Bank transfers as a payment method (2021)
bitsaboutmoney.com
bitsaboutmoney.com
Each banking app that supports this system can give you a six-digit code valid for two minutes. You can enter this code in a supported store or ATM, either online or in-person, you get a popup in the app with the amount to be paid, the merchant and a description of what you're paying for, you click "confirm" and the transaction goes through.
This system is great because it enables secure payments on devices you don't trust. Because the codes are single-use and transactions require an extra confirmation step in the app, it's perfectly fine to give a code to your child who wants to buy something online, text it to a family member who is at an ATM, or give it to a friend who has free shipping due to a loyalty program and wants to order something for you.
This system can also do transfers and transfer-requests to a phone number. In some banks, you can even generate "Blik checks", 9-digit codes that are valid for 24 hours, cover a pre-set amount and don't require a confirmation, which you can give out to someone. These checks have been used to efficiently send money to unbanked Ukrainian refugees when the war started, as they could simply be redeemed at any supporting ATM.
I think this is something of a simplification since SEPA encompasses multiple types of payment. While Direct Debits are pull based you can also make push based payments from your bank, usually for free.
It's completely normal and safe in Europe to share your bank account number (IBAN) with others so that they can send you money through online banking. This is how I paid my rent (you can setup a recurring payment, kinda like bill pay but instant and without the risk of a physical check potentially being delayed in the mail); settled up with friends for shared expenses; and got paid for freelance consulting (I'd put my IBAN on the invoice.)
Then came direct debit, where giving out your IBAN now somehow became a fraud risk. Meanwhile, most companies still publish their IBAN on their websites. Customers hate giving away control over their account and seeing random money transfers from mysterious companies. Banks hate all the random middleman grabbing money out of accounts. We need these new middleman for some reason.
I have no idea why they implemented SDD like this. It reeks as if someone decided to force the US payment system on top of SEPA, even if the legal framework for it is missing, there is a huge cultural impedance mismatch, and the credit card based system is inferior in almost every way to the existing debet cards. Things that were working just fine in the 1980’s are now losing consumer trust because of SDD. All of this was a very predictable idiotic clusterfuck. Why?
Furthermore, I don't think SDD is a big fraud risk. To be able to make direct debits, you need a contract with a bank, and, at least in my experience, they're quite thorough about that: you need to have a legal entity, banking history and show government identification; and even then the amount you can direct debit is limited to just a little more than your usual turnover. If a fraudulent debit happens anyway, you can one-click, no-questions-asked reverse them for up to eight weeks. After that, you can report it as an unauthorized transaction for up to 13 months and the bank will reverse it unless the creditor can show a signed mandate.
I don't think I've ever heard of anyone having had a direct debit from an unknown party. At least over here in the Netherlands, all banks also support requiring pre-authorization for direct debits nowadays, eliminating the risk completely.
I do not know about other EU countries, but here in CZ, i have to allow each counterparty and set a limit to maximum amount of direct debit to that counterparty in order to direct debit transfer be accepted.
It is useful for transactions like monthly phone payments, where exact sum is different each month.
If your bank accepts direct debit without you allowing it, then it is a problem with your bank, not with SEPA.
Just because everyone does it this doesn't mean it's safe to do. If some trolls manage to get hold of your IBAN and the account isn't protected from direct debit, you will get fucked by idiots ordering pizza and dildos.
I don't know anyone who this has ever happened to. Only vetted companies are allowed to perform Direct Debits, e.g. utilities who know your physical address. In the UK (still a member of SEPA even post Brexit) the Direct Debit Guarantee [1] makes it easy to reverse any errant Direct Debits through your bank.
The pizza or dildo company likely won't accept Direct Debits and will require a debit or credit card for the transaction instead.
[1] https://www.directdebit.co.uk/direct-debit-explained/direct-...
Lidl also had huge issues surrounding sepa debit payments, it was in the media.
Credit card payments are getting more secure by the day in the EU, and direct debit is still a piece of rubbish.
