Comment by Freak_NL | Hacker News Reader

Comment by Freak_NL | Hacker News Reader

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> and many only support iDEAL

Actually, look closer when you pay using Ideal (as we all do). You will notice that usually there are several payment methods, and these almost always include credit cards.

The reason for this is not because the Dutch like to pay using credit cards (most Dutch never use one), but because of a little known law regarding online stores. It is, in fact, not allowed to only offer payment options that require the customer to pay the full amount upfront. And Ideal (and Wero) do just that: you order a T-shirt for €20, you pay €20 upfront, the shirt gets shipped, and you receive it.

Now have a look at this note:

https://www.acm.nl/nl/verkoop-aan-consumenten/de-koop-sluite...

> U mag maximaal 50% vooruitbetaling vragen voor producten die u nog moet leveren.

> Dit betekent dat u standaard mag aanbieden om het hele bedrag te betalen. Maar u geeft klanten ook de mogelijkheid om minimaal 50% pas na levering te betalen.

There are almost no online stores which offer this of course. It's just not part of this commercial model. Not for a T-shirt (or whatever).

So what is the trick the government itself even recommends?

Credit cards.

https://ondernemersplein.overheid.nl/geldzaken-en-belastinge...

Something about the way credit card payments reserve payments initially and the way credit cards offer consumer protection services makes this a payment option which, apparently, fulfils this 50% after delivery rule…

To be honest I like the idea of forcing merchants to accept credit cards in addition to this.

Regardless of how much I like the idea of a payments layer without Visa/Mastercard fees, I think the rich engineers of hackernews and 10,000 overpaid consultants who worked on this massively underestimate how valuable an interest-free 30 day bridge loan is to average people (and businesses) on monthly payroll.

Combine this with the consumer protections and threat of a dispute (which almost always sides with the buyer) and it generally tilts power to the consumer in most credit card transactions, if the consumer has autopay setup (huge caveat of course).

This new layer is totally neutral, and removes the detriment to the merchant in terms of fees/risk, but not sure it’s actually as good for the market as claimed here. For me it’s a net loss, and harming consumers ultimately harms the merchant in terms of willingness to buy things. If it becomes trendy for merchants to start refusing credit cards to use this instead, I will be WAY less likely to take a risk on a purchase I’m not 100% confident about.

Im not willing to try new products from most startups for example if I can’t buy on a credit card.

This applies more to the USA than to Europe, where "credit cards" are in fact mostly debit cards (cursory research says 71% vs 26% in America), and ordinary people tend not to be up to their necks in consumer debt. Anecdotally, I've never used an actual credit card in my life.

Data from the IMF says European households hold a similar level of debt if not more (especially the case in northern Europe):

https://en.wikipedia.org/wiki/List_of_countries_by_household...

The US used to be an outlier in this regard if you look back to 2000, but over the past 25+ years American households have stayed pretty much the same while their European counterparts have grown debt substantially.

It is almost entirely mortgage debt backed by the collateral of housing.

Not the most productive asset to be leveraging, especially in rapidly declining birth rate countries, no?

Meanwhile, while headline credit card interest rates in the US look insane (like 20%+), in reality loss-adjusted yield actually realized by lenders and paid by consumers (after renegotiated settlements, bankruptcies, payment plans, etc) is less than half that.

You can look at the realized return on personal credit lending on companies balance sheets, its basically like 3.7%. Maybe a few percent more return than what a 30 year mortgage lender can expect going forward (now that we're returning to post-GFC 'normalized' interest rates).

Over 10% of interest is still a lot... And the fact that you get to that rate through settlements and bankruptcies is a good indicator of how much of a stranglehold debt has over a typical American household.

And it's fine if you don't think a home is a bad investment. I think most people do and so far that has worked out almost perfectly. That doesn't mean anything for the future, but there are no guarantees in investing. In a lot of places a mortgage gets you tax breaks too, as opposed to other credit.

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