Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
Can't we have cards for this? In Spain, for example, to use Bizum, you need either an Android/iOS smartphone (and for the Android case, as you use it from your bank's app, it would typically require some Google security assurances - so no Huawei phones allowed, for example) or logging into your bank's website and use Bizum from there, only if your bank allows you to use Bizum via web. And it's not very practical or convenient to do that when you're in a store and want to pay, in contrast to swiping your credit card.
So while I see very convenient gaining some sovereignty from American companies for these payments, I think we're losing it when we will need devices controlled by other American companies in order to use the new system.
This is really a human right issue. No one should be required to carry an attacker-controlled tracking device, especially not for interacting with the government. It's funny that the EU uses all this mobile attestation BS more than the US does. So much for sovereignty and consumer protection. No monopoly Google can build is as good as the government forcing you to accept their terms.
>No one should be required to carry an attacker-controlled tracking device
What about being required to carry a your-own-government-controlled tracking device?
Because the US or Chine government can't harm me in Europe via the data they collect from me, But the EU authorities can if they want to, so naturally I fear them more if they were the ones hoovering my data.
What are the odds they're using this on-shore tech grab to implement their own domestic version of China's social credit score system, to easily get data on their own citizens who commit "wrong-think", without having to through the effort to twist the arm of US entities every time they want to do that?
Food for thought, but I do think we're living the last years of online anonymity, it's inevitable.
The odds are very low. It all depents on the people. So far, the European citizens are very privacy senstive. The European institutions are characterized by a huge devision of power. There is no chance that European instutitions can impose their will against a considerable majority of people. If people turn away from liberal democracy, that's another matter. But then everything is lost anyway.
It's substantially neutered from the original proposal, with most of the scary parts taken out. I'd count that as a win as far as how antidemocratic the EU commission is.
Given how many world leaders form the west had absolutely the most vile chats with Epstein about doing despicable things to people, I'd totally want chat control but only for our leaders. They certainly proved that's who needs it the most to keep us safe.
> So far, the European citizens are very privacy senstive.
In some areas, sure - like GDPR.
In other areas, absolutely not - like chat control.
As another commenter pointed out, it seems as if government mandated privacy intrusion is OK, while violations by corporations are quickly shutdown. It’s like the opposite of how it works here in the US.
The Danish proposal for indiscriminate chat control did not receive enough support and was retracted last autumn. Similar proposals have been put forward regularly over the past 30 years and have so far come to nothing just as regularly.
For the conservative (and sometimes not so conservative) non-experts things like this sound like an easy win. So every new generation of politicians has to be educated about it again.
The Danish proposal for indiscriminate chat control did not receive enough support and was retracted last autumn. Similar proposals have been put forward regularly over the past 30 years and have so far come to nothing just as regularly.
>it seems as if government mandated privacy intrusion is OK
Once you give people an outside boogieman(Putin, Trump, Covids, etc) or a self inflicted false flag crisis(surge in violent crime rates for example) to shake them up to their core and put the fear in them, you can then easily sell your intrusion of privacy in their lives and extension of the police state, as the necessary solution that protects them.
When you start lose control of your people because their standard of living has been going downhill for 2 decades and they realize the future prospects aren't any better so they hate you even more, you can regain control of them by rallying them up on your side in a us-versus-them type of game against external or internal aggressors that you paint as "the enemy". The media is your friend here. /s
This isn't an EU or US exclusive issue, it's everywhere with a government issue. The difference as to why the EU people seem to be more OK with government intrusion compared to the US, is that EU always has external aggressors the government can point to as justification for invasiveness and control, while the US has been and still is the unchallenged global superpower so it has no real external threats ATM, meaning division must be manufactured internally (left vs right, red vs blue, woke vs maga, skin color vs skin color, gender vs gender, etc) so that the ruling class can assert control in peace.
Either way, we all seem to be heading towards the same destination.
> So far, the European citizens are very privacy senstive.
Only from corporations, but not from their own governments. A lot of Europeans put a lot of blind faith into their governments and the EU, and criticism of these institutions is usually met with accusations of being a bot, MAGA or russian troll.
>The European institutions are characterized by a huge devision of power.
Didn't really stop them passing whatever rules they wanted during Covid, did it? Or today with Russia and Ukraine situation. Sure is convenient that we keep having more and more crisis and boogiemen that governments can leverage to deflect accountability and bypass the wishes of the population, for our own good of course.
>There is no chance that European instutitions can impose their will against a considerable majority of people.
Famous last words. People always can be, and routinely are, manipulated to vote against their own best interests, even if everyone claims manipulation doesn't work on them. The propaganda industry is HUGE. Why do you think Germans supported to tie themselves to Russia's gas and destroy their nuclear power. Was it all their original thoughts or was it a massive campaign of dis-/mis-information designed to get everyone on board the same train? And mass manipulation like this is every other Tuesday these days. See Cambridge Analytica.
A individual person can be smart, but people together as a collective voting block, are stupid, and the elites treat us like cattle, as seen in the recent files.
> Sure is convenient that we keep having more and more crisis and boogiemen that governments can leverage...
The problem with this phrasing is it makes it sound hyperbolic, but it is important to remember the world is large and there are always, in a literal and normal sense, multiple major crises going on at any moment.
People who don't pay much attention to politics sometimes get confused about why crises elevated by the corporate media get ignored. A big answer is becuase they are elevated for political reasons, usually the crisis is fairly routine in absolute terms.
>there are always, in a literal and normal sense, multiple major crises going on at any moment
True, but my point I wanted to draw attention to, is HOW these crisis are handled now, not that there's many of them.
Every crisis now seems to be exclusively used as a vehicle to justify taking away just a little bit more of your freedom and anonymity, or implement more fiscal policies that will leave you footing the bill but just so happens it will be enriching the wealthy as a side effect.
Because such policies shoved out the door in times of crisis, don't pass through the lengthy public debates and scrutiny regular policies have to go through, so it's the perfect opportunity to sneak and fast-track some nefarious stuff in.
I'm not that old yet, but I don't feel like this backdoor was misused to this extent in the past, like pre-2008 I mean (except 9/11 of course). It definitely feels like politicians have gooten of taste and are abusing this exploit now more with every little opportunity.
Tracking device might be the wrong thing to focus on. The US has other ways of messing with foreigners who depend on services provided by US companies, like suddenly cutting off those services in the case of ICC judges.
IIRC, ICC judges lost access to their O365 work email accounts. Worst the US can do to me is turn off my Steam, and Gmail but I can easily live without those.
Now imagine being debanked by your own government because they don't like what you're saying and becoming unemployed, homeless and dead. I don't think they're remotely comparable.
For example, a few years ago, a power tripping gov bureaucrat turned off my unemployment payments over a technicality. Luckily, I had enough money to pay a lawyer to sue them and won, but it was tight. What if I hadn't had the money to hire a lawyer? Since I was in a foreign country, with no family or close friends to fall back on. I was exclusively relying on the welfare state I paid into for years, that then turn its back on me for shits and giggles.
So I don't think you understand just how bad it can be for you if your government decides to turn on you and fuck with you, if you're comparing this to losing access to your work email account.
See the famous case of UK postal workers that got fucked by their government trying to hide their mistakes.
Of course in this judge's case there might still be some banks who are willing to work with him even at the risk of getting sanctioned as there weren't language in the news that he was completely debanked which I assume they would highlight if it was the case.
You most likely use a Windows PC and an Android phone. If Uncle Sam viewed you as a threat actor, he could ask both companies to send you a signed and verified update to either your OS or apps they control, running whatever he wants.
> IIRC, ICC judges lost access to their O365 work email accounts. Worst the US can do to me is turn off my Steam, and Gmail but I can easily live without those.
They lost access to everything american, including Visa and Mastercard.
It's in french and maybe not the best source but it's not paywalled :
> "Payments are mostly cancelled," he continued, "as almost all cards issued by banking institutions in Europe are either Visa or Mastercard, which are American companies."
They are not completely debanked since they can go to the bank and withdraw cash, but it's a crippling situation to be in.
It's all the same. How is suing Google any different, if you instead get debanked by Google for violating their "terms"? The only solution is untraceable, permissionless money, like Monero. Why do you think governments try so hard to ban it?
Being de-Googled is a hardship, though there are replacements for virtually all its services. I acknowledge you are well informed on this topic.
It is not unreasonable for governments to pursue avenues for laundering money. I recognize that you likely don't believe governments should prosecute money laundering, but that view is not aligned with the majority of citizens in your country.
Your bank (like most European ones) requires you to pass attestation to use their services. If you don't accept Google/Apple's terms, you can't access it without extreme difficulty.
I can always access my bank via a web browser or even in person at the teller at a branch somewhere, or as a last resort via snail mail from attorney, but most importantly even if I get locked out somehow by google, the account still runs and I won't be homeless as my salary and rent auto-payments keep going regardless if you can access it or not.
How is this comparable to your government debanking you meaning that no bank, landlord, layer or job will touch you?
I... don't think you understand debanked. There is no movement OUT of your account. Deposits will be processed all day long. The intent is to tie up access to as many of your assets as possible. If you think anything of yours will just keep on going if you end up debanked, you're sadly mistaken. In addition, based on the U.S. Bank Secrecy Act as amended by the PATRIOT act, covered entities are forbidden from disclosing to you anything about why your account is frozen.
It's as close as you get to a complete shunning from modern society. You're reset to the cash you hold on you and keep custody of. And yes. In the U.S., the list that manages who can and cannot transact is centralized under OFAC. So it is at the whims of Executive whether or not any financial activity can be done with you.
Yeah it seems that some politicians have noticed that they can enact a lot of self serving authoritarian legislation that wouldn't fly otherwise if they push it as populist independence-from-US thing. Can't let a good crisis go to waste, of course.
One only needs a few looks at what the EU Commission has been doing lately to see that if left unchecked their plan is a UK-like total surveillance state.
I don't disagree but that wasn't the point here. The point is they are handing even more control to a different US entity. Putting my tinfoil hat on, I assume the authoritarians are intending to simply buy the data from the American companies to circumvent legal restrictions, as in the Five Eyes arrangement.
It's a security measure against the owner of the device, in other words, an attack. Would you be okay with me using a remote control to forcibly slow down your car so I can merge? Using attestation this way is fundamentally incompatible with ownership. If the bank wants some assurance about a device, they need to sell or issue one to me, like credit cards or point of sale machines, which are explicitly not your property.
The fact that the assurance is provided by a third party you have little recourse against just adds insult to injury.
Would you consider MFA to be a measure against you, the owner of the device, because it makes it harder for you to login?
>If the bank wants some assurance about a device, they need to sell or issue one to me
They are offering you free software and are operating under a security model tied to these specific devices. You're still free to walk into their branches, or use their physical cards, if you prefer not use their limited selection of devices.
>Would you be okay with me using a remote control to forcibly slow down your car
Car manufacturers do this as well though. Some of this is for the benefit of their customers (preventing theft from easily cloned keys). Some of this is not for customer benefit, like locking down infotainment systems.
Banks however are only interested in preventing fraud.
> If the bank wants some assurance about a device, they need to sell or issue one to me, like credit cards or point of sale machines, which are explicitly not your property.
In this example, a banking app is not making the entire Android device non functional when it refuses to work when remote attestation like Play Integrity fails.
An important security measure for who, though? The servers at the bank should "never trust the client" in case the attestation is bypassed or compromised, which is always a risk at scale.
If it's an important safety measure _for me_, shouldn't I get to decide whether I need it based on context?
I think it's fair for banks to apply different risk scores based on the signals they have available (including attestation state), but I also don't want the financial system, government & big tech platforms to have a hard veto on what devices I compute with.
It's an anti-brute-force mechanism. It's not for you, it's for all the other accounts that an unattested phone (or a bot posing as an unattested phone that just stole somebody's credentials via some 0-day data exfiltration exploit) may be trying to access.
Sure, banks could probably build a mechanism that lets some users opt out of this, just as they could add a Klingon localization to their apps. There just isn't enough demand.
If you work on mobile apps you will notice that full attestation is too slow to put in the login path. [This might be better than it used to be, now in 2026].
I don't think a good security engineer would rely on atty as "front line" anti brute force control since bypasses are not that rare. But yeah you might incorporate it into the flow. Just like captchas, rate limiting, fingerprints etc and all the other controls you need for web, anyway.
I know I'm quibbling. My concern is that future where banks can "trust the client" is a future of total big tech capture of computing platforms, and I know banks and government don't really care, but I do.
Correct. And the end of ownership, privacy, and truth too. If something can betray you on someone else's orders, it's not yours in the first place. You'll own nothing and if you aren't happy, good luck living in the woods.
> you work on mobile apps you will notice that full attestation is too slow to put in the login path
Hm, Play Integrity isn't that slow on Android, from my experience.
> don't think a good security engineer would rely on atty as "front line" anti brute force control since bypasses are not that rare
I'm not privy to device-wide bypasses of Play Integrity that ship with Trusted Execution Environment (which is pretty much all ARM based Androids), Secure Element, and/or Hardware Root of Trust, but I'd appreciate if you have some significant exploit writeups (on Pixels, preferably) for me to look at?
> My concern is that future where banks can "trust the client" is a future of total big tech capture of computing platforms
A valid concern. In the case of smart & personal devices like Androids though, the security is warranted due to the nature of the workloads it tends to support (think Pacemaker / Insulin monitoring apps; government-issued IDs; financial instruments like credit cards; etc) and the ubiquity & proliferation of the OS (more than half of all humanity) itself.
> for the Android case, as you use it from your bank's app, it would typically require some Google security assurances - so no Huawei phones allowed, for example
I don't know about Huawei, but actually most (all?) of the banking apps in Spain should work on a non-Google-certified Android builds. There's an community list tracking GrapheneOS compatibility at https://privsec.dev/posts/android/banking-applications-compa... and all of them currently appear supported just fine.
> Police in Spain have reportedly started profiling people based on their phones; specifically, and surprisingly, those carrying Google Pixel devices. Law enforcement officials in Catalonia say they associate Pixels with crime because drug traffickers are increasingly turning to these phones. But it’s not Google’s secure Titan M2 chip that has criminals favoring the Pixel — instead, it’s GrapheneOS, a privacy-focused alternative to the default Pixel OS.
> Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
The article starts with Wero right off the bat, which a pan-European rebrand and continuation of the Dutch Ideal. The Dutch have been using Ideal everywhere, and you usually use that to pay online. It redirects you to your bank to acknowledge the transaction, and most bank have auth methods where a smartphone is optional. Most often used for sure, but optional, and you can complete the transaction with a hardware reader and your debit card as well.
The only exception are the neobanks like Bunq, which actually are smartphone-only. That one in particular is great if you appreciate the CEO and staff keeping a personal eye on your transactions (no kidding).
On Portugal we have the Multibanco network, which already provided Internet like services for buying stuff on the terminals and eventually graduated to have online payments as well, however only in Portugal.
Likewise, in Germany we can have SEPA for most stuff.
And in Greece there is Viva.
Problem is getting something that actually works across all European countries.
The problem isn't just getting something that works across all European countries. It's getting something that works globally.
While we may make most of our payments within EU, basically everyone still occasionally pays for something outside of EU, either online or when they travel. This means if the new thing only works in EU, every European will still need and have a MasterCard/Visa even if they use it less often than before.
This is still a massive amount of leverage - MC/Visa still have the ability to block payments made from EU citizens/companies to outside.
Many (most? all?) of the payment systems I’ve used over the years can interop with Visa or Maestro. Case in point: my Bancontact cards can pay in any Belgian business even if they can’t afford the better machines that do VISA, but my card also has the VISA logo. Same in Portugal and Germany.
You can buy things from your local Amazon or national equivalent that come from outside using this systems, so, you are not so restricted to EU sellers.
I suppose the most problematic would be traveling. I recently when outside the EU and was surprise how smooth the process was using my Visa card, to the point I didn't use any local currency.
On the other hand, I recently buy books from the UK and it get stuck for two weeks in customs, and it had nothing to do with the payment platform. I had not realized how difficult is to import something from outside the EU, even for personal use.
Internal transactions all over the world are routed through US companies. I have paid using Visa or Mastercard at some point in Australia, Indonesia, India, Frnce, Sri Lanka, Singapore, Dubai.....
its not exclusive, but there is a problem with network effects. From the point of view of a business why should they add support for a new payment system no one users, from the point of view of consumers why should they sign up to a new system that no one accepts?
As I said in another comment the most likely alternative is a more decentralised system that all countries/currency blocks that want sovereign payments can get behind.
I've been in Portugal sometimes, and to me MB was synonymous with "we accept credit cards", and in fact it is in the sense that you can pay using Visa or Mastercard in those shops. But, is it a standalone system that doesn't require anything outside Portugal in order to work? With their own non-Visa credit cards? And can you use them when abroad in the EU, for example?