The scenario is not fraud, that is hard(er) to pull off due to vetting, but trolling someone with fake online shop orders.
> In the UK (still a member of SEPA even post Brexit) the Direct Debit Guarantee [1] makes it easy to reverse any errant Direct Debits through your bank.
It's the same here in Germany, but you're still stuck with unwinding all of the bullshit.
> The pizza or dildo company likely won't accept Direct Debits and will require a debit or credit card for the transaction instead.
Here in Germany, paying with SEPA DD is the norm.
In fact, in some EU countries businesses are required to publish their bank account numbers in some central, government-run registry. It wouldn't be safe to do, if it could result in having your money stolen.
This is a loaded comment, because I think it's bullshit. The cost to process any payment of any size under the $10,000 AML threshold is constant, and functionally zero. As consumers, we've become a profit centre, and there is between $600m and $1b of "cost" which is being met by a % value of transaction fee, irrespective of the real costs of operation. It's regulated theft. Tax office loves it because the black economy is shrinking, small traders are wearing processing costs, intermediaries like stripe are hoovering up data, alongside p2p and inter account direct debit and payment models. Credit unions and banks have an uneasy alliance with "key" and "associated" status to inter bank clearing data networks.
The direct payment scheme we have (osko/payid: typically Australia they couldn't decide a single branding) is seconds to complete sometimes and competes with other forms of transaction clearing for cost and time.
We still have chequebook process clearing times. We still have "not on weekend" and "3 business day" rules. It's totally Bizarre.
When they spun credit and debit card fees out from each other I asked some questions of the finance regulators and they said "works for us, cheaper overall" but I think they left this $600m+ profit component in on bogus logic:
Tl;Dr real costs of settlement per transaction do not relate to how costs are met. Banking is highly profitable and is a protected industry under a benign regulator.
Your argument fails here, because you are wrong here. The cost is not zero, because what the bank does for interbank payments is subject to the same regulations and procedures as everything else a bank does. Banks charge money for transfers because there's regulatory overhead and shared liability.
What happens if they've missed you're a money launderer for the cartel and have to pay a $2bn fine because they processed your transaction for nearly nothing, instead of doing proper checks and stopping it?
Sorry, but you're just plainly wrong here. Very populist and very wrong
Functionally zero per transaction (sorry I should have been more explicit) obviously there are real world data comms and CPU and compliance costs. They are not "equal" to the amount of revenue the system is extracting. The absence of variance in system costs unsettle me when a % transaction value price is applied. under the AML reporting limits
Fund the risk side from proceeds of crime! What they've done is spread throughout the system the risk costs onto all of us.
I, not "plain wrong" we just disagree about cost assignment, risk, and benefit.
Do you disagree that the banks and fintech are profiting from their transaction cost models? Hint: in 2029, about 36% of card transactions were Debit cards, with no component of credit card interest or risk: it's money held in account earning banks profits twice: once as deposits earning far lower interest (bank gets to leverage the money) and once again as merchant fee and transaction cost.
80% or more of profit comes from the other side: credit card interest, and you can certainly assign income from card fees to a "cost" bucket for tax purposes but we and the merchants pay it!
You're trying to handwave your way into saying we should care only about the specific cost of one specific bank function, which is silly.
Interbank transactions cost money for the same reason every other service costs money, because you're paying a business to do something for you. Climb off the soapbox and enter reality.
I've used this method for paying back friends for minor loans, or suchlike, and also for paying my rent. And once for buying physical goods from a website: they gave me an invoice with a payment reference number and an IBAN, and I sent the amount requested to that IBAN with the reference number supplied, after which they shipped the goods.
Maybe SEPA has both push and pull models, and this article neglected to mention the push one? (I do have direct debits on my account, for a few charities, which are a pull transaction. And standing orders, which I think are also a push transaction.)
With credit cards, I still have the money in my possession, the dispute process is about the credit card company trying to get paid. With a bank transfer, the money is gone from me, and the dispute process is about me trying to get my money back.
