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Comment by ZeroGravitas | Hacker News Reader

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.

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While not nationalized or regulated, Poland is an interesting example with its ubiquitous application of BLIK, a bottom-up initiative of major Polish banks:

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.

I like Blik. Is dead simple to use specially on the internet.

Did not knew about the p2p thing. Thanks.

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.

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.

[0] https://www.handelsblatt.com/finanzen/banken-versicherungen/...

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.

[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...

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.

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.

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).

Really? Nice. There is no need to have Visa et al. take a 1-3% tax on everything.

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.

I reckon a situation like that is un-European, the Commission will probably step in at some point.

that would be suicidal, but an EU initiative for incentivizing low-fee cashless payments is not out of question.

How is it un-European for Denmark to prefer (if they actually do so) a national Danish (hence EU member) card above an American card?

Danes have to pay a fee in order to get payment cards? I thought consumer protection was big there.

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.

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...

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.

[1] https://en.wikipedia.org/wiki/EFTPOS#Australia

See this comment - https://news.ycombinator.com/item?id=29250582&p=2#29251838

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.

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".

[1] https://swiipe.com/en/

India has rupay as an alternative to visa and mastercard.

https://www.rupay.co.in/

Eh, Russia kind of has a thing =/

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