It's a standalone network. Most Portuguese cards are also VISA/Mastercard, but payment terminals may only have a contract with Multibanco, meaning only Portuguese cards are accepted. It's quite common for foreign cards not to be accepted.
Nope, it has nothing to do with credit cards, although it also accepts them.
It is majorly used for debit cards, and similar in use to the famous Minitel in France.
You can use it to load pre-pay phones, or other kinds of rechargeable services, buy tickets for public transport and various kinds of shows, pay water, electricity, taxes, among other services.
There is now an app used to pay on shops via QR codes.
You can also pay online with one time cards, that are generated for a single transaction.
Outside Portugal it is a regular debit card.
When you access Multibanco with foreign cards, you can only withdraw money usually.
All the stuff I'm familiar with is only payments (with entity and reference).
Now that I think about it, you could search for things on Minitel but I don't remember if payments were made as phone charges or if they could also be done with transfers.
Minitel was so prohibitively expensive to use (just about every service cost multiple francs per minute), I didn't do much with it.
I just bought Kampot peppers from https://www.unclespepper.com/ which is in Germany, the name notwithstanding. And yes, I paid with my Danish Visa card. No problems except that I had to adjust my ad blocker once.
SEPA would be a decent solution with instant QR code generation and app payments, but the transfer fees are ludicrous for daily use (~1-2€ per wire). Or maybe it's just my bank being greedy fucks as usual.
I use my credit and debit cards the same way today as I did before smartphones existed. I never invited the extra surveillance middleman of Google/Apple into my transactions. And the convenience of tapping or swiping a plastic card is simpler than using my phone anyway. Is this not possible in Spain?
Governments frown upon KYC-less digital purse cards. Gotta force everyone to share their national ID number to just open a bank account to keep out drug dealers, terrorists, or NSFW game peddlers.
Banks generally don't like disposable digital purse cards. They make money off fees and interest. If a product doesn't rope you into a customer "relationship" where you link your pay deposits or later might get a mortgage or car loan they can only make money off fees. Enjoy paying $5 to activate a $100 prepaid debit card!
Credit cards provide convenience and cash back benefits. Some might prefer to pay cash for everything for ultimate privacy, and that's fine. But credit cards are the compromise I make. I can still pay cash when I think it's appropriate for a given transaction.
Using Google or Apple Pay so I can tap my phone instead of my card gives me no extra benefit that I care about and complicates my ecosystem with another party.
I'm with you. Low-tech works just fine. I hate the idea of having to depend on a working phone just to pay for things.
But isn't the promise of Apple Pay that you never expose your real credit card # to the merchant? So they can't track you? I know Walmart in Canada really resisted Apple Pay for a few years because it would mean no more ability to track people by their payment methods.
> But isn't the promise of Apple Pay that you never expose your real credit card # to the merchant? So they can't track you? I know Walmart in Canada really resisted Apple Pay for a few years because it would mean no more ability to track people by their payment methods.
Yes, this is exactly what Walmart does in the US since they still don't accept Apple Pay/Google Pay. When I go in and make a purchase using my credit or debit card, they'll associate it with my Walmart account and it'll show up as a "recent order" in the Walmart app because I have the same card saved there for ordering groceries online. They use those in-store purchases to recommend things to add to my grocery orders all the time.
Yes, but in Spain all of our cards are Visa or Mastercard, afaik, so you can't really avoid using American tech in your daily payments (unless you use cash, which remains a very convenient method, by the way).
> Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
I would also hope so, that is the entire point. The reason they are scrambling right now is because Starlink just shut off all of Russia. Because Starlink was so cheap and easy (and stable for the last 4 years of the war), a lot of people in Russia stopped using any other form of internet access. And while all of Europe is happy to see Russia go away, they are concerned that the same can be done to them at a whim by any number of American companies. So they are trying to quickly create alternatives to anything American including software providers like Microsoft 360.
As for credit cards, it is not as if there is something intrinsically American in credit card processing. They can just as easily create a new system that uses the same protocols as Visa and Mastercard.
Having your entire economy dependent on a company you don't control in a country you don't control was considered acceptable for as long as a concept of "allies" existed. That is not the world we are living in right now.
Never mind russians putting starlinks on flying bombs to blow up Ukrainians. But those poor Russian Internet users you invented. While it’s jailable offense in russia to own starlink.
> they are trying to quickly create alternatives to anything American
They're the same bright minds that ensured no alternatives could naturally come out of the European market trough relentless bureaucratic central planning. I have zero hopes of a good outcome
Actually European integration the last 30 years has been pretty remarkable. In the past, not even electric plugs were compatible. But the EU is not a country. A lot of the inefficiencies are actually features sought by key members to protect their own local incumbents.
> a lot of people in Russia stopped using any other form of internet access
What you're saying is just plain false. No one has ever used Starlink in Russia. It doesn't even work here. It never did. Russian troops were using Starlink on Ukrainian territory, that's what was shut off.
Starlink was never available in Russia due to the sanctions regime. It's only use by Russians was via grey import terminals on the frontline in Ukraine (made possible due to complications of geofencing).
What are you talking about? Starlink never worked in russia. It worked in Ukraine, and it was shutdown in Ukraine by using a white list for which any Ukrainian can easily apply.
The goal was to shutdown Starlink usage by russian drones in Ukraine and by anyone on the occupied Ukrainian territories.
> Because Starlink was so cheap and easy (and stable for the last 4 years of the war), a lot of people in Russia stopped using any other form of internet access.
What are you smoking ..err.. any source to your claim ? (Which is between bizarre and just plain wrong).
Logical next steps:
1. European app store that has to run on Android/iPhone
2. European phone (platform) -- maybe as a joint venture of different European players / not a single company.
Wero is expanding around Belgium, France and Germany while Bizum has "joined" the European Payments Alliance with Bancomat and SIBS from Italy and Portugal respectively, not sure how these work exactly as I'm also located in Spain.
My point being, if these payment systems start becoming more interconnected and join within a standard, I wouldn't be surprised if we eventually saw Bizum cards around here, Wero cards in other places, and many more.
At least that's my take on it. Of course there's still a long way to go, such as developing the system, banks adopting it, businesses adopting it, then customers (which would probably take years, many people wouldn't bother switching at least until their current card expires)
I don’t see why they can’t just piggyback on existing, proven solutions such as Bancontact, Carte Bleu, etc., which are all based on a card running on its own network. If it’s app-based, we’re excluding quite some citizens from it.
Digital Markets Act, also Apple nearly lost their payment monopoly in Germany as powerful banks lobbied for a law forcing them to open up. It was passed, but then they didn't want to use it. If I would guess, Apple offered them preferential conditions to not have a precedent.
It's an app that uses NFC or, if needed, reads a QR code and does a web request (i.e. needs internet).
Neither Google nor Apple will block that, or take a cut; and it's already available in multiple markets.
This is about taking stuff that already works in one or two countries, design a similar system that works across countries, and mandate that all banks under ECB supervision implement it.
Lack of negotiation power. Less control over Android than Apple has over iOS.
Google keeps self-sabotaging Android Pay. They lacked market power so cellular carriers blocked it hoping to advance their own payment ecosystem (ISIS). Google changes the payment brand every few years, and fragments it into two separate apps or combines them. It's rather like their messaging strategy.
Canada has the interac system and it works pretty wonderfully, it's integrated into other systems for overseas compatibility but it can operate entirely independent of VISA/Mastercard if the POS supports it.
It's true that it's a problem, but it can be easily fixed in the future. For example they could just change the app to work on any old android fork. You still get the benefit of no longer having transaction data run through the US.
But right now many of us are concerned with not being able to run e.g. GrapheneOS without locking ourselves out of all basic digital infrastructure. We shouldn't wait until it gets untenable for the EU to lock us into Google and Apple, we want independence from the start.
This "Play Integrity" garbage is the first thing europe should break with. Instead we have Italian government app refusing to run on devices not serving Google's interest.. shame.
I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated.
No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect.
I'm a little shocked that of all the comments so far, no one has mentioned the financial risk borne by this whole value chain. OP is operating as if it's just a debit system moving money from one account to another but:
- For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
- For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees.
- For both consumers and merchants, fraud risk is real and while it's the most solvable part of all this it's a real (and costly!) factor today. That risk for fraud gets moved upstream to the networks/acquirers/processors/issuers and that premium shows up in (you guessed it) processing fees.
If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
None of what you’ve mentioned has anything to do with Visa and Mastercard. Visa and Mastercard are just payment networks, their whole business is literally just transporting transaction information from payment terminals to banks and payment processors, plus keeping track of all the numbers (which is pretty important).
Payment networks don’t provide credit or any kind of liquidity whatsoever, that entirely provided by the various financial entities that communicate via the payment network. The reason Visa and Mastercard haven’t been easily replaced is simple network effects, nobody wants to integrate with a payment network where there’s nobody to transact with.
There are many countries where debit cards are the norm and credit cards are extremely rare.
In France, people are so afraid of consumer credit that cards are renamed ‘deferred debit cards’ rather than credit cards, otherwise people do not want them.
Growing up in the EU, living in North America now, it's mind blowing to me how much credit these companies are making available to me. Not that I ever would outside of an actual emergency but I can see how it's tempting to someone who didn't grow up in a financial risk averse society.
There is also a major difference as I understand it. They need to be resolved at the end of a certain period. There is a legal difference from Credit cards as in there is no continual liability and thus no continued line of credit. Getting a true credit card is also a lot harder here (not France) than a deferred payment card (usually 1 month) and has stricter credit checks.
These are historically called “charge cards” in the US and are common for corporations who give employees “credit cards” for travel and the like.
American Express is big in this market - what looks like a normal Amex Business Platinum card can very well be a charge card that needs to be paid in full at the due date every month.
There are minor differences but the big one is no carried balance between months is allowed. Payment in full due each month.
Visa and MC have basicly all of these configurations, depending on country & legislation:
- Direct Debit
- Deffered Debit
- Rolling Credit
- Installment Credit
And if you are a $MegaBigCorp customer of them, you can customize even more.
indeed. my credit card requires me to preload money from my bank account. it's like there is a second account that keeps a balance that i can spend using the credit card. whenever i use it, the balance is updated. how the credit is paid off i don't know. it could be either right away, or the amount is just hidden by my bank until it is time to pay off at the end of the month. either way, the credit limit is zero. so i can never spend more than i put in first. (though this may be based on how much i spend or be a configurable value.)
It's more taboo to talk about revolving credit card than crack addiction for a french.
I don't know a bank that offer them, even the shady online bank.
Historically, these have been issued by "consumer credit" specialized banks like Sofinco; and retail chains ("carte Aurore"); traditional banks would seldom advertise them, if offered at all.
Things have been changing a bit in recent years. Since the "debit" and "credit" nature of the card is now written on them, French folks have started to request "credit" ones for travelling (to rent a car for instance).
My understanding is that for car rental purposes, anything using Visa/MC (and not a national debit network like Visa Debit in the US) will work, it doesn't actually need to be backed by a revolving credit. At a US gas pump, a Frenchie needs to select "credit" even though the card has "debit" written on it. Still, should the clerk refuse the card because it reads "debit" without running it... better have this "credit"-labeled one.
> My understanding is that for car rental purposes, anything using Visa/MC (and not a national debit network like Visa Debit in the US) will work, it doesn't actually need to be backed by a revolving credit.
Many companies will refuse all debit cards, or all cards with "electronic use only" restriction, at least for the deposit, irrespective of the payment network involved.
If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly.
But the more concerning fraud is when you purchase something and don't receive what you should have received from the merchant. Whether it is due to outright fraud or not. In these cases you will also have your money reimbursed by your credit or debit card.
> If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly.
This may be what the letter of the law says but this isn't reality. Using debit puts you at greater financial risk.
“Using debit puts you at a greater financial risk.”
What how? Surely the US populations credit card debt dorf even the global populations debit card fraud numbers. So while my whole family in a combined 200 years of adulthood have indeed lost some 1000 euro total in fraud, it's not thing compared to the average Americans credit card bills.
I'd rather risk the street criminals with my debit than the suit wearing ones with their credit.
My debit card is a direct line to my primary bank account. If something goes wrong there and an attacker gains access, my cash is simply gone. Yes, the bank will perform an investigation and yes they may issue some provisional credits as a bridge, but there's a window of time between the theft and that investigation concluding where my actual cash is not in my account.
With a credit card, if the card is compromised, its not my money being stolen - its the card issuer's money from my line of credit, and they were planning on settling up with me when my monthly statement closes. I still have to launch a fraud case with the issuer, but critically, _all of my money is still in my bank account_ and I can continue to pay my other bills and obligations as normal.
I think its reasonable to consider giving up that buffer to be additional risk for the debit card approach, setting aside any other advantages or disadvantages between the two.
EU has much stronger consumer protection and it's on the banks to provide secure systems. Like if my card gets skimmed by an ATM or merchant the bank pays for the fraudulent charges. And overall the EU has much less card fraud.
That's what I said... but, that takes time, time for which you don't have access to that cash.
Just a quick Google... Wells Fargo's policy is 10 days to either case resolution OR provisional credit. I assume that's typical for American banks. For somebody living paycheck to paycheck, 10 days is a long time to go without access to what little cash they might have.
You guys use the debit card linked to your primary bank account??? There's been virtual cards for online shopping for 10+ years now. They're meant to be linked to an empty or low amount bank account. Now with Revolut you can schedule auto top-up to keep this low amount up to date.
Not to mention the per-purchase (online/in-person) limits, mandatory PIN entry, and daily maximums...
We don't use any cards for online shopping, what do you mean? In most European countries online shopping uses a payment API that takes you to your bank's payment portal where you can review the transaction amount before confirming. It's no longer the 20th century, we're not handing out any card details to online merchants.
Banking in the US feels like it's stuck in the 90s. Heck, half the time, it's not even chip+PIN, it's chip+signature (which is a relativelyrecent change from carbon copy or swipe and signature).
I've never had a web shop use an API to deduct from my bank account - the closest thing is PayPal, which as far as I can tell is basically ACH under the covers, just though an intermediary. Pretty sure more Americans use their CC or debit card for online shopping.
We have virtual cards as well, maybe used it once. But we also have a lot less fraud and typically require 2fa for online purchases and chip+pin every x purchases.
with a debit card your cash is gone from your bank account in that moment, even if you get it back later (hopefully). With a credit card they are not able to drain your bank account, the risks are entirely on the cc company and they will be significantly more motivated to get that back than a bank would. it's entirely their problem, not yours
In UK, consumer protection for Credit Cards is guaranteed by law (Section 75 of the Consumer Credit Act), but not for Debit Cards (that's contractual).
“ If, for example, the payment was made by credit card and the product has not been delivered, the consumer can contact their credit card company directly and request a refund.
Credit card firms can usually refund the money quickly, Beurling-Pomoell noted, whereas consumers who paid by debit card must try to claim their money back from the bankruptcy estate.
"Unfortunately, [reclaiming money from a bankruptcy estate] is usually a very long and difficult process. Consumers are generally in a relatively weak position when a company goes bankrupt," he said.
Beurling-Pomoell added that consumers should always consider using a credit card when purchasing a product that they do not immediately receive.”
I think some examples are in order - where has the UK, having recently left the EU, changed its laws so that it was completely out of step with consumer protection? Or is this one thing that made it necessary for them to leave the union, perhaps?
The "consumer protections" of the EU basically amount to communism (i.e., state interference in private matters). So no, that's not a thing the U.K. should emulate.
This is the law which regulates such things, and the law makes no difference between any payment service (ie credit or debit), when it comes to unauthorized use, see chapter 5:
Others have said it but I will pile on as this is dangerous misinformation.
It’s sort of true in a legal sense, but not a practical one. If you find yourself in a dispute (even outright fraud sometimes) you might end up stuck for weeks or months with your disputed funds frozen.
If you are a highly paid software engineer with considerable assets and transaction volume at your bank it’s likely you will never experience hardship with disputing a transaction. If you are someone scraping by and that $200 depends on you paying rent on time that month you will find your experience to perhaps be different.
I’ve helped friends and family with such disputes in the past. Credit cards even when it “goes wrong” are much better to deal with. Your credit limit being reduced a bit is immaterial to your life most of the time. Having your own money tied up during an investigation that demands more and more paperwork like police reports etc. can be incredibly damaging and if nothing else quite stressful. The experience some of my friends had in these matters is nothing like I had when I had my wallet stolen and I no longer recommend anyone use debit if they can avoid it.
Heck, I had a friend who doesn’t even have a passport dispute an ATM transaction in a country he never visited. The bank initially denied it and it took weeks to eventually get it resolved in his favor.
In the end having the banks money tied up vs your own money at risk is always better if you can handle the responsibility of a credit card.
> Others have said it but I will pile on as this is dangerous misinformation.