Even with the same policies on paper, this one fact makes me prefer to pay with credit cards wherever possible.
An early example of this is T-Mobile’s recent decision to remove their autopay discount if you use a credit card instead of a deposit account (their CC interchange fees are material at their scale). Instant settlements at low or no cost give merchants options to squeeze out their payment costs.
The single banking system of Canada is a massive win in this regards
Honestly the only thing that isn't perfect about this system is that there's no hyperlink standard. If you want to pay a PayNow QR code on your phone, you have to screenshot the QR code and then share it to your banking app. Would be nice if you could just tap the QR code. Other than that it's hard for me to imagine a better payment system.
also only 50 cents comission, no %.
Big for big item sales
I didn't know that there's high fraud in SEPA either. Whoever tries to charge me, I can block em and contact my bank to make em know I didn't allow such charge, and in my case, when that happened (only once in my life) they handled everything and I got my money back.
This varies significantly by country and bank. At my bank I can authorize transactions (up to a preconfigured amount) just with my fingerprint, and it takes like 5 seconds.
Sometimes larger transaction (buying a mattress for example) seem to SEPA push based, but I don’t do a lot of one off transfers (using SEPA).
It does seem like Bizum has taken over for person to person transactions, though. Even some companies are accepting Bizum for online payments, and I’ve seen some small shops posting a QR code for their Bizum at the checkout counter.
The launch is for late July https://www.frbservices.org/news/press-releases/062923-organ...
In computing terms, think of FedNow as something like TCP: it's very low in the OSI hierarchy and not meant to be used directly by users. The hope is that it will enable nicer applications to be built on top of it, things which are not really possible to build on top of ACH, but it is not a payment application in and of itself.
The bigger culprit is private entities controlling infrastructure, and these entities want their tax.
Yes, things like wire transfers are annoying (and stressful), but most people do them only very rarely (like when buying a house). ACH is slow and a dumb protocol, but that's often a "set it and forget it" thing when you set up autopay for your electric utility or credit card or whatever, or set up direct deposit for a new employer.
Meanwhile, I can do 80% of the money-moving things I need to do with my phone, 19% with a little piece of plastic I always have on me, and the remaining 1% (or less, really) is mostly cash, with some teeny tiny fraction being wire transfers. I expect my situation isn't entirely typical (as I live in a large city and do a lot of my transactions on the internet). I'm sure many Americans use cash a lot more than I do (either out of necessity or desire), but it's... really not that bad?
I was helping a Canadian friend with their bank account and TD's website looks like it's from the 90's.
And getting an SMS message when your credit card is charged? Yeah, it used to be a separate website (why?) but no longer offered.
It looked absolutely archaic compared to my US bank.
Actually, just check screenshots in the App Store for foreign non-Western banks.
Is that what you were getting at?
INTERAC is like the beta version of Pix (which is basically the same as the Indian system in the article).
Pix works via email, CPF (a person's "SIN" number, which isn't secret in Brazil), randomly generated key, telephone number, QR codes. INTERAC is mostly email.
Pix works immediately. Some transactions take 1 second or less to credit on the other bank (you can see that when you are trying to send money to yourself, when the destination bank gives you a notification that it received the money before the UI of the sending bank has even acknowledged that the operation is completed). INTERAC sometime takes several minutes, up to 30 minutes sometimes in my experience.
Personally I think INTERAC is about 70% of the way there, but I would chose PIX every time simply because it seems like a much better iteration.
With Pix, you get credited and debited immediately. With INTERAC, I've noticed that sometimes you can be debited immediately and the credit takes longer, and vice versa. Sometimes for several minutes, your money can "double" (appear in second account without disappearing from the first one) or "disappear" (leave the first account but not get credited on the second one).
This last point might not seem like much, but it gets in the way of using for a lot of things that would need to be immediate (paying for a Taxi, or a supermarket purchase). Since Pix is instantaneous, it is used heavily for those kind of payments where you don't want to wait.
Straight out of the "NEVER EVER do that" playbook.
