European Payments Initiative (EPI)
epicompany.eu
epicompany.eu
It says they're building on EU Instant Payments, which has been standard for a while, and for supported banks (a good percentage now, and presumably all 30 banks listed here) means bank-to-bank euro transfers are free & take less than 10 seconds, 24/7. See https://www.ecb.europa.eu/paym/integration/retail/instant_pa....
Sounds like they're planning to produce card infrastructure on top of that, so with an EPI-supporting merchant and an EPI consumer card, a card transaction is implemented directly as an instant bank transfer, with no traditional credit card companies involved.
Oh and they're proposing to support p2p in the same way too. I guess that's more like competing with Revolut et al, since you can't really sign up to process Visa/Mastercard as an individual today anyway.
Does anybody know any more background on this? I have no idea about the seriousness of the proposal or anything at all, but it sounds like a big deal if they can pull that off.
At least in the US that kind of fraud is the bank’s problem, which is why I prefer using credit over debit.
I suspect fraud is less of an issue because accepting signatures for card purchases hasn't been common for at least a decade (you need the PIN for all spending above the contactless limit - about 30 euros in most countries) and PSD2 (mandatory for transactions since 2020) requires 2FA authentication for most online transactions too. See https://en.wikipedia.org/wiki/Strong_customer_authentication.
That means copying or stealing a debit card, or capturing entered online card details by themselves won't get you very far in the EU, which removes a lot of classic fraud. In the remaining cases though, I have no idea!
In the U.S. the system favors the consumer, so the merchant has to actively prove that it was not fraud (by default, this is definitely not blindly applied).
The signature part is one part of this, but the U.S. actually has laws in place to push this, and that largely has driven the non-PIN policy in the U.S. (since most of the anti-fraud pressure is on other parts of the system).
(2) Putting the risk on credit card companies highly incentives them to fight fraud. This is ideal because they make the money and they are best positioned to fight it.
(3) Your premise is false to begin with. Higher fraud, like taxes, is payed for by some combination of the customers, the employees, and the owners (though actually it's more complicated than that due to contractual agreements: I believe merchants bear the penalty so we get recursive).
Even when the customer pays exclusively, there's a propagation delay that hits somebody else's wallet in the interim. (E.g., merchants don't raise prices immediately everytime fraud/taxes/wages increase.) It's a mistake to think of this as a mere transitory effect rather than a structural advantage that favors the consumer.
However, using security factors like secrets or updating the withdrawal limit is possibly inconvenient, that's why some people rather not use them and companies are incentivised to just recover the relatively minor losses to fraud in fees.
I guess it comes down to the fact that in some countries people are used to having about five different cards, and in others it's close to one.
((1) is both disingenuous (ignoring sensible withdrawal limits) and mathematically wrong (unlimited fraud spread evenly over all accounts is still unlimited fraud against every account). I guess people would pay more to avoid surprises, but they'd like it even more if there was less fraud.)
(3) The point was more that someone will have to pay for the fraud that is happening. Deriving a structural advantage from not using secrets is far fetched.
[1] https://en.wikipedia.org/wiki/Strong_customer_authentication
This makes fraud much harder, while still allowing online payments with credit cards.
It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
> This makes fraud much harder, while still allowing online payments with credit cards.
As an European I can confirm,
> It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
Nope, sadly. Amazon apparently can magically skip the 2FA most/all times.
My guess is that amazon has deals with banks to streamline the process, but I don't really know
In Europe the last time I saw a cheque was in the early 90's, and they are still used in Canada for things like rent.
I also remember traveling to the states in 2016 with my tap-enabled credit card, blowing people's minds in shops. All their equipment was ready for tap, but no US cards had it yet.
It also surprised me that things like Venmo have a reason to exist! I don't think many Americans know how bad they have it terms of banking tech.
It's still a thing in France, mostly because you can control the moment it's cashed in, it can be used as collateral for rent and so on, and because there's a tradition of paper documentation cheques play into.
But people of my generation rarely bother to get a cheque book at all, bank transfers are just fine.
