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Comment by nibbleshifter | Hacker News Reader

Its fucking amazing how backwards the US financial ecosystem is, and I don't really understand why.

This applies to more than just banking. They were the first to innovate. Thus they get stuck with first generation technology while other countries leapfrog ahead.

Example: back in 2009 I got an American Express card with contactless technology. It was one of the transparent cards with the blue square in the middle so you could see it right inside the card. Problem was, no store had a terminal it could be used with. After a few years, Amex gave up on it and my new cards didn’t have it. Meanwhile the rest of the world is starting to roll it out. After a few more years (last 4-5 years) cards finally got contactless again, after the rest of the world had had it for years.

There is more to it than that. Europe tends to write laws with consumer protection in mind. The US tends to treat companies and people as equally powerfull, with the courts protecting both. After decades of different legal philosophy, we see these differences:

Europe tends to be a whiney nanny state, but lacking enforcement means companies can violate legal rights for years and then be very surprised when they get slapped with more and harsher enforcement. Facebook is learning this right now.

The US, meanwhile gets 'adequate protection' against fraud, credit scores, identity theft, frivolous lawsuits and binding arbitration. If you're unlucky, the US gov and corporate system will grind your life to pulp for no reason, and the powers that be won't even notice they did something

As an european, I vastly prefer what I got above the US system and avoid credit cards as an unsecure mess that gets your money stolen. But maybe that's just because I never learned to navigate the US system.

Clearly both systems can function and both have big holes.

Precisely the advantage of credit cards is that your money can never be stolen, only the bank's money. People keep talking about fraud protection, but that's the difference between a debit card and a credit card. When your debit card or actual bank account information is stolen or used fraudulently, your money is gone, until the bank deals with the situation. When your credit card is stolen, the bank's money is gone. You never owe it, you never pay for it, you have exactly the same amount of money you had before the card was stolen. You're not suddenly short money until some process runs to completion. You are at most dealing with the inconvenience of not being able to charge that card anymore until you get a new one.

A surprising amount of people also get away with spending the bank's money and never paying them back, which I suppose some people also see as a benefit. They probably do pay enough late fees, interest, etc. in their life that the bank comes out ahead anyway, but I know multiple people who simply didn't pay on a credit card - ever - and nothing happened to them, other than a few-years credit hit that didn't stop other companies from continuing to offer credit.

There was a credit card attached to my bank account. If I buy something, the money disappears from my bank account on a fixed day of the month. I have no idea about how to influence that payment, and it seems not available in the web UI. I have no idea how not to pay that money, or how to dispute charges with it. Presumably I can visit the bank. But it has no chip and pin, so if anyone has the number and means ill, my money disappears. So it basically behaves like a very insecure debet card with a delay, i.e. I have to manually validate the payments corresponds to what I've done every month. It mostly seems a hassle to me. As I have no credit score that I know of, I also have no idea about how the bank wants to punish me if I don't pay them. I got it in the past to buy stuff from US websites, but payment processors accept my other means of payment by now. In fact, it expired over a year ago and I never saw a need to renew it.

+ it is generally possible to set up autopay for credit cards in the US, but it is not the default and I have never seen it not be very obvious on how to turn off. There's regulations about this in the US.

+ US debit cards and credit cards virtually all have chip and pin, but you can use only the number as a fallback for things like over-the-phone or Internet transactions, so it doesn't do much good. Terminals do usually require the chip, which presumably hinders skimming. AFAIK the old stamp machines are even still supported, though I haven't seen one in a while.

+ disputing charges on US cards generally consists of 1. login to the website 2. select the charge / hit the hamburger menu next to the charge 3. click dispute transaction.

Yeah, Americans often stick to the first version of something that worked well enough. Examples: election system (indirect), constitution, 110V sockets, iPhones, imperial system of units... It's hard to break established practice.

It's always kind of wild to watch people write a check and then use the much more convenient and secure contactless.

(Usually the store electronically submits the check at the time of sale...)

Regulatory capture, institutionalised, legal corruption.

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