Is there a reason to not configure it this way? I've always set things up this way, with the three banks I deal with, and can't think of any obvious ways I could get burned or fooled.
(Work at a FinTech integrating with FedNow, exciting stuff imho)
Brazil has a lot of negatives, but I always find amusing that we managed to have a bank system that is light years ahead of the US.
That's why newer banks without legacy cruft, without a large customer base, can implement better stuff: for instance, Capital One entered retail banking in 2005, so they are better at some stuff.
1) You kinda need everybody on board. The biggest banks in the US have something like 5% market share, so it's not just 3 companies you need to get on the same page. This probably means it needs to be mandated from above. Any 1 bank could probably throw together an easy account-to-account transfer for other customers at the same bank without too much trouble, but inter-bank? Yikes.
2) 90% of the institutions are slow and conservative. Even if they agree this is a good idea, it's a couple years of meetings and gathering requirements, then a couple more to implement.
3) You can either have instant transfers or you can have reversibility, you can't really have both. People want the first...until they (desperately) want the second. This becomes a support nightmare for banks. Now, you limit this if you have really good security (password requirements, 2FA, transaction limits, recipient verification, risk analysis)...but all that needs to be in place first, so we're back at point 2.
But it's not intended for business payments like Stripe or PayPal, or Venmo for business.
> Let’s say you lost your debit card or PIN or either was stolen. If you notify your bank or credit union within two business days of discovering the loss or theft of the card, the bank or credit union can’t hold you responsible for more than the amount of any unauthorized transactions or $50, whichever is less.
> If an unauthorized transaction appears on your statement, but you did not lose your card, security code, or PIN or had any of them stolen, you should still notify your bank or credit union right away. At the latest, you must notify your bank within 60 days after your bank or credit union sends your statement showing the unauthorized transaction. If you wait longer, you could have to pay the full amount of any transactions that occurred after the 60-day period and before you notify your bank. In order to hold you responsible for those transactions, your bank would have to show that if you notified them before the end of the 60-day period, the transactions would not have occurred.
Roughly speaking, you can only be held accountable for withdrawals, transactions, and transfers from your account that you actually authorized. Any other cash transaction is fraud, and will result in you getting your money back. This is why banks are careful not to allow transactions that they suspect to be fraudulent.
https://www.consumerfinance.gov/ask-cfpb/how-do-i-get-my-mon...
https://www.consumerfinance.gov/rules-policy/regulations/100...
https://www.zellepay.com/financial-education/pay-it-safe/und...
That's how zelle works as well, with the exception that it's probably not built into every banking app, considering the number of US banks.
US is way behind.
Like over a decade behind.
FedNow is native real time messaging plumbing, so all deposit accounts can support it once you plug into FedNow (which is run at cost by the Fed). We should theoretically arrive at an experience similar to UPI, PIX, and other instant payment systems where you can use phone numbers, email, or QR codes to facilitate payments over the next 1-3 years.
Payments in Asia and other developed countries are instant - bank to bank. No crappy 3rd party app.
In the banks' defense, they have to work with absolutely archaic infrastructure like ACH, so maybe once the considerably-improved FedNow takes over they'll have a better shot at building something people actually want.
https://en.wikipedia.org/wiki/Merchant_Customer_Exchange
ClearXChange was started by the big banks, before CurrentC, and that turned into Zelle.
1. When I pay with a credit card, I haven't actually spent any money. That money is still in my bank account, and I have the chance to dispute the transaction if it's fraudulent, without putting my own money on the line first. I've heard a few horror stories where a merchant/service has mis-charged a debit card or ACH transfer, and the time it took to get the money back caused stress around things like making rent payments. It frankly doesn't matter to me how common or uncommon such a thing is; it's literally impossible when paying for a credit card. (Yes, I do have to trust that the credit card issuer themselves won't make an error when debiting my bank account when the bill is due, but I prefer only having to trust one party not to make mistakes, than some larger number.)