How bad we have it. Comeon, just stop it.
So five years ago, you still had to enter a pin / swipe, you couldn't just tap. We've got it so bad. So bad! It's the dark ages here, circa five years ago.
> my tap-enabled credit card, blowing people's minds in shops
Yeah right. The iPhone had been around for nearly a decade, but oh wow tapping credit cards to blow minds.
> It also surprised me that things like Venmo have a reason to exist!
Crazy stuff! But like you said, we've got it so bad. An easy to use software service exists to transfer funds, incredible. The suffering. I feel dread just writing this comment and thinking about it.
I just listed some examples, but the frustration was real. Individually all minor inconveniences, but when you are used to a better system it's frustrating.
Top 3 real frustrations are the difficulty of international wires, the frequency I have to visit a branch and how weirdly hard it was in SF to split bills (the last may have changed since 2018).
But sure, first world problems!
And yet you don't know that, as nraynaud and bayart said, the French use checks (about as often as Americans). Checks are definitely a thing in the UK, too. Are France and the UK no longer part of Europe? (If you make a Brexit joke here, as opposed to actually trying to respond to my point, you automatically lose.)
>Top 3 real frustrations are the difficulty of international wires
I will give you this. When I had to send $2000 to a Canadian earlier this year, the cheapest method we found was to do so through Coinbase using Bitcoin; I think the fee was about 1% (for me to purchase the additional Bitcoins I needed; no fee charged by Coinbase for the transfer itself because it was internal).
>the frequency I have to visit a branch
I've been a customer of USAA Bank for years. As it was created to serve the military (although its remit has expanded), USAA has always been designed to work without a local branch. There are many such branchless banks in the US. That said, I have accounts with other, "traditional" banks and they have been about as online as USAA is for years.
>and how weirdly hard it was in SF to split bills (the last may have changed since 2018).
This is one of the things people use Venmo for.
The reason that Venmo is seen as an unusual, and somewhat superfluous concept, is that the functionality is just expected to exist as part of every financial app, either legacy/mainstream bank or trendy new fintech upstart - it's really not anything special enough to require a separate system.
IMHO credit cards and the systems around them are a remnant of the past. The US just hasn't caught up with the rest of the world yet.
weird. i'm european, live in europe, only use credit cards. either visa or amex. they offer better protection when buying something, protection against scammers, plus added benefits (from travel to cashback etc). it also contributes to my credit score.
if anything i think europe is actually craving a lot more credit, see klarna as a good example.
But using a credit card like MasterCard or VISA in Denmark usually incurs a fee with most merchants.
As for protection, I think you still have months to report fraud. Although you should always report it as soon as discovered.
2008 changes a few things and somehow Debit Card in US caught on. Credit Card in EUR increased as well. I think Debit Card now represent something like 40%+ of transaction in US. Credit Card in EUR is still comparatively small, but much larger than pre 2010s mostly due to company spending.
Losing a card isn't very stressful here.
There's no difference in fraud protection between debit and credit cards in Europe, at least on my bank. Fraud is refunded following the same rules.
Most banks will refund fraud in most cases even on a debit card here (UK)
For credit cards the credit card issuer also shares legal liability with the vendor for purchases over £100.
https://www.ukfinance.org.uk/area-of-expertise/cards/chargeb...
Not really. Europe has Vpay and Maestro/EC. Online payments can be done in some countries by "Sofort" https://www.klarna.com/pay-now/
They may just want to standardize it for all of Europe. In general, US banking often looks like stone age compared with Europe. Alo ne a money wire is annoying. IBAN payments are free. I think they charge a small fee for instant money wires.
...owned by Visa and Mastercard?
Basically, a merchant redirects you to your own bank's website. You have to log in, but all transaction details are already fixed. After confirmation, you're redirected back to the merchant and the transaction is complete.
Since Brazil implemented our free instant interbank transfers (it's called PIX), people have been using it for all kinds of stuff that previously required a credit card. The seller simply asks the buyer to tag the transaction, and reads the tag on his phone when the buyer says the payment is complete.
