.g. the police can be dispatched to a supermarket where that person just bought food.
IT (and politics) definitely needs ethics education, as all the tech bros and other hypers of "going cashless" never take into account who will be negatively affected by their ideas!
Playing devil's advocate: that's only if the payment and the product are linked. When I buy something at a pharmacy with a credit or debit card, all that appears on the card together with the value is the name of the pharmacy. Looking at the bank account does not reveal whether the item I bought was toothpaste or chocolate (yes pharmacies also sell chocolate here).
A lack of cash allowance can easily be explained by buying some soda or fast food, but a paper trail is harder to consistently explain away.
https://en.wikipedia.org/wiki/Missing_trader_fraud
Right there at the top...
Customer Obsession
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
Nothing about this is customer obsession. This is Amazon throwing their weight around and putting customers in the firing line.
Rather annoyingly most of my spending with Amazon is on my Visa credit card - can't quite figure out why they are now more expensive to process than the historically expensive AMEX.
I can pay with Visa on AWS, but not Amazon?
And if I close the Amazon account, it will close the AWS account?
I only really use AWS for S3, and if Cloudflare get R2 into my hands soon it does appear that Amazon will have finally done that which de-Amazons me... made it impossible to pay them. If the choice is "Change bank" or "Change shop"... one of these has far lower friction.