2. While everyone is of course paying for this through higher prices in stores, I'm reasonably savvy about using credit cards that give me cash back or rewards points or something, and tailoring what card I use to benefit a particular transaction (for example, one card might give 3% back on grocery purchases, while another might give me 3x points on travel expenses). Ultimately I end up paying a bit less for everything than if I were to use cash or a debit card (or a bank transfer). Certainly some merchants have credit card surcharges, or discounts for paying cash/debit, but I find that those are a tiny percentage of my transactions, and I can always use cash or debit in those instances. It's hard to say how much (if at all) prices would actually be lower if credit cards (and their associated fees) didn't exist; handling cash isn't free either for businesses (counting/reconciliation, storage areas, security for transport to a bank, etc.).
The main issue with our useless bank-transfer payments system is person-to-person payments. But these days, with Venmo, Cash App, and Zelle, that issue rarely comes up (and all of these are free for the sender if you use bank debit rather than a credit card). I can't remember the last time I had to give money to a friend that involved using cash. The big downside of all of these (similar to cash, I guess) is that there's very little fraud protection. If you send someone money, and they screw you over, you might not have much recourse.
I very much consider our banking system backwards in many ways, but I find our payments system to be just fine, and, in some ways, quite good. And our banking system is backwards in part due to lack of demand.
Zelle is trying to solve it, but not widely accepted and is not even at scale what India has done with UPI. Direct Bank transfers take seconds not days.
Also we get OTP verification for every transaction, it's mandatory. People can't just randomly charge someone just because they know their A/C and routing. We do have credit cards too, but for it, one needs a good standing too, it's a privilege not a feature.
And Debt is bad for many people, who can't manage it.
And finally we don't have to depend on some 3rd party company(I've read enough PayPal, cash app horror stories). We have a default system between banks that just works, to make transactions instantly,secured and authorized.
I’ve no problem moving money wherever I want, quickly, whether to a business or another person.
Europe's SEPA or International SWIFT are archeic compared to these networks. Even using Bank-Exchange-Crypto-Exchange-Bank transfers can be considered better UX
One thing that I don't often see mentioned are invoices. In Finland you can get many of them delivered as standardized e-invoice to your bank. This then allows you to setup automatic payment for them on your side (pay on the due date, set maximum value that will be approved automatically if the amount is not static). For consumer protection if the due date falls on weekend/bank holiday, the due date in reality is the first normal day. It's also the day when you need to make the payment, it doesn't need to arrive on seller's account on that date (though these days it normally will).
Do we really want every payment we make in database where it can be passed around and used to analyze, market, and persecute us?
I was a big fan of MobileCoin the privacy token in Signal because as far is I can tell it’s the best solution out there. They have gotten much traction largely because the feds and banks haven’t let them, however I hope some day some how I can buy groceries without my location and purchase details being sold to every data broker in the world.
Nothing about which type of payment system you use can possibly help with this— doesn't matter if it's cash, credit card, crypto, or something else— because regardless of how you choose to pay, the grocery store knows which items you bought and where, and (laws permitting) can sell that data to whomever they want. And the credit card companies already don't have that data: they just see a single dollar amount, not an itemized receipt.
All local online retailers, investment brokers, etc, support bank transfers, with some[1] even providing discounts for paying via bank transfer instead of credit card. I've even paid this way at a brick and mortar place that didn't have a card machine.
SA bank transfers, like non-US bank transfers, are newer, cheaper and faster than their US counterparts, but aren’t fundamentally different in the mechanics and the edge cases. More in the regulations and market forces on banks.
That’s not to say they aren’t good! They certainly are in comparison to US bank transfers. But UPI does compare closer to sci fi.
This works in the US just fine as well, although you probably need to go to a bank to do it.
I've also been given the option to pay plenty of bills through bank transfers but usually choose not to if I can use my credit card for the same price.
Venmo and the like exist because that's not "fine". If you have the same bank, there's a good chance you can do it online, or with some crappy third party app. If you have different banks, there's a very slim chance they use the same crappy third party app, leaving you driving in person to initiate a digital transaction that usually takes between a few days to a week to clear.