Was that an introduction to the rest of your comment?
Explain to me please how a dispute with a vendor on a purchase makes a difference for your ability to pay rent? If the purchase was not fraud, then you have used that money anyway with your purchase. Unless you're planning to pay rent by bartering your Amazon order.
If you're instead talking about a stolen or cloned debit card, then that money is refunded usually as soon as you've made a police report and sent it to the bank, which is a matter of two days at most. The paperwork is not difficult, because cards get stolen and cloned all the time.
But the fraud protection is the same, even if procedures and timelines might differ.
Most places outside the USA actually. A liability is someone else's asset, and everyone wants USA assets, so the USA needs to generate a lot of liabilities.
It's just now how it works in most of Europe. I've lived in four countries, had accounts with lots of banks, paid for countless plane tickets and booking reservations, and only had a credit card once when I was issued one at work. I don't expect I'd ever get a personal one, and can't think of anyone that regularly uses one.
The only time I even considered it was to build a credit score in the UK to eventually apply for a mortgage, but even then it's not really necessary.
Even after a few years of living in the UK, I could not get a credit score from any of the three or so providers because they said they didn't have enough information about me. I guess being on the electoral roll and paying bills on time just wasn't enough.
Not having a credit score isn't necessarily a big problem, as banks use it for context rather than making decisions purely based on it, but I did see some advice online about getting a "credit builder card" [1] (essentially a high interest and low credit limit card) as a way to build up credit history.
I decided that getting in debt just so I can prove I can get out of it is a stupid system, and didn't do it. Last time I checked (with Experian), I had a perfect credit score, so I don't know what happened in the meantime.
Ah yes I see, being new to the country does not help instill their confidence either. True.
From your nickname it sounds like you are from Romania so if that's so there might be a dose of xenofobia included there as well. That is kinda big in the UK right now, the whole Brexit was fuelled by it, sadly, especially concerning eastern Europe. I was on the receiving end of some of it myself too, being called 'a non-national' and eyed with distrust. I'm sorry.
Those 'protections' have nothing to do with the purchase being credit or debit. They're just artificial incentives from the banks for you to pile on the debt. We frown on that behaviour here in the EU so it doesn't really happen. The same with the cashbacks american banks offer on credit cards, they're just paid by the extortionate card processing fees that vendors pay. So essentially, you are paying for your own cashbacks because the vendors just include it in the price in the end (and usually for everyone, not just those paying by credit card)
Besides, if you want insurance just get a 30€ per year rolling package.
I would have said "true", or at least - I would have said "I do, but never incurring a charge on next month's bill", but with services like Flex from Monzo, you can actually get credit over 3 months with 0% interest rates, which not only makes buying stuff more likely, but spreads out the costs. It doesn't solve over spending though.
I used "value chain" euphemistically because you can get really complex on this and I wanted to spare the casual reader. I meant your credit card as an end-user product in your pocket and not meaning the card networks in isolation, but the value chain is roughly:
1. Merchant (bears little fraud risk but a lot of chargeback risk)
2. Payment Gateway (little direct risk but some liability risk)
3. Merchant Acquirer (more direct risk but mostly if merchants become insolvent)
4. Card Network (Visa/MC/AmEx - less risk but significant underlying costs managing a global technology that spans the financial system and needs to be distributed to almost every merchant of any scale in America)
5. Issuers (Banks + AmEx - most risk but get a big share of interchange fees)
I've surely missed something here that the very smart (and increasingly grumpy these days!) HN community will doubtlessly pile-on to correct, so I apologize in advance for errors or omissions... and I bow down if @patio11 swoops in to tell me about the complexity I've missed in either payments or Japanese economic/cultural conventions
Will also add that the benefit of credit is not overdraft but smoothing cash flow... if I'm living paycheck to paycheck and get paid every two weeks, I will incur essential expenses at the beginning of the fortnight that I can afford but lack cash in my account to pay now. I can't overdraft because I won't have the funds to deposit into that account for another two weeks. I'm getting a service that smooths my cashflow and there's a small premium added to reflect that. (Could you save up enough to avoid needing this? Is that a uniquely American way of living? I don't know! I'm making a descriptive claim not a normative one!)
Sadly I’ve noticed that comments on this topic usually devolve into tribal comments about how ‘things are done in the EU’ which always seem to not be actually that representative of the 27 different countries of the EU, but of course must be better than the US.
I shouldn't have to pay for your usury economy if I'm using cash. If that were really the issue, these companies would have no problems with businesses charging different prices or offering discounts for cash.
The networks allow cash discounts if it's posted clearly and the customer has an option to use a different payment method -- you see this on every gas station sign alongside every highway in America. (What's _not_ permitted is adding a secret surcharge or item mark-up for credit card payments)
The latter is allowed now - after the backs of the credit card processors were broken.
They fought tooth and nail against cash discounts OR credit surcharges and they finally lost. In some areas it's rampant that you get a pretty substantial discount - often 4 or 5%, better than cash-back - and many places post "cash prices".
You can get even more if you're willing to ride the hassle of the gift card train.
The credit card companies know people spend more if they use credit cards, and they turn around and sell that to the merchants.
Some European countries forbid a price difference but they also limit card fees very low, so the merchant doesn't lose money and you don't get cash back. Forbidding a price difference but allowing high fees is nothing but pure corruption.
This law overrides any prior contractual agreements with banks/processing companies that prohibit surcharges. This is previously how MasterCard and VISA coerced merchants into absorbing the processing fee, by contractually requiring credit same as cash pricing.
> credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
Neither Visa nor MasterCard are loaning customers their money. It's the European banks that hold the bulk of the risk for European credit card transactions.
Also worth noting that who owns the risk is a regulatory question, not a technical or product one - and, like all regulatory questions, is different for different countries/regions.
Chip and pin and NFC transitions took off much quicker outside the US because merchants generally owned more of the chargeback risk than in the US, and therefore were willing to update their POS equipment accordingly.
Risk (like debt) is another place where a US-centric view will likely lead you to misunderstand the purpose of Visa/MC.
> Chip and pin and NFC transitions took off much quicker outside the US because merchants generally owned more of the chargeback risk than in the US, and therefore were willing to update their POS equipment accordingly.
Not really. The risk of all fraud is initial borne by banks issuing the cards, after all they’re only parties that have an actual financial relationship with the person providing the cash/debt. If something which results in that person cash/debt being stolen, it’s between that person and their bank to figure out who’s liable for the lost money. Chargebacks are just a mechanism for banks to recover some of that lost money, once the liability between the card holder and the bank has been settled.
One of the big reasons why Chip and PIN etc took off outside of the US, is that the US is very accepting of fraud, and charging crazy high interchange rates (up to 10x what they are in Europe) so the cost of fraud is spread over many individuals. Other parts of the world have regulations capping interchange rates, and providing better consumer protection, demanding that banks and payment networks tackle fraud, rather than increase the cost of everything by 1-2% to cover fraud losses.
> Neither Visa nor MasterCard are loaning customers their money. It's the European banks that hold the bulk of the risk for European credit card transactions.
Cash flow and fraud, yes. Credit, not much in most of Europe. AFAIK nobody has had something close to real credit cards until recently. They were called credit cards but it was a debit card with payment and deferred to the end of the month and backed only by the cash in the bank account linked to the card. I guess that no financial institution did like to risk any money on the behavior of European customers.
> For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
This is really much less of a thing in Europe, or at the very least in Germany and Spain. Mostly it's the overdraft from banks that you can use as what you call a revolving loan. Most of the visa and mastercards I've had in my life simply debit from my main account.
Visa/MC have built walled gardens which provide many services.
Some of the services include:
- Consumer Credit
- Fraud protection
- Payment network
- Discount service (rewards, etc)
- Concierge services
- Rental/Ticketing services
- etc
No one is denying the utility of what they have created. The problem is they’ve built monopolistic walled gardens where these are all bundled together which raises overall costs while also prevents competition.
These services can easily be unbundled (for example in India the payment network is open and cost free, so anyone can provide those other services on top of the payment network).
What has made this far more urgent, however, is that these companies are located in the U.S. which has recently leveraged the power these networks have to attack EU citizens for frivolous reasons.
So even if the MC/Visa business model was perfect, it would be foolish for even American allies to rely on them given the actions of the current administration.
You know here in Europe you can just overdraw your bank account anytime without bullshit fees, just with interest that is still way lower than average US Credit Card Interest (around 11%)?
Also bank transfers are easy, instant and free.
> For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees.
Yes those businesses use a bank loan for this, no need for a credit card again.
> If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
Thinking that the world doesn't have credit just because they use debit cards is one of the most idiotic things I've read today
> If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
Disagree. Credit has its uses, but debit is superior for the vast majority consumer transactions: lower fees, lower risk, instant settlement, easy P2P transfers, and broader accessibility. That we've become used to credit card payment system in the West is largely a historical aberration that needs correcting.
Also, I'm a bit biased since I live in China, but WeChat Pay and Alipay are so far superior to the credit card system that I can hardly find a single redeeming quality in the latter. China was lucky in that it leapfrogged the traditional credit card system since it didn't have that historical baggage.
Hmm, maybe for countries with strong consumer protection, yes.
I lost 3 credit cards INSIDE an airplane (hello AirAsia!). I only realized it when I turned on my phone while queuing at immigration and was bombarded with dozens of "Successful transaction" messages. That's ~30min from stepping off the airplane. When I checked my statements, I saw dozens of physical transactions (swipes/taps) with different merchants in different cities from the airport.
All 3 cards have different PINs. All require a PIN for transactions above ~USD200. Yet the banks rejected my disputes because "it's a physical transaction, so you must be the one doing it." Apparently, they all think I could fly to different cities, buy different items, and fly back to wait in immigration, all in 30 minutes.
Isn’t that financial risk of credit cards borne by the banks doing the lending? It’s not really any different to a debit card transaction on a bank account with an overdraft facility.
In the EU, debit cards are pretty common, and largely its a network effect. You need to get terminals that are supported by your payment provider.
A lot of merchant terminals are provided by banks, and frankly they are itching to get a sweet sweet cut of each transaction. Not only the information, but the cut of each transaction. Something like 0.2-1.5% of each transaction. (I'm sure mastercard and visa give them a cut)
For Credit cards, the banks/operator already handle most of the risk, and then pay visa a percentage for the privilege of charging usury like rates
> - For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees.
Their risk is covered multiple ways (as reflected in their profits). You pay an annual fee to have a card. You pay per transaction, you pay for paywave, you pay 21% in interest.
They cover their risk by hitting every possible angle.
Your comment seems to miss the point. It is totally possible to enable the first two of your bullet points without Visa or Mastercard, for example banks could just give lines of credit directly to consumers. Indeed, the myriad of loan products is run without Visa and Mastercard.
Doesn't it depend on the country? Payments with Visa and MasterCard work very differently in various countires. In Poland you can pay 0.01€ with credit card and the seller will happily oblige. In Germany even few Euros they prefer to be paid in cash.
man who has only used the american financial system: the world not singularly using the american financial system is less dynamic. surely there are no counterexamples to this.
I think it's probably a little bit harder than you think with all the rules and regulations out there. I would highly encourage anybody who's remotely interested, listen to the Acquired podcast episode regarding Visa. It's actually quite fascinating how it was started. You may balk at the length, but the whole thing had me interested.
In the Netherlands, before VISA, there already was a national debit card standard called PIN [1]. Sure, times have changed and it's probably not super easy, but it's also not going to be super hard.
Fun fact: until about a year ago it was not possible to pay using normal debit cards in most Dutch shops, you had to have a local card. I distinctly remember that AH, Vomar and Jumbo would typically reject foreign cards while Lidl and Dirk would typically accept them. Of course there were exceptions, but that was the rule of thumb.
Most Dutch people were unaware of the issue (because Dutch cards worked abroad), and those who were, were fully convinced that it's because Dutch system is objectively better (it wasn't, it was just a separate network). Then in like 2024/2025 Visa and Mastercard finally retired their special V-Pay and Maestro brands, and now most terminals in the Netherlands accept most normal cards.
There are equivalents in several European countries. The problem is that these networks are national and not European, let alone global.
National banking players did not want to give up their turf. The European Union had to twist their arms to get them to agree to SEPA transfers, instant transfers, etc.
If banking players cannot agree, then regulation (or the threat of regulation) must be used.
CB actually have higher security standards than visa.
I once worked at a company doing payment card personalization (its the company who turn blank smart cards into finalized cards on behalf of banks. They print the customers names, emboss the account number, and program the chip and the magstrip)
Every year they had comprehensive security audits from Visa, Mastercard and Groupe Carte Bleue.
One guy there told me that they did the Groupe Carte Bleue audit first, because its the toughest. If they passed it they were sure to pass the others.
European countries each have their system. But they do not interoperate. You can't pay with blik in Germany, you can't pay with German debit card in Poland.
The most obvious difference being that unlike China or India, Europe (or the EU) is not a single country. This doesn't make things impossible but certainly complicates them.
Exactly, now that the internet is ubiquitous, none of the problems with replacing credit card companies like VISA are really technical. They are regulatory, they are political, they are social.
> one of the problems with replacing credit card companies like VISA are really technical
VISA and Mastercard never resolved major technical problems. It's nothing a bank wouldn't already be able to achieve internally from a technological complexity point of view. They didn't invent any of the technologies, they just navigated the political and regulatory hurdles, then leveraged their position for more.
Your comment makes it look like the problems are "just" political or regulatory. These are more often then not the bigger ones.
My takeaway from the episode was that its actually really easy to setup up visa, you just need to get the banks, vendors, and card issuers onboard, which should be easy if you're the government
> It's just multiple computers keeping a balance. It's not complicated.
It wouldn't be hacker news without a comment like this. I haven't personally worked in finance, but I've had a lot of friends do it.
It _absolutely_ is complicated. It's not too complicated for a nation or the EU to do it in house, but no, there's a bit more there than "Claude make me a ledger"
> No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect.
I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones.
And companies like Visa, Mastercard, American Express, &c. arose initially from solving a real need. Before these companies came into existence when you traveled you'd have to take cash, or traveler's checks or some other nonsense. Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay. Need a coffee at Mt. Fuji? Easy. Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard.
> Time to do away with these foreign entities.
You'll never do that. Why? Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world.
[1] Why is it complex? Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
> Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world.
It could be handled similarly to how tourists in Brazil can now use Brazil's Pix payment system.
One way Brazil handles it is with 3rd party digital wallets that tourists can install on their phones such as Wallbit [1]. Another way is with 3rd party services that let you pay from your own digital wallet or bank app and the service makes the Pix payment [2].
Well, you could do that, but that sucks. Not just in philosophy (I don't want to download your crappy app - this applies to any country) but also in practice.
Thankfully Americans at least have enough purchasing power that the demand for convenience - just take my money with this card will keep us away from bad solutions in Europe.
The vendors you'd pay with Pix in brazil are typically the vendors who may not even accept cards at all, it's pix or cash.
(Although you CAN pay with pix at many supermarkets, I'd rate it as rare. Also useable for online payments, but you take the risk in case of fraud, unlike with creditcards)
Thanks for the information, reminds me of CashApp or something like that in the US. But just to be clear the context was, at least as I understood, moving to using an app instead of using existing credit card rails via Visa and Mastercard and that's just not going to happen because it's a worse experience (in Europe).
If you don't have the ability to accept a card at all, that's a different use case.
Cash can get misplaced or stolen, you have to keep going to an ATM to get more of it which for most costs money (my bank pays for ATM withdrawals globally for any fee), it's not nearly as convenient as a credit/debit card though it's cheaper. Though maybe it's not since merchants never lower prices and even if everyone switched to cash prices wouldn't go down. Also there are costs for the merchant to carry cash.
I think your everyday credit/debit card is still objectively better overall, even moreso for tourists which was the main topic.
> Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
Those are partially or completely taken over not by the card network but by the bank that is issuing you the card, so a change in the underlying technology will be transparent.
> Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard.
Hard disagree. Until Covid, many small shops didn't take cards in Europe. Taxis, restaurants, market stalls, even trains were often cash only not that long ago. I in the UK ran accounts in companies that had people travel extensively in Europe. We used to issue travellers with EUR200 for the things that cards couldn't buy. Most shops didn't take Amex due to fees. Americans will either have to bring a compliant card or change some cash at the airport.
I also think you have misjudged the mood. I guarantee there are a large number of people in rural Europe that would be very happy never to meet another American tourist, even if it costs them. Americans can look forward to worse service everywhere. I wouldn't be suprised if some people in rural France refused to let you have the Calvados at all.
Its not just American tourists. Its everyone from everywhere.
If you do not accept Visa and Mastercard you are not going to accept payments from all sorts of travellers (tourists, business people, people from your own country living abroad) either.
> I guarantee there are a large number of people in rural Europe that would be very happy never to meet another American tourist, even if it costs them.
