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Comment by daft_pink | Hacker News Reader

Until they protect us from fraud like credit cards, I’m not interested as the banks transfer all the risk to the user on these products. Why anyone would use a debit card in the United States is beyond me.

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I think you misunderstand the whole concept of P2P payment apps - it’s meant to be digital cash and replace physical money.

Credit cards can afford to protect you from fraud because of the high level of trust between companies and the point of sales - too many fraudulent purchases and they stop accepting the transactions. Not to mention the fees they charge to both the purchasers and sellers!

If you get scammed with a debit card, cash, or a P2P app, that’s a matter for small claims courts, and if you’re lucky, maybe the police will charge them with a crime. But the risk is on the individual, and that’s a feature, not a bug.

Do you generally carry up to $500k in cash with you every day? A level that most corporations would consider high enough to use an armed guard with an armored car?

This is exactly my point. The bank gives you a login. Claims the design of the product is your responsibility for everything and you have to protect your login and then washes their hands of any responsibility.

Why anyone would use a debit card in the United States is beyond me.

Why would anyone use Venmo with even less protection? But millions of people do.

Huh? Venmo (since being bought by PayPal) has the strongest fraud protections that exist. It's why online P2P marketplaces have huge banners saying "If they don't accept Venmo or PayPal G&S it's a scammer."

Venmo/PayPal are unique in that they'll insure an informal purchase agreement between two people neither of which have a merchant agreement with them.

I've heard so many stories of people sending money by P2P in Venmo and having pretty much zero recourse. There's fraud protection for merchant accounts but sending cash P2P between normal user accounts there's pretty much no protections.

Read up all the stories of people sending money to the wrong Venmo user and support not being any help about it.

Venmo is excellent in detecting fraudsters - people in business stealing money.

However if you make a mistake and send money to a user which is some random house keeper or baby sitter then oh well…

Venmo/PayPal are unique in that they'll insure an informal purchase agreement between two people neither of which have a merchant agreement with them.

Would you care to test this? Venmo someone you know $50 and then try to reverse it without their consent. Let me know how it goes.

Venmo makes it incredibly easy to send money to the wrong user tag.

If I have the bare minimum of messages between the two of us establishing that I'm buying something from them, what the price is, and I hit the "Turn on For Purchases" button then I will absolutely get my money back. Have done it multiple times.

I'm not sure how you took "will protect a purchase agreement" to "will protect a random unspecified transfer."

That’s not why those marketplaces say so. Those marketplaces state that because it deters the lowest effort scammers (pretending to offer cash, paying through gift cards, etc). It says nothing about how good Venmo/PayPal is at handling fraud or detecting it.

Sure it does, I've even been the victim of scammers when buying festival tickets. I paid with PayPal G&S, the scammer deleted all their messages with me, obviously didn't send tickets. It took 15 minutes with support and I got my money back, no harm no foul.

Because of this all the scammers pretend to only have Zelle.

I think you'll have to log into your bank account to send money - it won't be taken by the receiver. Every other country has this. And the recipient has clear identification, so if there's a dispute, you go to the police and say they stole your money. Since the recipient is known and in the same jurisdiction, the transaction is reversible by the courts.

I've been asking for years when this sentiment pops up, and I'm going to ask again: What specific examples are there of debit card users holding all of the risk in the US?

It isn't legislated as it is with credit cards, but I've so far been unable to find any instances that don't have a contractual resolution process for fraudulent charges.

I was in Brazil once, atm skimmed my card and 100% of money in the account was withdrawn.

There was a resolution process, and it was great. Bank refunded 100% of the money….after 2-3 months.

I was extremely happy all things considered but you simply don’t have that risk profile with credit cards.

(I had used an official atm inside a mall with armed guards and cameras, which Brazilians and guides recommended. After the incident I instead used the atm inside a bank, past their bulletproof glass and metal detected security, guarded by a guard with a machine gun. No skimming there.)

I've had a few friends get hit with massive fraud on their debit cards. Completely wiping them out cash-wise. They didn't have any credit cards either, because hey credit cards are evil and a trap.

It left them with absolutely nothing for weeks while the bank sorted it out. They couldn't make rent. They couldn't buy groceries. They couldn't put gas in their car. Sure, the vast majority of the charges were considered fraudulent (not all) so they mostly got their money back, but it was a rough few weeks for them. I've seen that played out three times so far.

Meanwhile there's been fraud on my wife's credit card a few times over the years. Zero impact to my daily life, because 1) generally the credit limits I have are far higher than the cash I'd normally keep in a checking account and 2) I could still fall back on the cash and other credit cards I had.

Also, IIRC, every time I disputed those transactions I think it instantly released that credit hold on my account, so I had that credit back right away.

Even dealing with point of sale and customer support issues becomes a lot easier when they know you're a few taps on your phone away from reversing a transaction. Make it clear that it's something you're very comfortable with, routine even, not a bother at all, and almost like you're doing them a favor by handling it on your end. They won't see it that way, of course, but it gives you all the leverage in the negotiation without it getting ugly.

Try it next time someone says their point of sale policy only lets them offer you store credit or an exchange. Say, oh that's fine, my credit card lets me reverse the transaction if I couldn't resolve the matter with the store, so I'll just do that. The very next response will be a miraculous change in the store's policy.

Just want to add in addition to what other users have said that the window on fraud discovery is generally much narrower on your bank account than with a credit card. You get 90 days with a credit card generally, but bank account transactions are generally 30 days or less, or even smaller for corporate accounts on some transactions.

This is actually worse than a debit card because in the case of unauthorized transactions your bank can reverse the charge.

But it is better than "linking your bank" or wire transfers because FedNow has a request / fulfill flow instead of "give us access to take an unspecified amount from your bank."

Debit cards have same chargeback options as credit cards.

Do they? With a credit card, the impact of a fraudulent charge is I click "dispute charge", and my credit limit is effectively lowered by the amount of the fraudulent charge. If the dispute is resolved in my favor, great. If not, I eventually have to pay it off.

It's my understanding that with a debit card, even if you dispute the charge, the money is still gone until the dispute is resolved. Is that not true? If so, that's quite a big difference. I suppose it's the "same", but there's a big practical difference between "my money is gone" and "my credit limit is reduced."

Actually, there is a law in the United States that says the lender is responsible and the loan is essentially invalid if the underlying purchase is based on fraud. Any protection you receive from a debit card transaction is essentially at the mercy of whatever the bank chooses to do and some banks claim you are protected and most don't, but it doesn't have the force of federal law the way it does with a credit card.

"Why anyone would use a debit card in the United States is beyond me"

I don't think you understand the law. If you have fraudulent debit card purchases and you haven't lost your debit card, you have 60 days to report them with 0 liability.

Summary: https://www.nerdwallet.com/article/credit-cards/credit-card-...

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