[0] Source: worked for African Bank for a bit, years ago
This piece mentions FedNow, an instantaneous 24/7 bank transfer system for the US, whose launch happens to be imminent. Details:
https://www.clevelandfed.org/collections/speeches/2023/sp-20...
However, unlike UPI in India, neither banks nor businesses are required to support FedNow, so adoption will likely be slow, especially because the traditional (and more expensive) credit card based payment system is already firmly established.
There is also another upcoming system called RTP, which is very similar to FedNow, but is governed not by the Fed, but privately by the The Clearing House, an association of large US banks. The piece above mentions that both implement ISO 20022, which could allow future interoperability.
And reading this, seems like it really ain't. Interesting that crypto hasn't made inroads here. I mostly get why, incumbents don't like change, but still.
Or most likely, poor KYC/Fraud controls, lack of a central counterparty clearing house, limited performance, terrible UX...
A funny thing happened, 10 years ago crypto transfers were free, and bank transfers cost $15 or more.
Today the opposite is true, many bank transfers are free, but sending crypto costs about $10.
Also, as the article points out, international transfers are still painful. Paying $10 to transfer money internationally is probably still a very good deal for most people.
> You can send USDC on Arbitrum (an Ethereum L2) for <$0.10, or Polygon for <$0.01.
The vast majority of Americans reading that would have no idea what any of that means, or even how to figure out what it means. There are too many choices and too much jargon in the cryptocurrency world, and it takes real work and effort to figure it out. And then you have to have confidence that you understand it well enough so you don't make a mistake and send your money someplace you didn't intend. That's a real concern for many people, especially those who aren't all that tech-savvy. All those people will likely just rely on something like Western Union, even though it's annoying and they could theoretically have less friction with cryptocurrencies, at least after they've learned everything and set it up properly.
You're absolute right and over time, that is changing.
When I got onto the internet in 1991, I got an email address and couldn't for the life of me understand what good it would be for. I didn't know anyone else with one!
https://www.circle.com/hubfs/USDCAttestationReports/2023/202...
You're already getting roasted for this, but the larger picture / issue is that many people have this outdated view.
The technology has moved so fast, in just a few years that it is hard for everyone, even such a technical group as HN, to keep up.
LN is just not a thing.
Beyond that, paying with a cryptocurrency requires extra technical effort that many people don't have or don't want to deal with. Using an exchange to switch between fiat and cryptocurrency is an extra step that adds friction (and many of these exchanges end up embroiled in scandal and/or get shut down, making it hard for people to trust the extant players). And the sheer number of choices of what coin to use also muddies the waters for many people. Bitcoin is obviously well known, but transactions are slow (or are on a lightning network, which requires understanding more concepts and jargon) and expensive.
Then there's volatility: Bitcoin lost nearly 3% of its value (against USD) today. I certainly wouldn't trust that to keep money in as a stable store, like a checking or savings account analogue. Sure, you can go for things like USDC (and you probably should!), but the concept of a stablecoin is another concept to learn, and then you have to figure out how to get them and transact with them. A quick web search for "pay with USDC" shows quite a few options, and your average person isn't going to know what to do there.
Also consider that this article was about bank transfers, and bank transfers alone. In the US, for example, we get around the annoyance of bank transfers with credit and debit cards, and payment apps like Zelle, Venmo, and Cash App. Ultimately there's very little actual need for cryptocurrencies.
Certainly one big area is international transfers, but most people (in the US, at least) either don't need to do them at all, or have other options. For payments to many non-US merchants, I can still use my US-issued credit card. International person-to-person payments are the main pain point, and I expect some people do use cryptocurrencies for this. Others stick with the older-school methods like Western Union.
When traveling internationally, I used to withdraw local currency (using my US-bank-issued debit card) at the destination airport, and then mostly pay with cash. These days I find that most places I travel will accept US credit cards in many places, so I essentially pay the same way I pay at home, while being sure to use a card that doesn't impose foreign transaction fees. Certainly there are countries where US credit cards aren't all that useful, but I think the point is that those places are likely a minority when it comes to where most Americans might travel, not to mention that most Americans rarely or never leave the US in the first place -- many don't even have passports!