> If you do not accept Visa and Mastercard you are not going to accept payments from all sorts of travellers (tourists, business people
Who all stop in chain hotels, who will accept whatever you bring.
> Xenophobic or anti-tourism?
Anti-American tourism. I would say it is a mainstream opinion in Europe that American tourists are very annoying. Each country has its stereotypes about each other, usually stemming from WW2, but the feelings against American tourists have the wonderful effect of uniting Europe. Then America elected a president that threatened us first with economic sanctions, then war. Perhaps it is a fault in our characters, but we tend to take against people that threaten us with military action.
> Who all stop in chain hotels, who will accept whatever you bring.
No, that's pretty much all European hotels actually. Hotels require credit cards for three reasons:
1. Security - if you leave the room a mess or destroyed there's an avenue for recourse.
2. To make more money - having a card on file for "incidentals" increases purchases from hotel guests.
3. Obtain payment - most people don't have the cash laying around to pony up to pay full nightly rates, nor do they have any desire carry thousands of Euros around on their person just to go pay in a large purchase at this conjured up local cash-only inn. It also makes your hotel property an easy target for robbery.
It's strange to me that you're taking such a hard stance over something that is obviously incorrect in order to... make fun of people from around the world who can only afford to stay in chain hotels on vacation?
I usually stay boutique properties which are sometimes, but not always managed by boutique property groups. They take credit cards. Every. Single. Time.
Can you provide the name of a single hotel in Europe that doesn't take credit cards?
What is Europe in this sense? In the Europe I know, every small business has accepted cards for decades. The exception if there are some children selling strawberries to tourists.
As for your second paragraph, you seem to be dreaming. Americans are some of the best tourists to deal with, and anybody who works in the tourism sector is happy to receive them.
I haven't been to every country in Europe, it is true.
A few years ago I shut down a website in Poland for someone because people didn't want to pay with cards, they wanted COD. My colleague took a train regularly in the Netherlands a few years back that was cash only. Dutch websites also have to offer whatever the Dutch payment provider is (I forget). Another colleague in rural Spain found that the price they were charged was lower if they paid cash by the exact amount of VAT. In Germany I ran a website that had to allow bank transfer as a payment method because 'companies generally don't have credit cards' according to the locals. Up until Covid travellers from our office to France and Germany always needed to use a few Euros. Up until Covid it was an absolute taboo to buy drinks with a card in the UK and Ireland, unless it was with a meal. My local chip shop is cash only today, but none of them had a machine before Covid. My local Chinese restaurant tells everyone the card machine is dodgy to see if they will pay cash. They only installed it during Covid.
I think we will manage without Visa just fine.
> and anybody who works in the tourism sector is happy to receive them.
Of course they are! That is literally their job. It is everyone else that has a problem with them.
> Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay.
Is that really true? I remember wanting to buy a train ticket at Charles De Gaulle airport, and the machine only took French credit cards. That was around 2010, so I don't know if something changed.
Well the reverse has been true IME - my Visa credit/debit cards issued by an European Bank have worked just fine abroad, including in the US. There are certainly edge cases where transactions get denied or US people think every card must have a Zip code but overall yes you can just pay.
Ha, well I was just in France last April and didn't have an issue at the machine to buy the train ticket. Though, unfortunately the train just so happened to cease to function on our last night there so we had to take an Uber in to Paris [1].
The wonderful French train company wouldn't refund the ticket either and instead insisted that we might use it one day on another trip to France. Thankfully by the time I got to the front of the line to chat in broken French to the ticket administrator, I had already accepted my fate after hearing a number of tourists (not Americans mind you) yell and stomp their feet uselessly in hopes of obtaining a refund.
[1] That was a fun adventure too. At CDG, well I found out later that taxis are "allowed" and are the same price as the Uber ride and so we could have avoided this by just taking a taxi through Uber, but a group of folks from Great Britain were ahead of me in line and I came across them later when looking for where to get a taxi/Uber. There were rideshare signs or something but they didn't lead anywhere that made sense. They seemed rather aspirational. Well, one of the members of the British group spoke good French (or good enough) and found out the secret spot to go after chatting with an airport employee I think it's at Terminal E (someone else may know for sure) or something and so my wife and I befriended the same British group and went along with them for the long walk over.
We were able to get a ride, though not cheap. Of course the bus was an option and we're no stranger, but we were on vacation and the $50 ride was just chalked up to the cost of doing business. We were already 2 hours behind schedule because of the train fiasco.
All that to say, I think using an American credit card these days is the least of your concerns. I was surprised to see American Express taken rather much more widely than anticipated. Be careful getting gas though as they place holds on your card for $250 or something like that, and once you get enough holds you can't get any more until the prior ones "roll off".
Literally just got back from a trip there and didn't find a single business or transaction that I couldn't pay for with various US-issued (Chase + BoA) Visa credit cards via tap.
Even more surprisingly to me - a pretty decent chunk of businesses even would accept AmEx. By no means all, but I recall it being basically nonexistent not that long ago.
And to be clear - much of my time was not in areas that get a ton of foreign tourist visitors.
Not saying your experience didn't happen, but given our very different experiences it might be something with your particular bank/issuer/card?
Most Americans with the means to travel also have access to credit cards with no foreign transaction fees and by selecting "pay in local currency" you get the best exchange rate.
There's still an ongoing trick that some European businesses do where they'll try and get you to pay in dollars because they can arbitrarily set the exchange rate. It's obviously within "reason" but on the higher end for no purpose other than to make extra money. I find such behavior to be dishonest and deplorable.
Why would you expect to be able to use a creditcard in a physical shop in the Netherlands? Surely you knew? It works if the payment terminal has support for it, but since no Dutch person uses a creditcard outside of the internet, your kinda going against the grain.
Each individual detail isn't difficult, the moat is dealing with a huge, huge, pile of them. But most of the details are driven by laws and regulations: of the entity in charge of those things decides it doesn't want you to have a moat any more, you've got a problem. If there's one thing the EU really does have, it's the capacity to revise regulations.
Rather than a moat of details, it's first-mover advantage. Anyone can run a credit card network, but merchants and banks need to support them. Many others exist, but the issue is that they don't have widespread adoption. Solutions that work exist, which means the lesser supported alternative is not widely used, which again reduces reason for wider adoption...
> If there's one thing the EU really does have, it's the capacity to revise regulations.
This is the central power lever of the EU and one that is frequently underestimated.
European power projection doesn't work through tanks and aircraft carriers. It works with regulations, trade deals and economic incentives. Remember how a few years ago everyone was scrambling to get GDPR-compliant? That wasn't some random event. That was the EU projecting power.
Why do iPhones have USB-C now? European soft power.
Why are things like Champagne and Prosciutto di Parma protected brands that can only be sold if they're from the actual region? And I mean not just in Europe itself, but everywhere it has deals? Canada, Japan, India, China, Mercosur, etc etc? European soft power.
The EU is playing a different game from the other major players. Not one of brute force, but one of shifting the foundational rules of commerce in their favor. And they're very good at it.
Yep. And whereas the EU can't magic itself into having enough fossil fuels or bootstrap a commercially viable reusable rocket launch industry overnight, it absolutely can align payments legislation and mandate that point of sale devices accepting Payment Provider I in Europe should also accept Payment Provider II...
Sounds like you should build a competitor if that's literally all it is...
I suspect there's quite a few other things you have to consider when you're managing trillions of dollars of transactions a year. Fraud, settlement times, up times, security, customer service, debt collection, interest rate calculation, reach, KYC, record keeping, legal inquiries.
But I'm sure we're just a couple grok comments away from a competitor
Very good examples. I'd add that Trust and connections are also huge in payments. Even if your technology is perfect, you need to integrate with tons of different systems to get full coverage, and the people who run those systems don't sign contacts with just anyone.
Don't forget stand-ins, much of this hasn't discussed that credit card networks do a lot of "stand-ins" when the issuer is unreachable (bank goes down, latency too high, etc). It's a bit unclear how things like Wero would operate when a network issue hits as Wero and EU rails won't just assume the liability for the transaction and hope it clears later as it does on Visa/Mastercard.
> I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance.
Roughly nobody argues that part is difficult.
> It's not complicated.
It's very complicated, for the reasons that all complex real world systems are. It's an absolute mess.
> Time to do away with these foreign entities.
I don't really mind the "foreign" part, but it's fairly wild that essential financial infrastructure is privatized, so let's!
Hence why crypto hasn't taken off with merchants. Because who's going to pay for merchants to change their point-of-sale systems to accept a new payment method.
If the entirety of Europe comes up with a single system I think that'll be more than enough incentive for merchants to update their pos software to accept the new network. I hope that they are eventually so successful that merchants here in the US support them too. I'd love to stop using visa and mastercard.
If we could create a single solution on Europan level, based on cellphones first and order banks to provide service of access to it for all of their customers, free of charge, for the privilege of remaining in the market, it could be done.
Crypto is also a shit payment method though. Expensive and difficult to run and with high transaction fees. And if you use a chain with low transaction fees, there's no consensus on which chain that is (otherwise transaction fees would be high) so you have to support all of them. Then you might as well outsource the whole thing.
It’s a little bit of both right? They’re entrenched yes, but it’s not technologically trivial either. The operations they do for each account might be simple but the shear volume of transactions they handle is enormous. The scale makes it complicated.
It's not a technology problem. It's a problem of being compliant with vague government regulations (e.g. AML/KYC) and getting banked (which is very difficult... thanks to perceived AML risk).
Canada has had the INTERAC payment system for over 20 years now. It is privately run by Canadian banks, universally accepted and runs on a cost recovery basis.
1. Debit Mastercard/VISA. These are Debit Cards that use the Mastercard/VISA communication system to process transactions. While they are not "Credit" cards because you are using cash in an account that is your money, they rely upon the VISA/Mastercard system and merchants will be charged the Mastercard/VISA fee like a Credit Card.
2. Interac Debit Card. Interac was the first company to offer a debit card type system in Canada, and they are the traditional bank card. These cards use the Interac system (so does eTransfer) and Merchants are charged by Interac for using the system. Its typically less than Mastercard/VISA, which is why you see these "Debit Card only" signs.
3. Mastercard/VISA and Interac hybrid cards. These are newer and combine both Mastercard/VISA and Interac cards in one. The merchant can choose how they want to proceed.
Most of these "Debit" only signs are really saying "Interac only", but because for 30 years Interac was the only provider of Debit cards in Canada, it became the common vernacular to say "Debit" when you mean "Interac".
Now most merchants have to work with two companies, visa and mastercard. Want to accept russian MIR cards? Well, in some countries you're not allowed to, and in some, you must, since visa and mastercard don't work there. Now if you add a european company to the mix... whill their cards get accepted in south africa? What about in eg turkey? China? Will whatever indian alternative is get accepted in france?
Currently, with a visa and mastercard, except for maybe russia and iran, you're pretty sure it'll get accepted at least somewhere in any urban area you visit, so you won't be hungry and have somewhere to sleep. If my bank replaces my mastercard with the EU alternative, I won't be that confident about that for quite a few years.
On the other hand, cash is still the king of everything everywhere... somehow some politicians are trying to get rid of that for some reason.
Most merchants don't work with Visa and Mastercard, they work with payment processors like Fiserv, or other middle men even further removed from the card networks, that already abstract all the different cards (including existing local debit cards) away into a unified flow.
Sure, there's a gajillion of those processors all over the world, and they somehow all work with mastercard and visa.
Diners club? Well.. "it depends". Many don't work with it.
Indian, russian, chinese, cards? Maybe in india, russia and china, but you shouldn't expect it to work "everywhere" like visa and mastercard. Same will be true for EU cards for quite a few years, especially if the system gets fragmented into many different companies using many different systems, and you'll always wonder if your german card will get accepted in Algeria like your friends' french card is.
I can't disagree that they have a moat, but it's a hard problem and if it were as easy as you say somebody would be disrupting them already to get a share of that $24T.
Just dealing with fraud is a major problem in itself.
I'm surprised that Canada doesn't seem to be talking about doing this.
We've already got a strong payment processing brand with Interac, it's used daily for millions of debit transactions, and supports all the features you'd expect (in Canada) from a payment card (tap, chip&pin). There's also the MasterCard Debit and Visa Debit branding which seem to bridge debit transactions to the MasterCard and Visa networks. And there's already Interac-capable terminals basically everywhere that Visa and MC are accepted.
My thought is that Interac should launch a credit card brand called "Interac Credit". The actual credit would be via the banks, just like it is with Visa and MC. Interac already has the relationships with merchants and banks to make this happen, and it has the mindshare with consumers to make it successful.
The Canadian government has been trying for about 4-5 years now to get Canadian banks to embrace Open Banking, which will allow these sorts of products to be built quickly.
The banks have consistently refused to do anything, because they don't want any change that threatens their oligopoly. Canadian bank services are more or less the same as they were a decade ago.
The current government will have to show that it can resist rich people lobbying in this regard, before any real change can happen.
Canadian banks still live in 2006. They can't even make EMT transfers more convenient, so people could request a payment or pay with QR.
Sometimes I feel like they don't actually refuse to do things, maybe they are not capable to improve. Something in their chain of command is broken and doesn't let them change.
Indeed, no one seems to ever talk about the banking monopoly in Canada so it's not a big political issue. It's not nearly as controversial as the telecom or airline monopolies.
There are some new banking startups popping up in Canada like Neo Financial (from the guys who made SkipTheDishes) but they are online-only and have limited integration with stuff like Plaid.
This would still rely on Visa/MasterCard allowing dual-branded credit cards for overseas transactions, which isn't a very common arrangement. The only market that has this is in Asia where there are UnionPay + Visa/MasterCard dual branded cards and I suspect that the reason they allow this is because the market is huge, especially compared to Canada.
Also Interac does not do online transactions outside of some very specific merchants that take Apple/Google Pay transactions. This is how Interac reduces fraud risk, which is why interchange rates for Interac are so low.
You can do this in multiple steps. Start with a credit card usable only with Canadian merchants, which will cover a great majority of transactions of a great majority of Canadians. I'll have an MC for travel and the ordering from non-Canadian merchants, and this Canadian credit card for the other 95% of my expenses. If a significant percentage of Canadians have such a card, major non-Canadian services will add it as a payment option (e.g. ChatGPT or Claude). Then you branch out by either joining or co-branding with the EU credit card company if such a company succeeds.
A world with a patchwork of payments processing options will look different for travel and business, in some ways worse, but such is life in a "multipolar world" which the Americans elected their leadership to conjure up.
Even putting aside issue of geopolitics, it's quite baffling to me that every country besides China and Russia are paying ~0.2% "sales tax" to corporate America.
Visa: 1.3% to 2.3%
Mastercard: 1.5% to 2.6%
Mastercard: 2.3% to 3.5%
Nothing precise as it depends on whether that's debit vs credit cards, and the type of card. Also volume related and what the bank may subsidize, or take on top.
The payment processing rates offered vary by country. It rarely goes above 1% in Germany unless you're really not shopping around or are really low volume.
A % of that also goes to the issuing bank*, not to MC/Visa, so I suspect the mentioned 0.2% is talking about what MC/Visa has as their cut.
*: That's also how banks can profitably offer things like cashback.
The fees for those are still often comparatively lower to the US rates posted above. Credit cards are also not popular here, so while I do own one, I suspect average % of a merchant still remains low.
Amex also offers pretty good rates to low-volume merchants here to have more acceptance to my understanding.
Visa's processes ~$14T in transactions. At 0.2% thats roughly ~$28B in revenue (VISA posted ~$40B in revenue in 2025) versus 2% is $280B in revenue.
EDIT: The 2~3% you're talking is the payment processor fees which get divvy'd out to acquiring processors, acquiring banks, gateways, merchant processing, etc. etc.
Visa and MC were capped at 0.5% for the network before that change went in as well. But we have no idea what actual rates were beside the cap as they were negotiated with each card issuer based on their risk profile and customer base.
This. And don't forget that most businesses have in their payment processing contract terms (set forth by Visa/MC ) that prevent the business from directly charging card users the card processing fees. Which means that everybody - even cash users - pay for those fees. What a racket.
I think this is one of the biggest issues here, that the EU is actually forbidding to charge credit card users the transaction fee. On the contrary, it should make it mandatory that card users have to pay the transaction fees themselves. This would automatically force card providers to reduce their fees, because nobody wants to use cards with high fees. It would also get rid of nonsensical cash-back systems.
The EU also regulated the fee to be very low, something like 0.1% of the transaction value, comparable to the implicit costs of handling cash. If it was America–style 5% then it would be a problem, but at 0.1% it's not.
The official Apple store (McShark) in Vienna used to pass this ~3% charge on to consumers (a few years ago, not sure if it's still true today - and also there is a real Apple Store now).
