Hacker News Reader

Comment by mentalgear | Hacker News Reader

Would be nice of the EU to provide a digital payment service quasi free of charge - without commercial provider's typical predatory fees and other costs. And don't counter with "privacy" .. it's not like all the American companies already have to provide backend access to their data to the NSA and other 3 letter agencies.

View on HN

The problem with these is always who pays for fraud.

With credit cards, they actually claw that money back from the merchant, and then if the merchant can't pay they just eat it themselves.

So the merchant has to work in fraud rates into their pricing, and the credit card company has to work in fraud rates that the merchant can't cover into their rates.

It always seemed toxic it to me that the merchants are the one's responsible, despite the fact that they easily have the least power to do anything about it. But the ease of payment processing, and the number of people who just won't buy it if they can't use a card, outweighs dealing with fraud I guess.

In theory merchants can notice some fraud signs so shifting fraud losses onto them gives an incentive to take action on those signs. In practice banks have a better overall view of fraud and this is just externalizing bank fraud losses onto stores.

Given that visa and mastercard just dump the liability on the merchant, The EU could hardly do worse.

It would be an economic boon to the bloc if they assumed more of the risk.

> The problem with these is always who pays for fraud.

I'm curious how India's UPI handles fraud/refunds, as the system seems to have garnered near-universal praise.

India’s UPI is national service so fraud is “relatively easy” to combat but it depends on banks’ responsiveness.

However, i heard from my Indian friends is that UPI fraud is on the raise and becoming a big challenge.

Edit: UPI fraud rate is similar to CC fraud rate but only about ~6 % of the money lost to UPI fraud has been recovered. If this trend continues (fraud pct continues to grow and recovery rate does not improve) UPI system might get into trouble.

Btw, the stats say that the UPI fraud rate is doubling every year for past few years.

Could you describe what is the "fraud" you are talking about ?

Like, if someone stole a credit card and use it to buy stuff ?

Yes, that's considered the merchant's fault by the credit card companies.

It does cost money to run the network. They already capped the fee at 0.2% which is pretty reasonable.

Wero, the system the article is about, already is free for personal transfers and 0,15€ for commercial acounts (at least for my bank)

Uhm, the EU already has free instant SEPA transfers? I use it regularly, sadly not all EU banks support it (smaller ones sometimes have issues and have to resort to standard oldschool 2-day transfer, but they are also free).

How do you do your groceries with that?

With debit cards or cash like everyone else?

Then instant bank transfers didn't really help you with this use case, did they?

True, thanks for reminding me that this is about CC replacements :)

But I honestly don't know many people with a CC here, and those who do (myself included), we don't have the same advantages/disadvantages of a CC: no points, no "free" miles, no interest and no possibility to rack up debt like in the US since Visa automatically deducts the full amount from my bank account at the end of the monthly billing period.

The Eurozone has free instant SEPA transfers*

Non-Euro countries won't be guaranteed to have it until July 2027.

It does but there aren't really any SEPA transfer point of sales. It's too asynchronous. You always use card or cash there. SEPA transfer can sometimes be used when paying for things asynchronously online, and they won't ship the item until they receive the money.

SEPA instant transfers aren't guaranteed instant as they might still be withheld for fraud checks.

They will, and with privacy guarantees. But all liability will be on the consumer, and none in the merchant or the banks.

Reply on news.ycombinator.com