In EU most people use direct debit. The term "credit card" is almost synonymous with debit. Chargebacks theoretically exists but they are more complicated, I don't know anyone who ever did that.
I do have to say though, that with customer protection laws we have it has never happened to hear about a friend getting a charge back from the bank, usually you go to the seller first (or the platform if you got scammed) and you get refunded there
At least here I see online that there's the possibility to do so (even with debt cards). However, I guess that with a credit card it is going to be less annoying for you, or any way easier for you, since it's their money on the table and not yours
I'm talking about italy btw
Edit I also think that prepaid cards here are what have less protection
I have some Irish friends. And Ireland seems similar to the US when it comes to credit card usage (vs debit). I assume that is because Ireland is heavily influenced by US and UK banking habits. On other hand, Germans only use debit cards.
I checked the stats, and about 40% of purchases in Ireland are made by credit card. In the US, it is around 70%.
That's definitely not the case. Many people would have credit cards, but there's a lot less incentive to actually use them than there is in the US, because the interchange (paid ultimately by the merchant) is capped at 0.3% in the EU (whereas in the US it can be upward of 3% on high-end cards). The interchange pays for the 'reward' schemes that US card issuers provide, largely. Without those, why bother?
I've a credit card, but I essentially never use it, except when visiting the US (where some vendors actually refuse debit cards, or at least used to).
Peace of mind (that your checking account is not drained)?
- someone steals your card and PIN
- the merchant turns out to be dishonest (or some misunderstanding) and you want you money back
- you fall for fraud
- the merchant mistakenly charges you, causing an overdraft on your checking account
In the US you'll almost always get your money back if someone defrauds your debit card but you could be in for a painful time if you depend on the money in that checking account until it gets fixed.
Apple and Google Pay are just as (if not more) secure anyway for the majority of transactions, and a long tail of US restaurants, hotels, corporate card issuers, rental car agencies etc. will simply never change their legacy flows. There are just too many incumbent stakeholders.
Even if fraud victims get their money back, firstly it must be an admin headache and then merchants have to cover fraud losses/insurance costs and thus mark up all their prices to make sure they do, so everyone is subsidising the fraudsters.
I presume it’s lobbying that would/does thwart any attempts at any such regulation.
As someone outside of the US I would like to be able to largely ignore this problem as just affecting people over there, but unfortunately it spills into the rest of the world.
When I last had fraud on my card it was through an online US merchant, because, like most US online merchants, they don’t use 3D secure. If they did then blocking the transaction for me would have been as simple as pressing the “it’s fraud” option when my phone would have received a “do you want to allow this transaction of $X for Y in the US?” that my bank’s 3D secure system normally sends to me.
Hopefully Apple and Google Pay will eventually help things over there.
These reduce the level of fraud, and the banks cover the rest.
The basic stuff (online shop not delivering, going bankrupt etc) are covered for debit cards in a similar way as credit cards in other countries.
I've never had a fraudulent transaction myself, and it's over 20 years since I first had a debit card — with a chip and PIN.
Single account sounds more like a boomer thing.
Chargeback always seemed strange to me and never needed it. Fraud should be reported and handled at the root, not by making digital transfers into some magic disappearing money.
But I did have someone fraudulently making direct debit transfers from my bank account. My bank cleaned that up within three business days
It's not much of an issue within the EU area. The banks tend to offer insurance products for people who want to cover that risk.
I haven't ever seen illegitimate direct debit. I guess you need to have an actual business to issue direct debit orders and bank will show you the door and freeze your money if you start doing funny things. I guess.
Probably the dreadful R word has something to do with it, go figure.
On cards we also have limits and the only time I saw something happening was after being unfortunate enough to pass through ~~the ghet~~ the glorious capital of our continental Empire, majestic city of Brussels. That time the bank tried their best to call me.
You are guessing right. To receive direct debit transactions, your bank typically forces you into an insurance contract to cover disputed transactions, plus they block a minimum balance on your account, plus they require some overview of your company assets, in case the former two measures aren't enough. No chance to get direct debit approved as a private person or small company. And the amounts you can receive, as well as the number of transactions will be limited to your insurance coverage. And if there are more than a very small number of disputes, you are done.
Which is why for small businesses, direct debit is only viable through some intermediary, if at all.
Online the same, you just use your card details like a credit card, the payment system is the same for years now anyway - thats the whole point of initiatives like this digital euro and Wero!
As a side note, in some countries, it is actually possible to initiate a direct debit at the POS (since cards sometimes contain enough information to recover the IBAN, mostly for historical reasons), but this has significant risks for the merchant and is usually not worth the hassle as debit card fees are very low anyway.
The Digital Euro does not exist yet, and Wero is yet another scheme (settling via SEPA instant credit transfers, I believe, but that's more of an implementation detail and doesn't change the fact that it is its own scheme with its own rules).
I use a German bankcard and it will cost less to the merchant, that is the reason credit card were refused for such a long time. Covid broke this, as contactless was preferred and bankcard were not available for payment on smartphones at the time.
In shops the main issue is that the terminal they use can only read Apple Pay credit cards. If you’re using you’re banking app to pay wirelessly, it may fail to work with some merchants.
It’s not that they don’t want to accept it, the physical card would probably work (I don’t physical cards anymore), but the system is rigged to favor credit cards it seems.
Maybe it’s specific to Germany, France
Sounds like the digital euro might also have been designed to help with these issues ?
Which country is your card from? Many countries used to have their own weird debit card schemes, which often worked... erratically online. This is now rare, and even where it persists (eg Germany, with girocard), cards tend to be dual branded.