There was a recent case of one Serbian company being sanctioned by the USA, and Visa and Master refused to process payments. No big deal, since even a small country like Serbia has its payment system called Dina that kept the company afloat.
There's not a single technical reason for bigger and richer countries to develop their own card payment system. It's not rocket science. The only reason they didn't is their regulators wanted a dependency on the USA payment processors.
I don't know for France, but in Germany, they did everything they could to reduce Girocard usage. Today, every bank offers Visa debit, but if you want Girocard, it's difficult to find a bank that offers it.
There's nothing wrong with having national cards, since >90% of transactions are national anyway. That's how German Girocard worked for decades until the coordinated push to switch to Visa Debit happened.
And the government did nothing to protect domestic payment systems. As if they value foreign dependency more than the independence.
Not sure Wero will succeed, but European country-specific mobile payment systems like Swish (Sweden), Vipps (rest of Scandinavia), Bizum (Spain), iDeal (Netherlands), Bluecode (Germany and Austria), Twint (Switzerland), BLIK (Poland) etc. are also working on interconnectivity under the EMPSA association. Combined they already have 110+ million users.
Wero is like a monolith, while EMPSA is more like mobile phone roaming. If I would bet, I would bet on EMPSA.
Like sepa, this initiative can be forced by law and made open rather than tanken hostage by large cooperates, which may then exclude parts of the market.
Very European approach: the winner is chosen by law. Is Wero really a success? According to this article, in 2024 it processed over €7.5 billion.
Polish BLIK, which is not even mentioned in the article and which has joined the EuroPA Alliance, processed €83 billion in 2024, with a 30% y/y increase in H1 2025. I understand that BLIK is much older, but it invested significant effort and money in marketing and promotions while delivering a good user experience. BLIK is now trying to expand to Romania and Slovakia, yet Wero is getting all the hype on Hacker News. Maybe this is a case of East, South, and West Europe being treated differently. Is the only “European” solution one that comes from Western Europe?
We wouldn't even need these services if instant payments were the norm. I guess we have to thank the Visa and MasterCard lobbies for this to happen at least 10 years too late.
When India moved to UPI in the last few years something very interesting happened. The same devices that accept UPI (usually some android based POS) also accepted a plethora of cards. Previously merchants would be hesitant to take anything other than cash or charge 2% for visa/mastercard. But with wide adoption of digital payments they now just accept any payment with the goal that they don't want bad reviews and/or lose customers.
Point being that with a cheap alternative, it's actually much more convenient now to use a Visa or Mastercard especially with tap to pay because with competition being so high, the diversity means people allow all payments.
The competition is high with online ordering (which accepts cards), so the incentive is to not lose customers. in fact people have become so desperate for more sales that they would let you take something and pay later but not lose you as a customer.
Small businesses generally dont because the setup for a merchant POS is quite a bit of hassle. In fact maintaining that device also costs money. A UPI merchant on the other hand is quite easy and free from what I know. This setup with visa mastercard might change in the future (with square like devices). However there is also a security problem so fraud might increase with that. Very interesting times for visa and mastercard who have basically not innovated since their existence and yet somehow have grown so big.
If previously 3 merchants had visa / Mastercard out of 10 who only accepted cash or cheques, then with UPI all 10 now accept UPI but 7 or 8 accept a universal POS which allows more type of payments. If previously 10% payments were via cards that costed them 2%, then now if sales are 2-3x because of UPI and online payments, letting go of that 2% for even 20% share of cards is fine because they captured a larger market with more sales. Not so long ago, India was a cash dominant economy so UPI actually opened that up. UPI actually helped Visa and Mastercard. Credit card spending has gone up a lot because of digitalization.
If in EU a local payment system captures the cash market, then the habit of using digital payments will actually also help Visa and Mastercard make more sale.
I currently don't have a credit card, but when I do, I find paying by a Visa/MasterCard much more preferable than UPI, simply because it's easier by tapping.
I was there when this started to roll this out - I remember a lot of nice pine labs payment terminals - it was really nice that I could begin to depend on my American Express card there more than trying to finagle cash (2000inr bills get you a lot of frustrated service workers). I say AmEx because they tended to work much better than my visa there.
> The core problem has always been fragmentation. Each EU country developed its own domestic payment solution — Bizum in Spain, iDEAL in the Netherlands, Payconiq in Belgium, Girocard in Germany — but none could work across borders. A Belgian consumer buying from a Dutch retailer still needed Visa or Mastercard. National pride and competing banking interests repeatedly sabotaged attempts at unification.
> The network effect compounds the challenge. Merchants accept Visa and Mastercard because consumers carry them. Consumers carry them because merchants accept them. Breaking that loop requires either regulatory force or a critical mass of users large enough to make merchants care — which is precisely what the EuroPA deal attempts to deliver by connecting existing national user bases rather than building from scratch.
Let's be real: The difference this time is the open hostility from the US towards Europe.
It's now been about a month since a White House deputy chief of staff for policy and homeland security advisor openly talked about/advocated for taking Greenland by force. POTUS was vague for a while.
Northern European nations sent like a hundred military officers to Greenland. POTUS then threatened those nations with, wait for it, tariffs.
Then the markets crashed and Rutte/Nato provided a face-saving de-escalation path.
> “Breakup” seems a bit exaggerated considering the % of payment volume which might switch to the new system.
Brazil introduced Pix in 2019, it's now the most used payment method for all transactions nationwide, ahead of both cards & cash.
India introduced UPI in 2016, it now handles >80% of digital payments there, and handles more transactions a day than Visa does worldwide.
It's totally plausible to me that a similar replacement could overtake cards completely within a decade. The lack of cross-border support means "Pay with Bizum" is a niche feature that's only useful in Spain, but if "Pay with Wero" becomes an instant & ~free payment method that works for hundreds of millions of users then it's a very different ballgame.
And also much of East and Southeast Asia as well: AliPay (CN), Kakao (KR), PayPay (JP), JKO (TW), GrabPay (SG/MY), QRIS (ID), etc. with various interop compatibility between them. If you build it they will come.
Russia switched 100% of its payments seamlessly, no reason for the EU not to do the same. Build up the network and tell banks to use that network even for transactions initiated with Visa/MC cards. At that point cards are still usable, but effectively a piece of identification plastic not directly controlled by Visa/MC anymore.
Italy has a similar size economy as Russia and they also have their own payment network. Technically there is nothing special. Countries have to come together and decide on a solution together.
On the other hand, if you step back a little bit, Russia is currently stuck in a Sovjet civil war, so I don’t think the Kremlin way is that great.
It is a good way if you want to protect yourself against pressure from the US. Sure, the Kremlin did it for reasons that don't exactly paint them in a good light, but this has nonetheless become a real risk for Europe as well.
It's not seamless if it includes a war, global isolation, exodus of all business and disconnection of the banks. This means they were left with no alternative, in which case, sure, it's 'seamless' to use the only alternative method.
Europe will have a lot of friction with consumer habits and Visa will always be relevant for buying things from outside EU. These are all competing entities which hate anything that makes them seamlessly lose their business.
That's not how it worked, Russia prepared well in advance before the war (admittedly, after Crimea-related sanctions scared the hell out of them in 2014). When the 2022 sanctions dropped, transactions within Russian borders kept working seamlessly because the banks were already using the Mir network for those regardless of card types, i.e. you can still use your Russian-bank-issued Visa today for internal purchases. And I firmly believe that Europe needs the same kind of security for its digital payment systems, something akin to IBAN that solved this for EU-wide bank transfers (which is why I'm not sure if it's wise to use some random commercial product as a base).
Of course, right now nothing can dethrone Visa/MC for international payments, besides perhaps crypto in very limited and often shady scenarios. And Europe can't really do anything about that. But that's a different problem altogether (one that annoys me to no end as a frequent purchaser of digital products from Japan).
Nitpick: IBAN is a global identifier for a bank account. The transaction system where you enter an IBAN is called SEPA payment, or SEPA bank transfer, or something along those lines.
Just like I access hacker news by the Internet, not by IP address.
A lot of European online stores support asynchronous SEPA transfer. You complete your order, they issue a code and amount of money to send. You send the money with that reference code attached and they don't ship it until they get the money. It works for online order because you might be waiting a week anyway.
> This is about cross-border payments within the EU.
no it isn't
for bank to bank payment your statement might be true
but this isn't true for EC card payment and most online payment
_all_ EC cards either use the Visa Payment network and secure modules or the Mastercard one (but by now it's mostly Visa in most places). Sure they have your banks local branding but it's Visa anyway.
This also applies to payment terminal, most (not all) go through the Visa payment network to process payments.
And even in the same country a lot of online payment either goes through credit cards (again mostly Visa in EU) or PayPal. This isn't technically needed at all but due to fragmentation whatever alternative you want to use is just sometimes available.
Which is where Wero comes in:
- try to reduce fragmentation by making it a cooperation across many banks (of which most had their own failed PayPal alternative)
- onboard people on (local) online banking and private Phone2Phone payment (e.g. bill sharing)
- then (now) expand to pushing some payment terminal providers to support it with Phone based payment. There are multiple initiatives for it.
The later part is possible due to 3 reasons:
- payment apps on phone bypassing secure module monopoly nonsense related to EC/Credit cards and visa
- a lot of the in-person checkout systems of small businesses are now a tablet + separate cash register + EC terminal. This means that even if the EC terminal doesn't support Wero the payment system can still do so through their tablet.
- Also I think some of the wider used payment terminal in large EU specific chains can get Wero support with a software update.
Still it's by far not a perfect situation:
- still too much fragmentation/to little adoption by banks
- "old" payment terminals and (physical) checkout systems which are bound to Visa and can't easily be updated
So there most likely won't be a hard break anytime soon, and your EC card will likely continue using Visa secure module and network for a very very long time.
But having a technical working alternative which can slowly start eating market share is already a huge step forward.
Can I use it without installing their software on my smartphone? Question is rhetorical - of course not, and your smartphone also needs to pass Google's or Apple's remote attestation schemes. Good riddance.
Is it really just PayPal left offering a sane online payment service?
The use of a phone number rather than a username seems like a BIG downside.
I’ve moved countries several times and as a result been forced to change my number several times.
This causes a huge headache with any service that relies on phone numbers, especially two-factor etc. Phone numbers should be thought of as ephemeral while usernames can persist.
Biggest banks here refused to support Apple Pay and worked hard on legislations to open NFC access. Now we can pay with no fees to Visa/Mastercard or Apple even from our phones.
There's implementations for this in most European countries (iDeal/Wero, Bizum, MultiBanco, BanContact have been mentioned). What's missing is a unified standard that works across all European webshops and banks.
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.
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.
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).
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.
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.
I suspect they aren’t doing this (just) to avoid fees - it’s more about national security in a world where the US might stop being a reliable ally, and in a world where the US has used withdrawing Visa / Mastercard as a strategy to weaken enemy economies.
I think the recent stories of the International Criminal Court judge being forbidden to use VISA and Mastercard, making his life somewhat more challenging, did make some politicians aware of the risks.
Yeah but now we have instant EU-wide SEPA transfers for free, so it's not all stupidity! Also it took years to implement - banks are slow at implementing new tech. WERO is still very new, if it takes off, eventually banks will hopefully support it.
Last August US threatened tariffs on Brazil over their Pix system. One of the reasons given was that people using Pix instead of credit cards deprived Visa and Mastercard of fees.
When anything or nothing at all can draw tariff threats at any time it stops making sense to worry about what may or may not anger an insane clown overseas and you should just do the best thing for your nation and its people. Reducing dependence on the US is the smart thing to do and retaliation would just make it more obvious how important it is to get away from the US to the extent that you can as fast as possible.
My wife found out her new card was Discover debit card right before her trip to France. Her bank sent her a new card unrequested. In an abundance of caution she activated the new card which automatically cancelled her debit Mastercard. Then when she landed in CDG found the new card didn't work anywhere.
This is what these peeps advocating for an "EU-based payment system" don't get, as they typically don't travel worldwide. VISA + Master just work. Have a debit plus credit for one each. (And no, Google / Apple pay won't do it, everyone who calls themselves a "hacker" should know that you too often can't even pay for transport using a rooted phone).
Aside from what the other commenter said about the hybrid systems, you proudly state that you have 4 cards at minimum, but having a system that would work continent-wide for ~98% of all money you spend would not bootstrap if someone needed to be bothered with having a separate travel card, which would rest in the drawer or as second Apple/Google/Garmin Pay choice most of the time?
Most adults I know have 2+ cards already, it's just that they were issued by Master Card or Visa. American Express and Discover still exist, despite definitely not having worldwide coverage.
We do actually. The German Girocards were, until Maestro ceased to exist, often co-issued as Maestro + Girocard, and global acceptance was pretty good under the Mastercard network.
There are examples of other co-branded national payment systems out there (troy + Discover comes to mind).
If a European payment system (with cards, at a store) is to exist, then visa/mc will still want a piece of the pie by at least playing along to remain as a co-brand and taking their cuts from international payments.
Yeah, really dumb move on the part of Chase bank. They'd previously marketed their accounts as being geared towards international travelers, but now their cards can't be used in much of the world.
Well, “just” as in “recently forced everyone to replace their cards” also works. My CapitalOne mastercard was deactivated January 14, even though it was still valid through 2030.
fwiw: Discover technically goes through amex network in EU, and amex acceptance varies from pretty good (e.g. germany) to pretty awful. Completely incomparable to visa and mc acceptance ofc.
Even if somehow EU is able to pull this off it would be a nightmare in terms of user experience. I live in Germany and this is how I would imagine it would work base on my experience in Germany.
1. You first need to install an app (because you want to use tap to pay)
2. Then you need to download another app to authenticate the first app
3. But to set up the 2nd app you need to wait for an actual physical mail which contains a code.
4. Then you set up the 2nd app, but then again it asks for you to do a KYC using your Id Card.
5. Now you need to download another app to do the KYC using your Id, but it asks for another code which you receive by physical mail when you got your Id years ago, but you have no idea where that mail or code is, now you have to request for another code and wait like 2 weeks till you get a physical mail with that code....
If you have the cash its super easy. Need to have at least 300k euro frozen in the account, go through the process of getting EMI (european money institute) licensed and start fiddling with GNU Taler.
I'd rather have a GNU Taler based system (private for consumers, transparent for the business), but given the overextending urge to destroy any remaining privacy by EU governments, I doubt it would ever happen.
Instead, we are getting a digital euro, a fully dystopian abomination.
As far as I know the "digital euro" should allow for offline payments. At least in principle I should be able to offload to an offline/on-device wallet and give money to anyone without the servers knowledge.
But I'm sure there are plenty of villains and idiots that will try (and succeed) in diluting those principles and will get some dystopian (trace everything) version of that.
Crypto gets a lot of hate... but this really puts its utility into perspective: No counterparty risk with random banks or foreign companies, near-instant settlement, vastly lower fees, immediate fx conversion.
> neither Visa nor Mastercard will sit idle while Europe tries to dismantle their most profitable market.
Earnest question: is the EU really Visa and Mastercard's most profitable market? I would have expected it to be the US, both by customer volume numbers and in terms of regulatory environment (i.e. the US allowing payment processors to take a larger cut).
One not-so-fun fact is that when the US sanctions anyone, their ability to transfer and use money via Visa etc. is taken away. In the modern world, being cut away from even using your debit card is a huge, massive hassle.
It is one of the many different ways being sanctioned makes life more difficult. I can't imagine the US being too keen on giving up those powers.
Whenever people say Bitcoin has no usecase, this is exactly my usecase. Of course, only in conjunction with Lightning (a layer 2 solution building on Bitcoin with anonymity and instant transaction settlement). Censorship-free, no relying on third parties, free and open source software to make and receive payments. Yes, I know, bitcoin is too volatile. The reason that it is volatile, is because it has almost no adoption compared to the Euro. But lightning can also be used to transfer stable coins - i.e USDT works via bitcoin taproot asset management. Now I don't trust a El Salvador baed company and thus not USDT, but the EU could fix this by having a central bank issued stable coin pegged to the Euro. The entire software stack would be based around taproot asset management and lightning, done in the open by the people, for the people.
The concept of a physical card is obsolete. That North Americans and western Europeans for a good part still use them is just stickiness of the infrastructure, and habits.
Developing countries have mostly leapfrogged to total contactless payments.
In South Aast Asia, you typically scan a QR code and approve a payment from your own phone. Far less fraud as a result. Nobody is able to touch your card, you don't have one.
Europe likely identified they better make the jump.
I can assure you that south east asians also still have cards, despite not making most of their payments with it. Not all ATMs support withdrawing with just a QR code from all banks, for one.
There are benefits to non-QR based payment systems, such as not wanting to pull out your phone, open an app, scan a QR and approve to make a payment that takes me 2 seconds with regular contactless payments.