[1] https://www.rtlnieuws.nl/tech/artikel/4843376/instant-paymen...
The article mentions this, some Danish businesses switched away from PIN to direct payments, to get the funds immediately.
UPI has been a great convenience for people since its introduction and it has a very good penetration.
My qualms with it are its is association with mobile number as identity and lack of open-source apps both a limiting factor when it comes to preventing oligopolies or monopolies from influencing control over it.
In Poland, there's BLIK which is a pretty cool thing: a system developed by all major Polish banks, you only need an Android/iOS app of your bank, which generates a 6-digit token valid for 120s, then you use it on payment processor website, or to withdraw money at most ATMs in Poland. Then you get an in-app push notif to confirm the transaction fee and recipient.
Are there any similar solutions anywhere where you can withdraw money without physical debit/credit card? (I'm surprised BTW I never saw an ATM compliant with Google Pay/Apple Pay, they all want plastic)
Why do I have to think of Nostradamus and The Mark of the Beast now? ;->
Besides that, I don't really understand what it improves?
I have that already. Be it via browser from desktop, via phone(Landline!(by talking to a human!)), or some crappy app on some f---ing gadget:
SEPA number, amount of money, some text, optional time and date(for not being instant), bzzzzt, there!
(Since about 2 years?)
How does something that is highly traceable bring 'value' and is preferred over plain cash?
Everyone claims they want untraceable money untill they get screwed over by a merchant or employer, then having traceability makes it much easier to go after the crooks.
I, for one, would rather not use anonymous untraceable crypto if i am about to pay for a house
But then I also want to have a stash of cash "just in case" and be able to buy substances and tools that might be illegal... So YMMV. I guess, ideologically, I prefer to lobby the government to make something legal, not to ensure there are loopholes so that I can get away with illegal stuff I want to do. But I understand that is not always possible.
Also pretty much no one has cash any more.
Um... Does it require 30%+ if it was on iOS?
I’m surprised that it’s legal for a bank to refuse a cash deposit.
The road to hell is paved with good intentions.
But EPI solves a different issue.
Satispay's killer feature is that it's aimed heavily at paying bar and restaurant checks, which is more common than sending money between acquaintances.
So if you share your location with your app, and the restaurant you're in is a Satispay merchant, it will show up automatically as a receiver without the need to scan codes or anything.
I'm sure other countries' payment apps have their own neat little features that others don't. Best case scenario would be for a common infrastructure to be adopted by all of them, and then they can interoperate and compete on feature sets, or even merge.
EPI is all about doing away with Visa and Mastercard, while providing interoperability across Europe, "simply" leveraging infrastructure that already exists.
Not sure what to make of that, but interesting nonetheless.
Sizes aside, the fact that Spain got this many banks on board this project is in and of itself pretty noteworthy. The fact that there are so few participating countries is also pretty interesting.
0. https://en.wikipedia.org/wiki/List_of_banks_in_Europe#Larges...
I'm not. It's an interesting project, and I'm genuinely curious as to how they ended up with that roster of initial member banks (if nothing else, because it sort of informs my expectation of this plan succeeding)
They represent 250 banks across Europe (according to their web-page): https://www.nets.eu/who-we-are
For example, Danske Bank (the biggest Danish bank) uses them.
Hoping that this will work but I highly doubt it - most European banks were created a very long time ago and like all legacy systems it's really hard to change their habit.
Even if I'm using this "immediate payment system", I'm pretty sure my local bank will still delay my payment by a few days "because they are used to do it that way".
The payment systems in America are literally 30+ years behind Finland and UK. It's absurdly bad. People still send paper checks. There's no national infrastructure for bank transfers. You shouldn't give out your bank account number to anyone (unlike EU/UK where it's perfectly safe to post account numbers). Direct debit seems crazy unregulated.
Credit cards and bank-specific transfer systems are used to patch the most glaring holes in this mess, which I'm sure pleases Visa/Mastercard and the banks themselves, but leaves everyone else worse off.
