Hacker News Reader

Comment by aleph_minus_one | Hacker News Reader

> The article and none of the comments mention rewards yet, which are the biggest reason to use cards!

In my observation being that much incentivized by the reward system seems to be a very US-American thing. In Germany, I have never heard anybody seriously talking about that they love the reward system of their credit card. I would claim that at most some (but I think rather few) people in Germany consider some very specific reward that their credit card has as a slight convenience - but nothing more.

View on HN

Credit card financial protections for Americans are one of the most strongly pro-customer sets of laws we have in the US. The rewards are a nice way to get some of your money back, but you really can’t be cleaned out by fraud on actual credit cards (not debit cards using the MC/Visa logo and payment system). “That is an unauthorized charge, please cancel the card” is perfectly acceptable. In theory you are on the hook for the first $50, but in practice almost no bank holds you to that.

The consumer essentially can’t be accused of not exercising due caution unless you have ignored at least one bill with fraudulent charges. This is real value, so once you’ve bought into the system, getting the rewards is a major incentive to choose one card over another.

Yep. I exclusively pay via credit card for this reason alone. (I have my autopay set to pay down the entire balance each month)

Rewards are nice, but not the primary reason I use a credit card.

And to further this point: PayPal tries to position itself as "another flavor" of credit, but has none of these protections.

In fact, PayPal binds you to their in-house mediation of fraud claims. I was required to ship $60 worth of merchandise back to the fraudster in China to receive a refund, but the cheapest shipping available to me was $50.

This point - that EMV cards have the effect of siphoning money out of many countries to the USA in payment processing fees - is one of the primary motivations behind the development of Wero[1]. For those that haven't come across it yet, it's a new payments system based on 'instant' SEPA wire transfers. It is starting to gain ground now, particularly in Germany and the Benelux. I'm not aware of any smartcard-based implementations yet, though - currently it functions more like WeChat typically does, where you need to authorize the transaction on a smartphone.

[1]: https://wero-wallet.eu/

> This point - that EMV cards have the effect of siphoning money out of many countries to the USA in payment processing fees...

Money isn't sent to the USA. It is sent to the banks that own your particular credit card. Many of these are certainly in the USA, but your statement makes it sound somehow patriotic/anti-USA to avoid using credit cards.

There is a component that is directly paid to the card schemes such as MasterCard and VISA. See this page from Barclays[1], for example:

> Interchange: the fee we pay to the card issuer, i.e. your customers’ banks > Scheme fee: the fees we pay to the schemes, i.e. Visa or Mastercard

> Visa Consumer Debit > Interchange fees 0.1% to 0.2% or 0.02€ > Scheme fees 0.0082€ + 0.11% to 0.312%

Obviously all the large payment card schemes have investors and subsidiary legal entities all around the world, and not all of the card schemes are from the USA. However I think it's fairly clear that at least 1/1000th of total card transactions everywhere in the world ends up flowing into the USA eventually, and that's without accounting for licensing and accreditation fees for the technology underpinning the system, also mainly from the USA.

I'm not surprised that European politicians would like to get hold of that money for domestic purposes by promoting Wero, and no doubt if political/propaganda gains can be made by presenting this as patriotic, at least some will try.

[1]: https://www.barclaycard.co.uk/content/dam/barclaycard/docume...

That’s because most countries cap merchant fees so credit card companies can’t offer as lucrative awards

Credit card companies aren't aching to give more money to customers, but unfortunately can't because of mean old countries.

A credit card company is not going to loose money on each transaction.

Reply on news.ycombinator.com