Physical cards are also a nice fallback to have in cases of running out of battery, theft, etc.
I don't really understand why this is better than tap and pay with a card. Why would I want a single point of failure for both my communications and my ability to make payments?
I've paid numerous time using the swiss counterpart, Twint, in small shops. For some like the farm I used to buy vegetables to it was their only supported payment besides cash because they deemed the card systems too expensive.
The same way chinese tourists can already pay with alipay in many retatail outlets in europe, you can already pay with such european systems on Aliexpress. More are probably comming.
Wero is just one of many systems available that allow individuals to make transfers easily and almost instantly.
There is also Bizum in Iberia and Blik in Poland.
These instant phone-to-phone transfers are very popular, especially among young people who rarely use cash.
Wero itself was launched by large banking networks because they had no solution to compete with neo-banks such as Lydia, which was a pioneer in this type of service.
France has its own payment network, Carte Bleue, which dates back to when the very first smart cards were introduced, but it is not European.
The real problem is therefore not a lack of projects, banks or services, but a lack of interoperability, too many players and geographical fragmentation.
Europe is not fast, but it has worked wonders with SEPA transfers. It needs to put in place a clear timetable imposing the interoperability of these services. The absence of plastic cards is absolutely not a problem, just look at WeChat, Alipay, etc.
I think the misunderstanding is that when I say “credit card,” I do not mean a physical card. I have not used a physical card in years. In the US, when people hear Mastercard or Visa, they usually associate that with a credit card (virtual or physical), meaning the money is not taken directly from your bank account. You pay the balance later, which gives you credit and strong dispute protections.
Debit or ATM cards are different. They pull money directly from your account and can exist independently of Visa and Mastercard. For example, some credit unions still issue ATM only debit cards that are not part of the Visa or Mastercard networks.
> In the US, when people hear Mastercard or Visa, they usually associate that with a credit card (virtual or physical), meaning the money is not taken directly from your bank account. You pay the balance later, which gives you credit and strong dispute protections.
Europeans use these dispute protections much less, so Visa/Mastercard are mostly seen as expensive pass-throughs.
It's for online payments only. You click on the wero button on a website/app, if on mobile takes you to your banking app (on desktop, you scan a QR code), you do MFA on your banking app and confirm, and the payment is done.
Wero are not in the business of issuing cards, though obviously they could get into that business - just like UnionPay did in China. I suspect there would be a lot of inertia there, as card payment fees are capped in Europe anyway.
But cards are offline from the perspective of the consumer. Sometimes even on the merchant side of things. Not that it is an important distinction nowadays--but I have definitely tried to pay with a merchant's own app-based payment solution that refused to load due to a bad cellular connection. I haven't looked into how Wero will handle this.
Wero bought Payconiq which allow to pay at the physical terminal with a QR code to scan with your phone. So, they can cover the physical payment without having to issue cards.
Neither are visa/MC for the most part. Mostly debit. ;) this isn’t really about the card anyway but the network behind it.
This is likely to be similar to the existing European payment systems just wider in scope. There are a bunch already it’s just fragmented and country specific. Sepa wero ideal girocard crates bancaires
I have always wondered what kind of shenanigans Mastercard or Visa did to convince so many banks to use their networks for debit cards.
When did banks actually make that switch?
It must be relatively recent, because I remember not that long ago my credit union ATM card was not part of Mastercard. Now I have a new one and it suddenly has a Mastercard logo.
We have MobilePay - looks like it’s made by Vipps. It’s my
preferred payment method these days and works great for things like farmer markets etc. zero fees and you can verify you got the right counterparty in seconds. I also pay e-commerce with it. The technology is not complicated to have an excellent payment system! People who think getting rid of Visa is impossible have not travelled anywhere - I even see people talk about PayPal as a good example smh
Like the article mentioned many EU countries have their own payment systems. The challenge is not to build something from the scratch but rather to make existing solutions interoperable. The first talks about cross-border integrations started many years ago but they went very slowly. However, some work is being done, just a week ago a first transfer was done from Spanish Bizum to Polish Blik.
I m wondering why they are trying to build a competing product rather than a successor product?
The digital euro could be a good candidate here and it also aspires to have cash-like privacy features. It's also mentioned in the article as separate and hopefully non overlapping product.
CBDC euro upends the entire economic structure of the entire union, which could be very good or very bad and definitely needs to be approached with extreme caution. But card networks used with ordinary banks are a known quantity.
2026 is really the year of USA going down in history.
US dollar is collapsing, its stock is having a hard time, Europe is ditching US techs like Google and Microsoft and now this.
Visa/Mastercard are the biggest evil.
Why do you think Trump got pissed at Brazil having its own payment system without Visa/Mastercard network deleting billions in revenue from Visa/Mastercard
The problem major problem is already mentioned: Each EU country wanna have their own independent system.
Nothing prevent the countries from doing that but it must talk within the same payment network so people in the Netherlands can buy from Italy using their own payment system.
Own payment system is different than payment network :)
> Creating a viable alternative to Visa and Mastercard requires “several billion euros” in investment
Just the transaction processing fees going to VISA and Mastercard now would probably pay that back within a few years. Also, we're talking about all or almost-all European countries. So it doesn't sound like that much.
> Low interchange fees under EU regulation make profitability difficult.
Mandating that businesses which accept US credit cards must accept the European payment card would take care of that. Actually, maybe that's not necessary, it's probably enough to mandate that companies making card processing tech which supports US credit cards must also include support for this card; and businesses would just get it with their next system upgrade / terminal replacement or something.
> Consumer habits are deeply entrenched
I 'like' how people are described as "consumers", as though every payment is for consumption.
Anyway, habits are not that deeply entrenched. Didn't people adopt those country-level payment cards? Don't people occasionally change credit cards? It's not even a change of tech, it's just yet another card.
> and neither Visa nor Mastercard will sit idle while Europe tries to dismantle their most profitable market.
Now this may be a significant factor... they could influence politicians, tech solutions makers (with sweetheart deals if they don't support the new payment tech, or whatever), they can get the US government to make some kind of threat (we've already seen the threat to invade Greenland). So, yeah, there's that.
All banks in the EU are part of their respective national pay schemes. They need to figure out a way for the national pay schemes to add wero compatibility.
I didn't care at all about Wero until Trump indirectly declared us Europeans as enemies. Now I really hope that it manages to replace Visa/Mastercard.
Though at least in Germany we have "girocards/EC-cards" that are not owned by Visa/Mastercard. Some banks are phasing them out in favor of a Visa/Mastercard debit card.
So maybe this is just an attempt to make Wero a bit stronger in comparison to PayPal. AFAIK Wero does not replace a credit card.
The fact that EU sees dependence on American tech in the same way as Russian oil now is saddening and telling.
Americans and American companies had it really good - our tech extracted money from the world, and they were mostly willing to pay for it. And it was an incredible advantage to the US.
But now, it seems that we are happily throwing all that away, for what benefit I do not yet see. Regardless of whether this effort succeeds, why stoke this fire at all?
I would say I hope Americans realize what they’ve done by making their own companies enemies of the world at large, but I’m not holding my breath for any sort of self reflection.
trump is disliked by the majority of Americans, and his actions antagonizing Europe are disliked even by most republicans. this is an obvious fact accessible to anyone who reads the news. he will only be around for 2 more years and will be effectively a lame duck after republicans get crushed in the midterms, starting 2027.
all of this infrastructure Europe claims to want to build will take many many years to realize, particularly at the relaxed European pace. trump will be out of office by the time the EU has held it's fifteenth planning meeting to issue it's first strongly worded letter of intent.
> The Wero app can be installed on any mobile device or tablet running iOS 16 or later, or Android version 9 or later. We recommend updating your device to the latest version of its operating system for maximum performance, convenience and security.
> It is not possible to use Wero via a web browser or on a computer.
What changed between then and now is that plastic cards stopped being the objectively best way to pay. Most countries already have online payment systems that are safer and easier to use than plastic cards - Wero is about putting them under one brand one network. Once this is done and people are familiar with the brand, you need to update terminals to accept Wero, then you roll out a software update that makes bank apps use virtual Wero cards or something like that.
It's not as much about replacing Visa/Mastercard, as it is about plastic card technology becoming obsolete, and the duopoly failing to react to the market because of corporate inertia. Had they created a modern online payment system, Wero would never take off.
Lots of skepticism on how Europe could possibly handle something like that on their own.
NASDAQ (NYC) currently runs on software/systems built and maintained by Stockholm-based developers. NASDAQ merged with Swedish OMX in 2008, founded as Optionsmäklarna OM AB in the 80s.
But more importantly, that walled gardens should be abolished and portability and compatibility of user accounts should be enshrined into law and protected at all costs.
So I guess we'll have a system whose API is "open and interoperable", meaning "spread across 3000 pages of 5 ETSI TS PDfs that nobody can understand, with the only integration environment available after an expensive security audit, and requiring you to send an email to an email address that hasn't existed for the last 5 years."
> Wero lets users send money using just a phone number
Of course, what could go wrong!!
Unbelievable, a chance to make a whole new standard, new system, new everything, but yet we still have the need to tie it to ancient protocols, only to find later it’s broken by design and we start adding all sort of duct tape solutions to make it “secure”..
This is either a completely and entirely stupid move by some boomers living in the 80s, or maybe, it’s intentional to enforce something insecure like a phone number/GSM as a “national ID” to easily track citizens and force them to have a phone number linked to their real life, and I think it’s the second one, the same reason why many “secure” chatting apps still require a phone number.
We have had these apps in various EU countries for quite a while and it's been fine. You can get a prepaid SIM from a grocery store and register it with them, and so on. You can always SEPA transfer the money if you don't want to use this.
It's also more convenient than giving out an opaque UUID to your friend to transfer you money or something similar.
The bigger problem I see with this is it being one more service locked exclusively to Android and iOS devices, but it's the same with most currently used banking apps anyways.
I don't know how the procedure looks like in wherever-you-are but in EU phone number is required to either have a call from agent or to receive verification codes from text messages if bank you've pick offers opening an account on your own. Either way, bank gets all your personal data - you are not anonymous for them.
And the SIM registration requirement in nearly every EU country exists for 10 years now - in my case it was as simple as replying with code to operator's message because they had my personal information already for over a decade. There was a grace period after which unregistered SIM cards become dead - the requirement was dubious but you had to comply in order to call, text. There were "solutions" I've bumped on in depths of the Internet but neither felt serious nor safe.
TBH many European payment apps use the phone number as an ID and people seem to love it. I share the privacy concerns but if I don't want someone to know my phone number I just give them my IBAN.
Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
Can't we have cards for this? In Spain, for example, to use Bizum, you need either an Android/iOS smartphone (and for the Android case, as you use it from your bank's app, it would typically require some Google security assurances - so no Huawei phones allowed, for example) or logging into your bank's website and use Bizum from there, only if your bank allows you to use Bizum via web. And it's not very practical or convenient to do that when you're in a store and want to pay, in contrast to swiping your credit card.
So while I see very convenient gaining some sovereignty from American companies for these payments, I think we're losing it when we will need devices controlled by other American companies in order to use the new system.
This is really a human right issue. No one should be required to carry an attacker-controlled tracking device, especially not for interacting with the government. It's funny that the EU uses all this mobile attestation BS more than the US does. So much for sovereignty and consumer protection. No monopoly Google can build is as good as the government forcing you to accept their terms.
>No one should be required to carry an attacker-controlled tracking device
What about being required to carry a your-own-government-controlled tracking device?
Because the US or Chine government can't harm me in Europe via the data they collect from me, But the EU authorities can if they want to, so naturally I fear them more if they were the ones hoovering my data.
What are the odds they're using this on-shore tech grab to implement their own domestic version of China's social credit score system, to easily get data on their own citizens who commit "wrong-think", without having to through the effort to twist the arm of US entities every time they want to do that?
Food for thought, but I do think we're living the last years of online anonymity, it's inevitable.
The odds are very low. It all depents on the people. So far, the European citizens are very privacy senstive. The European institutions are characterized by a huge devision of power. There is no chance that European instutitions can impose their will against a considerable majority of people. If people turn away from liberal democracy, that's another matter. But then everything is lost anyway.
> There is no chance that European instutitions can impose their will against a considerable majority of people
The EU commission just passed chat control to have government mandated software in every phone
It's substantially neutered from the original proposal, with most of the scary parts taken out. I'd count that as a win as far as how antidemocratic the EU commission is.
https://www.eff.org/deeplinks/2025/12/after-years-controvers...
Given how many world leaders form the west had absolutely the most vile chats with Epstein about doing despicable things to people, I'd totally want chat control but only for our leaders. They certainly proved that's who needs it the most to keep us safe.
If you want to over simplify at least do it right.
> So far, the European citizens are very privacy senstive.
In some areas, sure - like GDPR.
In other areas, absolutely not - like chat control.
As another commenter pointed out, it seems as if government mandated privacy intrusion is OK, while violations by corporations are quickly shutdown. It’s like the opposite of how it works here in the US.
> chat control
The Danish proposal for indiscriminate chat control did not receive enough support and was retracted last autumn. Similar proposals have been put forward regularly over the past 30 years and have so far come to nothing just as regularly.
For the conservative (and sometimes not so conservative) non-experts things like this sound like an easy win. So every new generation of politicians has to be educated about it again.
> chat control
The Danish proposal for indiscriminate chat control did not receive enough support and was retracted last autumn. Similar proposals have been put forward regularly over the past 30 years and have so far come to nothing just as regularly.
>it seems as if government mandated privacy intrusion is OK
Once you give people an outside boogieman(Putin, Trump, Covids, etc) or a self inflicted false flag crisis(surge in violent crime rates for example) to shake them up to their core and put the fear in them, you can then easily sell your intrusion of privacy in their lives and extension of the police state, as the necessary solution that protects them.
When you start lose control of your people because their standard of living has been going downhill for 2 decades and they realize the future prospects aren't any better so they hate you even more, you can regain control of them by rallying them up on your side in a us-versus-them type of game against external or internal aggressors that you paint as "the enemy". The media is your friend here. /s
This isn't an EU or US exclusive issue, it's everywhere with a government issue. The difference as to why the EU people seem to be more OK with government intrusion compared to the US, is that EU always has external aggressors the government can point to as justification for invasiveness and control, while the US has been and still is the unchallenged global superpower so it has no real external threats ATM, meaning division must be manufactured internally (left vs right, red vs blue, woke vs maga, skin color vs skin color, gender vs gender, etc) so that the ruling class can assert control in peace.
Either way, we all seem to be heading towards the same destination.
I agree 100%. Europe is just ahead of us for the time being, but our turn is soon approaching...
Amen to that.
> So far, the European citizens are very privacy senstive.
Only from corporations, but not from their own governments. A lot of Europeans put a lot of blind faith into their governments and the EU, and criticism of these institutions is usually met with accusations of being a bot, MAGA or russian troll.
>The European institutions are characterized by a huge devision of power.
Didn't really stop them passing whatever rules they wanted during Covid, did it? Or today with Russia and Ukraine situation. Sure is convenient that we keep having more and more crisis and boogiemen that governments can leverage to deflect accountability and bypass the wishes of the population, for our own good of course.
>There is no chance that European instutitions can impose their will against a considerable majority of people.
Famous last words. People always can be, and routinely are, manipulated to vote against their own best interests, even if everyone claims manipulation doesn't work on them. The propaganda industry is HUGE. Why do you think Germans supported to tie themselves to Russia's gas and destroy their nuclear power. Was it all their original thoughts or was it a massive campaign of dis-/mis-information designed to get everyone on board the same train? And mass manipulation like this is every other Tuesday these days. See Cambridge Analytica.
A individual person can be smart, but people together as a collective voting block, are stupid, and the elites treat us like cattle, as seen in the recent files.
> Sure is convenient that we keep having more and more crisis and boogiemen that governments can leverage...
The problem with this phrasing is it makes it sound hyperbolic, but it is important to remember the world is large and there are always, in a literal and normal sense, multiple major crises going on at any moment.
People who don't pay much attention to politics sometimes get confused about why crises elevated by the corporate media get ignored. A big answer is becuase they are elevated for political reasons, usually the crisis is fairly routine in absolute terms.
>there are always, in a literal and normal sense, multiple major crises going on at any moment
True, but my point I wanted to draw attention to, is HOW these crisis are handled now, not that there's many of them.
Every crisis now seems to be exclusively used as a vehicle to justify taking away just a little bit more of your freedom and anonymity, or implement more fiscal policies that will leave you footing the bill but just so happens it will be enriching the wealthy as a side effect.
Because such policies shoved out the door in times of crisis, don't pass through the lengthy public debates and scrutiny regular policies have to go through, so it's the perfect opportunity to sneak and fast-track some nefarious stuff in.