No cost, no need of IBAN, SEPA, or any other information. Just a phone number, that might be in your contact list or not, the desired amount, and is done.
Some business use it too but of course, its application is very limited due to not charging a fee to end users.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
Nevertheless, thanks for your addition!
Edit: I just noticed the site has been renamed, so some prior submissions are under https://news.ycombinator.com/from?site=kalzumeus.com
The Branch Banking Model
https://bam.kalzumeus.com/archive/branch-banking/
https://news.ycombinator.com/item?id=32679233
^ I no longer despise local bank branches, it's a tough business.
Money Laundering and AML Compliance"
https://www.bitsaboutmoney.com/archive/money-laundering-and-...
Bank transfers as a payment method - https://news.ycombinator.com/item?id=29357215 - Nov 2021 (323 comments)
I use it to pay for anything from 10 cents to 1500 USD.
Its awesome, free and has enabled a banking revolution in India.
Small vendors now prefer UPI to cash, as small change is a hassle.
In India, even beggars are using it.
An average Chai (Tea) costs about 30 cents.
A Samosa costs about 15 cents
Most street foods cost under 50 cents.
Water bottles cost about 35 cents.
I strongly believe that every government should provide this sort of inter-bank and intra-bank transaction services as a public utility, for free.
The benefits of UPI cannot be overstated.
We also have UPI lite now. We can add about 20 USD to a UPI Lite account. Maximum transaction value is 2 USD. Daily transaction limit is 20 USD and the advantage of UPI Lite is that once you load your account with the money, the transaction completed without bank intervention, meaning lower chance of failure. Also, it does not need authentication (apart from your phone security).
I have been using this only recently and its an even more hassle free method of paying for almost 95% of my daily spends. Now I don't have to enter the UPI PIN to authorize a transaction.
Its a great way to give pocket money to kids.
On top of that, I get cash back and other benefits/rewards from using a credit card (like extended warranties and insurance on the things I purchase). Yes, these things make purchase prices go up for everyone, but if you don't play the "game", you're leaving money on the table.
Most merchants do not pass credit card fees on to card-using customers (so you don't save by using debit or cash), though that practice has increased over time. Certainly if/when that becomes the norm, I'll have to decide if the benefits of using a credit card are worth the cost.
Really? In what cases can an average credit card user challenge a payment that has not already occurred?
If there is a fraud usually it is quick to get money back if debit cards were used.
When you go to file a fraud claim the bank must provide a provisional credit for the amount of the transaction but they may reverse this if they decide it was not fraud. It depends on what state you're in, if you used a branded (Visa/MC) debit card, the bank, the representative's interpretation of all the applicable rules, your prior chargeback history, etc.
https://www.consumerfinance.gov/rules-policy/regulations/100...
With credit cards the legal maximum is $50. And the fraudulent transactions are drawn on a line of credit (soft money) not the contents of your bank account (hard money). The United States has a powerful oligopoly of payment network operators who lobby to maintain high interchange revenue. This de facto shifts the cost of credit cards onto those who don't have them. Instead of annual membership fees for the actual users, merchants pay about 2% of card transaction volume instead of 0.3% in the EU.
I claimed the cost of the ticket back from the credit card company. Recovering money from the bankrupt festival is then their problem.
And if I have a dispute with a business, I can have the credit card company reverse the charge for me? If it's debit, that money is gone.
I would never use debit if I could use a credit card. The US system is far superior for consumers.
Consumers are also forced to pay for it, though. The transaction fee in the US is routinely 2-3%, while in the EU it's capped at 0.3%. Because of borderline anti-competitive behaviour from VISA and Mastercard, that fee is also not charged separately to creditcard-using consumers but integrated in the price, so everyone pays for it.
I think that's the same for credit cards in most of Europe. (They exist even if they aren't popular.)