One would expect banks and the Fed to eventually adopt similar infra that Europe is (per this submission), where card infra can use these Instant Payment ("FedNow") rails for C2C, C2B, and B2B payments (although, eventually, everyone will move to QR codes a la China; Zelle is beta testing QR code support for instant payments on their network [5]).
US payments currently suck, but I wanted to share that progress is being.
[1] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
[2] https://www.pymnts.com/news/faster-payments/2021/five-banks-...
[3] https://www.frbservices.org/financial-services/fednow/blog/u...
[4] https://www.frbservices.org/financial-services/fednow/instan...
[5] https://www.zellepay.com/support/how-do-i-use-zelle-qr-code
Also, Wise today supports cross border P2P payments and are a more reputable firm than Revolut. I would recommend Wise over Revolut if someone was looking for such a feature.
From my perspective none of the things you list are really problems in my life.
* I don’t even own checks and if I get one I take a photo from my banking app and have it deposited.
* I only use my debit card for the very rare times I withdraw cash and instead just use a credit card that auto-pays from my bank directly each month in full.
* If I want to transfer money between friends I just use Venmo.
* I’ve never had fraud issues but my sister had her card skimmed in Europe and calling to report was enough to reverse the charges.
In London, once I'd signed a lease, the rental agency simply gave me account numbers for the deposit and other fees. I sent the payments to UK from my Finnish bank account at no extra cost (bank transfers within the EU/UK payment area are free).
In New York, once I'd signed a lease, the rental agency told me I need to bring them seven cashier's checks by Monday for the deposit and various fees going to different destinations (condo management corporation, etc.) At this time I was in London, so shuffling physical pieces of paper from a bank into an office in NYC wasn't going to happen! Kindly the agency agreed to allow me to wire them the total sum, and they would "cut" the checks for a mere $15 / check. For seven checks, that was an extra $105 fee — for nothing really except to work around a system still built on 19th century assumptions of money. (I also had to pay fees to send the wire transfer, because Americans somehow believe that bank transfers cost tens of dollars to process.)
Additional patchwork layers like Venmo don't solve these issues. Sending thousands of dollars to a landlord or management corporation isn't the same as sending $50 to a friend for dinner.
I thought the banker who told me they would send a check was joking. Or just using it as an metaphor for making a payment to the account. But no, at one point the check actually got lost and and then reappeared later so my balance with PG&E went positive.
Oh, and it could only pay fixed amount at regular intervals.
I eventually learned that most vendors would accept check numbers, and then magically withdraw from my account. So long as a checked a box that effectively allowed them to withdraw whatever they deemed I owed them.
In Denmark I get an electronic statement of all the bills I have signed up for automatic payment. It just works.
Oh, not to mention: to rent an apartment in the US I had to get a cashier's check. I'll admit I didn't even know that was a thing...
(In Denmark banks don't accept checks anymore)
For renting I directly had monthly deposits drawn from my bank account after providing a routing/account number to the landlord. I lived in four different apartments and all of them just directly withdrew from my bank account automatically each month. Even for an initial deposit it was directly transferred from the bank or put of a credit card.
What actually protects the bank account numbers in the UK/EU? Why do people seem totally unconcerned with giving out this information there?
It's basically the same as an email address. You can't read someone's email inbox just by knowing their address. Similarly, you can't send money out of a bank account just by knowing the number. (You could spam them with money, but most people wouldn't mind.)
You might if you walk into a branch with a little fake ID and a smile. Or you get a forced "vacation" in jail :)
But yeah, it's not naturally assumed that you can just do something with those numbers.
Europe, Asia, EU... why make such meaningless generalizations?
Have you ever done banking in Japan?
> Even if I'm using this "immediate payment system", I'm pretty sure my local bank will still delay my payment by a few days "because they are used to do it that way".
You realize there are EU directives behind the standards implemented by banks? SCT Inst has to be operated 24/7, and transfers available at the receiving end within 10 seconds.
In the UK transfers are free and near-instant, and contactless is ubiquitous.