I'm not that old yet, but I don't feel like this backdoor was misused to this extent in the past, like pre-2008 I mean (except 9/11 of course). It definitely feels like politicians have gooten of taste and are abusing this exploit now more with every little opportunity.
Tracking device might be the wrong thing to focus on. The US has other ways of messing with foreigners who depend on services provided by US companies, like suddenly cutting off those services in the case of ICC judges.
IIRC, ICC judges lost access to their O365 work email accounts. Worst the US can do to me is turn off my Steam, and Gmail but I can easily live without those.
Now imagine being debanked by your own government because they don't like what you're saying and becoming unemployed, homeless and dead. I don't think they're remotely comparable.
For example, a few years ago, a power tripping gov bureaucrat turned off my unemployment payments over a technicality. Luckily, I had enough money to pay a lawyer to sue them and won, but it was tight. What if I hadn't had the money to hire a lawyer? Since I was in a foreign country, with no family or close friends to fall back on. I was exclusively relying on the welfare state I paid into for years, that then turn its back on me for shits and giggles.
So I don't think you understand just how bad it can be for you if your government decides to turn on you and fuck with you, if you're comparing this to losing access to your work email account.
See the famous case of UK postal workers that got fucked by their government trying to hide their mistakes.
According to AP News (https://apnews.com/article/international-court-sanctions-tru...) at least one judge had his bank accounts closed. So it's not just your own government who can debank you in Europe.
Of course in this judge's case there might still be some banks who are willing to work with him even at the risk of getting sanctioned as there weren't language in the news that he was completely debanked which I assume they would highlight if it was the case.
You most likely use a Windows PC and an Android phone. If Uncle Sam viewed you as a threat actor, he could ask both companies to send you a signed and verified update to either your OS or apps they control, running whatever he wants.
> IIRC, ICC judges lost access to their O365 work email accounts. Worst the US can do to me is turn off my Steam, and Gmail but I can easily live without those.
They lost access to everything american, including Visa and Mastercard. It's in french and maybe not the best source but it's not paywalled :
https://www.tf1info.fr/international/nous-sommes-attaques-le...
> "Payments are mostly cancelled," he continued, "as almost all cards issued by banking institutions in Europe are either Visa or Mastercard, which are American companies."
They are not completely debanked since they can go to the bank and withdraw cash, but it's a crippling situation to be in.
It's all the same. How is suing Google any different, if you instead get debanked by Google for violating their "terms"? The only solution is untraceable, permissionless money, like Monero. Why do you think governments try so hard to ban it?
Being de-Googled is a hardship, though there are replacements for virtually all its services. I acknowledge you are well informed on this topic.
It is not unreasonable for governments to pursue avenues for laundering money. I recognize that you likely don't believe governments should prosecute money laundering, but that view is not aligned with the majority of citizens in your country.
After a fair trial and appeals process, right?
> if you instead get debanked by Google for violating their "terms"
Since when is google a bank?
>The only solution is untraceable, permissionless money, like Monero. Why do you think governments try so hard to ban it?
Because untraceable currency is mostly used by criminals for crime.
Your bank (like most European ones) requires you to pass attestation to use their services. If you don't accept Google/Apple's terms, you can't access it without extreme difficulty.
I can always access my bank via a web browser or even in person at the teller at a branch somewhere, or as a last resort via snail mail from attorney, but most importantly even if I get locked out somehow by google, the account still runs and I won't be homeless as my salary and rent auto-payments keep going regardless if you can access it or not.
How is this comparable to your government debanking you meaning that no bank, landlord, layer or job will touch you?
I... don't think you understand debanked. There is no movement OUT of your account. Deposits will be processed all day long. The intent is to tie up access to as many of your assets as possible. If you think anything of yours will just keep on going if you end up debanked, you're sadly mistaken. In addition, based on the U.S. Bank Secrecy Act as amended by the PATRIOT act, covered entities are forbidden from disclosing to you anything about why your account is frozen.
It's as close as you get to a complete shunning from modern society. You're reset to the cash you hold on you and keep custody of. And yes. In the U.S., the list that manages who can and cannot transact is centralized under OFAC. So it is at the whims of Executive whether or not any financial activity can be done with you.
It's less severe for sure, but I'd rather live without undue interference based on someone else's whims, unless I broke a law.
Carrying this device is the key here. Eventually we all need to carry it around, track us everywhere.
Yeah it seems that some politicians have noticed that they can enact a lot of self serving authoritarian legislation that wouldn't fly otherwise if they push it as populist independence-from-US thing. Can't let a good crisis go to waste, of course.
One only needs a few looks at what the EU Commission has been doing lately to see that if left unchecked their plan is a UK-like total surveillance state.
I don't disagree but that wasn't the point here. The point is they are handing even more control to a different US entity. Putting my tinfoil hat on, I assume the authoritarians are intending to simply buy the data from the American companies to circumvent legal restrictions, as in the Five Eyes arrangement.
> It's funny that the EU uses all this mobile attestation BS more than the US does
Attestation in on itself isn't unwarranted which (to me) is an important security measure. Attestation as commonly implemented on Android via Play Integrity (the way banking apps are known to do) is restrictive, sure: https://grapheneos.org/articles/attestation-compatibility-gu... / https://archive.is/snGEu
> important security measure
It's a security measure against the owner of the device, in other words, an attack. Would you be okay with me using a remote control to forcibly slow down your car so I can merge? Using attestation this way is fundamentally incompatible with ownership. If the bank wants some assurance about a device, they need to sell or issue one to me, like credit cards or point of sale machines, which are explicitly not your property.
The fact that the assurance is provided by a third party you have little recourse against just adds insult to injury.
>against the owner of the device
Would you consider MFA to be a measure against you, the owner of the device, because it makes it harder for you to login?
>If the bank wants some assurance about a device, they need to sell or issue one to me
They are offering you free software and are operating under a security model tied to these specific devices. You're still free to walk into their branches, or use their physical cards, if you prefer not use their limited selection of devices.
>Would you be okay with me using a remote control to forcibly slow down your car
Car manufacturers do this as well though. Some of this is for the benefit of their customers (preventing theft from easily cloned keys). Some of this is not for customer benefit, like locking down infotainment systems.
Banks however are only interested in preventing fraud.
> If the bank wants some assurance about a device, they need to sell or issue one to me, like credit cards or point of sale machines, which are explicitly not your property.
In this example, a banking app is not making the entire Android device non functional when it refuses to work when remote attestation like Play Integrity fails.
An important security measure for who, though? The servers at the bank should "never trust the client" in case the attestation is bypassed or compromised, which is always a risk at scale.
If it's an important safety measure _for me_, shouldn't I get to decide whether I need it based on context?
I think it's fair for banks to apply different risk scores based on the signals they have available (including attestation state), but I also don't want the financial system, government & big tech platforms to have a hard veto on what devices I compute with.
It's an anti-brute-force mechanism. It's not for you, it's for all the other accounts that an unattested phone (or a bot posing as an unattested phone that just stole somebody's credentials via some 0-day data exfiltration exploit) may be trying to access.
Sure, banks could probably build a mechanism that lets some users opt out of this, just as they could add a Klingon localization to their apps. There just isn't enough demand.
If you work on mobile apps you will notice that full attestation is too slow to put in the login path. [This might be better than it used to be, now in 2026].
I don't think a good security engineer would rely on atty as "front line" anti brute force control since bypasses are not that rare. But yeah you might incorporate it into the flow. Just like captchas, rate limiting, fingerprints etc and all the other controls you need for web, anyway.
I know I'm quibbling. My concern is that future where banks can "trust the client" is a future of total big tech capture of computing platforms, and I know banks and government don't really care, but I do.
> total big tech capture of computing platforms
Correct. And the end of ownership, privacy, and truth too. If something can betray you on someone else's orders, it's not yours in the first place. You'll own nothing and if you aren't happy, good luck living in the woods.
> you work on mobile apps you will notice that full attestation is too slow to put in the login path
Hm, Play Integrity isn't that slow on Android, from my experience.
> don't think a good security engineer would rely on atty as "front line" anti brute force control since bypasses are not that rare
I'm not privy to device-wide bypasses of Play Integrity that ship with Trusted Execution Environment (which is pretty much all ARM based Androids), Secure Element, and/or Hardware Root of Trust, but I'd appreciate if you have some significant exploit writeups (on Pixels, preferably) for me to look at?
> My concern is that future where banks can "trust the client" is a future of total big tech capture of computing platforms
A valid concern. In the case of smart & personal devices like Androids though, the security is warranted due to the nature of the workloads it tends to support (think Pacemaker / Insulin monitoring apps; government-issued IDs; financial instruments like credit cards; etc) and the ubiquity & proliferation of the OS (more than half of all humanity) itself.
> for the Android case, as you use it from your bank's app, it would typically require some Google security assurances - so no Huawei phones allowed, for example
I don't know about Huawei, but actually most (all?) of the banking apps in Spain should work on a non-Google-certified Android builds. There's an community list tracking GrapheneOS compatibility at https://privsec.dev/posts/android/banking-applications-compa... and all of them currently appear supported just fine.
GrapheneOS in Spain?
https://www.androidauthority.com/why-i-use-grapheneos-on-pix...
> Police in Spain have reportedly started profiling people based on their phones; specifically, and surprisingly, those carrying Google Pixel devices. Law enforcement officials in Catalonia say they associate Pixels with crime because drug traffickers are increasingly turning to these phones. But it’s not Google’s secure Titan M2 chip that has criminals favoring the Pixel — instead, it’s GrapheneOS, a privacy-focused alternative to the default Pixel OS.
EDIT: Previously on HN: https://news.ycombinator.com/item?id=44473694
> Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
The article starts with Wero right off the bat, which a pan-European rebrand and continuation of the Dutch Ideal. The Dutch have been using Ideal everywhere, and you usually use that to pay online. It redirects you to your bank to acknowledge the transaction, and most bank have auth methods where a smartphone is optional. Most often used for sure, but optional, and you can complete the transaction with a hardware reader and your debit card as well.
The only exception are the neobanks like Bunq, which actually are smartphone-only. That one in particular is great if you appreciate the CEO and staff keeping a personal eye on your transactions (no kidding).
On Portugal we have the Multibanco network, which already provided Internet like services for buying stuff on the terminals and eventually graduated to have online payments as well, however only in Portugal.
Likewise, in Germany we can have SEPA for most stuff.
And in Greece there is Viva.
Problem is getting something that actually works across all European countries.
The problem isn't just getting something that works across all European countries. It's getting something that works globally.
While we may make most of our payments within EU, basically everyone still occasionally pays for something outside of EU, either online or when they travel. This means if the new thing only works in EU, every European will still need and have a MasterCard/Visa even if they use it less often than before.
This is still a massive amount of leverage - MC/Visa still have the ability to block payments made from EU citizens/companies to outside.
Many (most? all?) of the payment systems I’ve used over the years can interop with Visa or Maestro. Case in point: my Bancontact cards can pay in any Belgian business even if they can’t afford the better machines that do VISA, but my card also has the VISA logo. Same in Portugal and Germany.
You can buy things from your local Amazon or national equivalent that come from outside using this systems, so, you are not so restricted to EU sellers.
I suppose the most problematic would be traveling. I recently when outside the EU and was surprise how smooth the process was using my Visa card, to the point I didn't use any local currency.
On the other hand, I recently buy books from the UK and it get stuck for two weeks in customs, and it had nothing to do with the payment platform. I had not realized how difficult is to import something from outside the EU, even for personal use.
Also European merchants who need to accept payments from non-Europeans need to accept Visa and Mastercard.
Of course but they can support an EU standard as well. It's not mutually exclusive.
The big benefit is that all internal EU card transactions are no longer routed via US companies which is quite ridiculous.
Internal transactions all over the world are routed through US companies. I have paid using Visa or Mastercard at some point in Australia, Indonesia, India, Frnce, Sri Lanka, Singapore, Dubai.....
its not exclusive, but there is a problem with network effects. From the point of view of a business why should they add support for a new payment system no one users, from the point of view of consumers why should they sign up to a new system that no one accepts?
As I said in another comment the most likely alternative is a more decentralised system that all countries/currency blocks that want sovereign payments can get behind.
SEPA gets blocked immediately when you try to buy something expensive, like a top-end graphics card (8k+).
I've been in Portugal sometimes, and to me MB was synonymous with "we accept credit cards", and in fact it is in the sense that you can pay using Visa or Mastercard in those shops. But, is it a standalone system that doesn't require anything outside Portugal in order to work? With their own non-Visa credit cards? And can you use them when abroad in the EU, for example?
It's a standalone network. Most Portuguese cards are also VISA/Mastercard, but payment terminals may only have a contract with Multibanco, meaning only Portuguese cards are accepted. It's quite common for foreign cards not to be accepted.
Nope, it has nothing to do with credit cards, although it also accepts them.
It is majorly used for debit cards, and similar in use to the famous Minitel in France.
You can use it to load pre-pay phones, or other kinds of rechargeable services, buy tickets for public transport and various kinds of shows, pay water, electricity, taxes, among other services.
There is now an app used to pay on shops via QR codes.
You can also pay online with one time cards, that are generated for a single transaction.
Outside Portugal it is a regular debit card.
When you access Multibanco with foreign cards, you can only withdraw money usually.
I'm French and living in Portugal and I do not get the Minitel comparison. Minitel was basically a Telnet device to various services' servers.
That said, I love MB and MB Way. What an upgrade it's been over paying for stuff in the US (where I lived before moving to Portugal).
From what I know from Minitel, the same Internet before the Internet applies.
I was buying tickets on MB, before it became common place in the Internet.
Could you search for tickets and such on MB?
All the stuff I'm familiar with is only payments (with entity and reference).
Now that I think about it, you could search for things on Minitel but I don't remember if payments were made as phone charges or if they could also be done with transfers.
Minitel was so prohibitively expensive to use (just about every service cost multiple francs per minute), I didn't do much with it.
Show me a german webshop that supports modern payment methods. It usually old school bank transfers still.
Which payment method is missing from Zalando? https://en.zalando.de/ It’s a German company
I just bought Kampot peppers from https://www.unclespepper.com/ which is in Germany, the name notwithstanding. And yes, I paid with my Danish Visa card. No problems except that I had to adjust my ad blocker once.
Yes, why did I mentioned SEPA?
It works for the purpose to pay something online.
If you want an example, Eurowings.
I have never paid anything via bank transfer, where are you buying?
SEPA would be a decent solution with instant QR code generation and app payments, but the transfer fees are ludicrous for daily use (~1-2€ per wire). Or maybe it's just my bank being greedy fucks as usual.
It is your bank, I don't pay for transfers.
I use my credit and debit cards the same way today as I did before smartphones existed. I never invited the extra surveillance middleman of Google/Apple into my transactions. And the convenience of tapping or swiping a plastic card is simpler than using my phone anyway. Is this not possible in Spain?
> I never invited the extra surveillance middleman
What's an extra layer of surveillance? Why accept the "credit and debit" surveillance middlemen but not the google/apple middlenmen?
What the world needs are "cash cards". Something equivalent to cash not tied to your identity that you can use in the real and virtual world.
I simply do not understand why governments or the private sector do not provide such options.
Governments frown upon KYC-less digital purse cards. Gotta force everyone to share their national ID number to just open a bank account to keep out drug dealers, terrorists, or NSFW game peddlers.
Banks generally don't like disposable digital purse cards. They make money off fees and interest. If a product doesn't rope you into a customer "relationship" where you link your pay deposits or later might get a mortgage or car loan they can only make money off fees. Enjoy paying $5 to activate a $100 prepaid debit card!
Credit cards provide convenience and cash back benefits. Some might prefer to pay cash for everything for ultimate privacy, and that's fine. But credit cards are the compromise I make. I can still pay cash when I think it's appropriate for a given transaction.
Using Google or Apple Pay so I can tap my phone instead of my card gives me no extra benefit that I care about and complicates my ecosystem with another party.
I'm with you. Low-tech works just fine. I hate the idea of having to depend on a working phone just to pay for things.
But isn't the promise of Apple Pay that you never expose your real credit card # to the merchant? So they can't track you? I know Walmart in Canada really resisted Apple Pay for a few years because it would mean no more ability to track people by their payment methods.
> But isn't the promise of Apple Pay that you never expose your real credit card # to the merchant? So they can't track you? I know Walmart in Canada really resisted Apple Pay for a few years because it would mean no more ability to track people by their payment methods.
Yes, this is exactly what Walmart does in the US since they still don't accept Apple Pay/Google Pay. When I go in and make a purchase using my credit or debit card, they'll associate it with my Walmart account and it'll show up as a "recent order" in the Walmart app because I have the same card saved there for ordering groceries online. They use those in-store purchases to recommend things to add to my grocery orders all the time.
Yes, but in Spain all of our cards are Visa or Mastercard, afaik, so you can't really avoid using American tech in your daily payments (unless you use cash, which remains a very convenient method, by the way).
Thanks! ANOTHER SANE voice of reason! Nothing tops the simplicity of using plastic, either via chip or NFC. Leave the friggen' phone at home!
I put my debit card in my smartphone case. Best of both worlds.
> Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
I would also hope so, that is the entire point. The reason they are scrambling right now is because Starlink just shut off all of Russia. Because Starlink was so cheap and easy (and stable for the last 4 years of the war), a lot of people in Russia stopped using any other form of internet access. And while all of Europe is happy to see Russia go away, they are concerned that the same can be done to them at a whim by any number of American companies. So they are trying to quickly create alternatives to anything American including software providers like Microsoft 360.
As for credit cards, it is not as if there is something intrinsically American in credit card processing. They can just as easily create a new system that uses the same protocols as Visa and Mastercard.
Having your entire economy dependent on a company you don't control in a country you don't control was considered acceptable for as long as a concept of "allies" existed. That is not the world we are living in right now.
Never mind russians putting starlinks on flying bombs to blow up Ukrainians. But those poor Russian Internet users you invented. While it’s jailable offense in russia to own starlink.
> they are trying to quickly create alternatives to anything American
They're the same bright minds that ensured no alternatives could naturally come out of the European market trough relentless bureaucratic central planning. I have zero hopes of a good outcome
Actually European integration the last 30 years has been pretty remarkable. In the past, not even electric plugs were compatible. But the EU is not a country. A lot of the inefficiencies are actually features sought by key members to protect their own local incumbents.
Your best example of European integration is electric plugs?
How about tap water has to be drinkable in every EU country
> a lot of people in Russia stopped using any other form of internet access
What you're saying is just plain false. No one has ever used Starlink in Russia. It doesn't even work here. It never did. Russian troops were using Starlink on Ukrainian territory, that's what was shut off.
Starlink was never available in Russia due to the sanctions regime. It's only use by Russians was via grey import terminals on the frontline in Ukraine (made possible due to complications of geofencing).
> Starlink just shut off all of Russia
What are you talking about? Starlink never worked in russia. It worked in Ukraine, and it was shutdown in Ukraine by using a white list for which any Ukrainian can easily apply.
The goal was to shutdown Starlink usage by russian drones in Ukraine and by anyone on the occupied Ukrainian territories.
> Because Starlink was so cheap and easy (and stable for the last 4 years of the war), a lot of people in Russia stopped using any other form of internet access.
What are you smoking ..err.. any source to your claim ? (Which is between bizarre and just plain wrong).
FWIW, I'm using Bizum on a daily basis in Spain, on a de-googled android phone running e/os/, via my bank app (revolut)
Logical next steps: 1. European app store that has to run on Android/iPhone 2. European phone (platform) -- maybe as a joint venture of different European players / not a single company.
Wero is expanding around Belgium, France and Germany while Bizum has "joined" the European Payments Alliance with Bancomat and SIBS from Italy and Portugal respectively, not sure how these work exactly as I'm also located in Spain.
My point being, if these payment systems start becoming more interconnected and join within a standard, I wouldn't be surprised if we eventually saw Bizum cards around here, Wero cards in other places, and many more.
At least that's my take on it. Of course there's still a long way to go, such as developing the system, banks adopting it, businesses adopting it, then customers (which would probably take years, many people wouldn't bother switching at least until their current card expires)
I don’t see why they can’t just piggyback on existing, proven solutions such as Bancontact, Carte Bleu, etc., which are all based on a card running on its own network. If it’s app-based, we’re excluding quite some citizens from it.
Visa bought Carte Bleue in 2011. Yep.
> Whatever they come up with, I hope it doesn't tie you to a Google or Apple smartphone.
Even if it does, Google won't be taking a cut from it.
Also, it's then much easier to provide a mobile web version, or something else.
My country's internal system also sells a bracelet for contactless payments, and there are obviously payment cards.
Once there's a mandatory standard, it's much more likely competition will show up. EU wide SWIFT, direct debits, instant transfers, all show this.
What would Google prevent from taking a similar cut as Apple is taking?
Digital Markets Act, also Apple nearly lost their payment monopoly in Germany as powerful banks lobbied for a law forcing them to open up. It was passed, but then they didn't want to use it. If I would guess, Apple offered them preferential conditions to not have a precedent.
https://financefwd.com/de/sparkassen-apple-nfc/
What's being discussed isn't Google or Apple Pay.
It's an app that uses NFC or, if needed, reads a QR code and does a web request (i.e. needs internet).
Neither Google nor Apple will block that, or take a cut; and it's already available in multiple markets.
This is about taking stuff that already works in one or two countries, design a similar system that works across countries, and mandate that all banks under ECB supervision implement it.
Lack of negotiation power. Less control over Android than Apple has over iOS.
Google keeps self-sabotaging Android Pay. They lacked market power so cellular carriers blocked it hoping to advance their own payment ecosystem (ISIS). Google changes the payment brand every few years, and fragments it into two separate apps or combines them. It's rather like their messaging strategy.
An Indian friend of mine, constantly raves about their UPI system:
https://en.wikipedia.org/wiki/Unified_Payments_Interface
It sounds a lot like what they're discussing.
Canada has the interac system and it works pretty wonderfully, it's integrated into other systems for overseas compatibility but it can operate entirely independent of VISA/Mastercard if the POS supports it.
It's true that it's a problem, but it can be easily fixed in the future. For example they could just change the app to work on any old android fork. You still get the benefit of no longer having transaction data run through the US.
But right now many of us are concerned with not being able to run e.g. GrapheneOS without locking ourselves out of all basic digital infrastructure. We shouldn't wait until it gets untenable for the EU to lock us into Google and Apple, we want independence from the start.
I’m sure Brussels will do the right thing.
What does Belgium's capital has to do with this? Do you imply Brussels = European Union?
Brussels = location of EU headquarters, and in common lingo Brussels thus means "People running the EU and deciding things on everyone's behalf."
"Brussels" is often used to mean the entire blob of EU and related institutions.
Exactly, it's just like people saying Washington to refer to the US government, or Beijing to refer to Chinese government.
This "Play Integrity" garbage is the first thing europe should break with. Instead we have Italian government app refusing to run on devices not serving Google's interest.. shame.
With my bank (bankinter) you can bizum from a browser (just checked).
Sorry: This is Spain (to clarify).
This. A sane voice of reason in an insane, software-tech dork driven world.
Physical cards ftw!
Btw i love simply using cash in South America when getting a taxi, no stupid "apps", no tech nonsense. Just wait at a proper spot and hail.
I think absolutely Europe needs it's own mobile OS. And thankfully they can "just" fork Android - or better still, adopt one of the existing forks.
I suspect simply stating that it must be a supported standard will do most of the work, much like standardising phone chargers.
I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated.
No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect.
Time to do away with these foreign entities.
I'm a little shocked that of all the comments so far, no one has mentioned the financial risk borne by this whole value chain. OP is operating as if it's just a debit system moving money from one account to another but:
- For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
- For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees.
- For both consumers and merchants, fraud risk is real and while it's the most solvable part of all this it's a real (and costly!) factor today. That risk for fraud gets moved upstream to the networks/acquirers/processors/issuers and that premium shows up in (you guessed it) processing fees.
If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
None of what you’ve mentioned has anything to do with Visa and Mastercard. Visa and Mastercard are just payment networks, their whole business is literally just transporting transaction information from payment terminals to banks and payment processors, plus keeping track of all the numbers (which is pretty important).
Payment networks don’t provide credit or any kind of liquidity whatsoever, that entirely provided by the various financial entities that communicate via the payment network. The reason Visa and Mastercard haven’t been easily replaced is simple network effects, nobody wants to integrate with a payment network where there’s nobody to transact with.
There are many countries where debit cards are the norm and credit cards are extremely rare. In France, people are so afraid of consumer credit that cards are renamed ‘deferred debit cards’ rather than credit cards, otherwise people do not want them.
Growing up in the EU, living in North America now, it's mind blowing to me how much credit these companies are making available to me. Not that I ever would outside of an actual emergency but I can see how it's tempting to someone who didn't grow up in a financial risk averse society.
There is also a major difference as I understand it. They need to be resolved at the end of a certain period. There is a legal difference from Credit cards as in there is no continual liability and thus no continued line of credit. Getting a true credit card is also a lot harder here (not France) than a deferred payment card (usually 1 month) and has stricter credit checks.
These are historically called “charge cards” in the US and are common for corporations who give employees “credit cards” for travel and the like.
American Express is big in this market - what looks like a normal Amex Business Platinum card can very well be a charge card that needs to be paid in full at the due date every month.
There are minor differences but the big one is no carried balance between months is allowed. Payment in full due each month.
Visa and MC have basicly all of these configurations, depending on country & legislation: - Direct Debit - Deffered Debit - Rolling Credit - Installment Credit
And if you are a $MegaBigCorp customer of them, you can customize even more.
indeed. my credit card requires me to preload money from my bank account. it's like there is a second account that keeps a balance that i can spend using the credit card. whenever i use it, the balance is updated. how the credit is paid off i don't know. it could be either right away, or the amount is just hidden by my bank until it is time to pay off at the end of the month. either way, the credit limit is zero. so i can never spend more than i put in first. (though this may be based on how much i spend or be a configurable value.)
It's more taboo to talk about revolving credit card than crack addiction for a french. I don't know a bank that offer them, even the shady online bank.
Historically, these have been issued by "consumer credit" specialized banks like Sofinco; and retail chains ("carte Aurore"); traditional banks would seldom advertise them, if offered at all.
Things have been changing a bit in recent years. Since the "debit" and "credit" nature of the card is now written on them, French folks have started to request "credit" ones for travelling (to rent a car for instance).
My understanding is that for car rental purposes, anything using Visa/MC (and not a national debit network like Visa Debit in the US) will work, it doesn't actually need to be backed by a revolving credit. At a US gas pump, a Frenchie needs to select "credit" even though the card has "debit" written on it. Still, should the clerk refuse the card because it reads "debit" without running it... better have this "credit"-labeled one.
> My understanding is that for car rental purposes, anything using Visa/MC (and not a national debit network like Visa Debit in the US) will work, it doesn't actually need to be backed by a revolving credit.
Many companies will refuse all debit cards, or all cards with "electronic use only" restriction, at least for the deposit, irrespective of the payment network involved.
Too bad that doesn't extend to their government, which seems to have no problem spending their credit down to the wire...
Debit cards come with the same fraud protection as credit cards do, which is the most important benefit of Visa/MasterCard.
Just by their nature, that is inherently untrue.
If your CC is stolen, you are not out all the cash in your account until the dispute is resolved.
If your debit card is stolen, you lose that cash, making it more difficult to pay whatever other obligations you have that period.
In Europe your liability for Card Misuse is capped at 50€ for things that happened before you blocked it.
Also how would someone misuse it? You need a PIN Code for every transaction anyway, and the EMV Chip can't be cloned like Magstripes.
Online Payments need a mandatory 2 Factor Authentication
If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly.
But the more concerning fraud is when you purchase something and don't receive what you should have received from the merchant. Whether it is due to outright fraud or not. In these cases you will also have your money reimbursed by your credit or debit card.
> If your debit card is stolen, your bank has to return all money that was used or withdrawn to you. Since it is unauthorized use of your funds. Same for credit cards of course. Such money is returned swiftly.
This may be what the letter of the law says but this isn't reality. Using debit puts you at greater financial risk.
“Using debit puts you at a greater financial risk.”
What how? Surely the US populations credit card debt dorf even the global populations debit card fraud numbers. So while my whole family in a combined 200 years of adulthood have indeed lost some 1000 euro total in fraud, it's not thing compared to the average Americans credit card bills.
I'd rather risk the street criminals with my debit than the suit wearing ones with their credit.
My debit card is a direct line to my primary bank account. If something goes wrong there and an attacker gains access, my cash is simply gone. Yes, the bank will perform an investigation and yes they may issue some provisional credits as a bridge, but there's a window of time between the theft and that investigation concluding where my actual cash is not in my account.
With a credit card, if the card is compromised, its not my money being stolen - its the card issuer's money from my line of credit, and they were planning on settling up with me when my monthly statement closes. I still have to launch a fraud case with the issuer, but critically, _all of my money is still in my bank account_ and I can continue to pay my other bills and obligations as normal.
I think its reasonable to consider giving up that buffer to be additional risk for the debit card approach, setting aside any other advantages or disadvantages between the two.
EU has much stronger consumer protection and it's on the banks to provide secure systems. Like if my card gets skimmed by an ATM or merchant the bank pays for the fraudulent charges. And overall the EU has much less card fraud.
That's what I said... but, that takes time, time for which you don't have access to that cash.
Just a quick Google... Wells Fargo's policy is 10 days to either case resolution OR provisional credit. I assume that's typical for American banks. For somebody living paycheck to paycheck, 10 days is a long time to go without access to what little cash they might have.
You guys use the debit card linked to your primary bank account??? There's been virtual cards for online shopping for 10+ years now. They're meant to be linked to an empty or low amount bank account. Now with Revolut you can schedule auto top-up to keep this low amount up to date.
Not to mention the per-purchase (online/in-person) limits, mandatory PIN entry, and daily maximums...
We don't use any cards for online shopping, what do you mean? In most European countries online shopping uses a payment API that takes you to your bank's payment portal where you can review the transaction amount before confirming. It's no longer the 20th century, we're not handing out any card details to online merchants.
Banking in the US feels like it's stuck in the 90s. Heck, half the time, it's not even chip+PIN, it's chip+signature (which is a relativelyrecent change from carbon copy or swipe and signature).
I've never had a web shop use an API to deduct from my bank account - the closest thing is PayPal, which as far as I can tell is basically ACH under the covers, just though an intermediary. Pretty sure more Americans use their CC or debit card for online shopping.
We have virtual cards as well, maybe used it once. But we also have a lot less fraud and typically require 2fa for online purchases and chip+pin every x purchases.
with a debit card your cash is gone from your bank account in that moment, even if you get it back later (hopefully). With a credit card they are not able to drain your bank account, the risks are entirely on the cc company and they will be significantly more motivated to get that back than a bank would. it's entirely their problem, not yours
No, Card Misuse is their problem either way in the EU
In UK, consumer protection for Credit Cards is guaranteed by law (Section 75 of the Consumer Credit Act), but not for Debit Cards (that's contractual).
The UK is often completely out of step with consumer protections in the EU.
Is it? Can’t say I’ve really noticed it.
In fact just today I read this article in my EU country that sounds almost identical to what this comment describes:
https://yle.fi/a/74-20209419
“ If, for example, the payment was made by credit card and the product has not been delivered, the consumer can contact their credit card company directly and request a refund.
Credit card firms can usually refund the money quickly, Beurling-Pomoell noted, whereas consumers who paid by debit card must try to claim their money back from the bankruptcy estate.
"Unfortunately, [reclaiming money from a bankruptcy estate] is usually a very long and difficult process. Consumers are generally in a relatively weak position when a company goes bankrupt," he said.
Beurling-Pomoell added that consumers should always consider using a credit card when purchasing a product that they do not immediately receive.”
I think some examples are in order - where has the UK, having recently left the EU, changed its laws so that it was completely out of step with consumer protection? Or is this one thing that made it necessary for them to leave the union, perhaps?
The "consumer protections" of the EU basically amount to communism (i.e., state interference in private matters). So no, that's not a thing the U.K. should emulate.
Well the average bloke inside the EU is much better off than those in the UK. So much success for your policies
https://www.ft.com/content/837a7b40-f534-11e3-91a8-00144feab...
If a pan European system takes off, it’ll be interesting to see what happens with the UK.
Their self-harming has been impressive.
Not true. At least not in Sweden. There are different laws from credit cards and debit cards.
This is the law which regulates such things, and the law makes no difference between any payment service (ie credit or debit), when it comes to unauthorized use, see chapter 5:
https://svenskforfattningssamling.se/sites/default/files/sfs...
Edit: Page 28 to be precise.
The law explicitly states that funds have to be reimbursed to the victim immediately or at latest on the same bank day.
Others have said it but I will pile on as this is dangerous misinformation.
It’s sort of true in a legal sense, but not a practical one. If you find yourself in a dispute (even outright fraud sometimes) you might end up stuck for weeks or months with your disputed funds frozen.
If you are a highly paid software engineer with considerable assets and transaction volume at your bank it’s likely you will never experience hardship with disputing a transaction. If you are someone scraping by and that $200 depends on you paying rent on time that month you will find your experience to perhaps be different.
I’ve helped friends and family with such disputes in the past. Credit cards even when it “goes wrong” are much better to deal with. Your credit limit being reduced a bit is immaterial to your life most of the time. Having your own money tied up during an investigation that demands more and more paperwork like police reports etc. can be incredibly damaging and if nothing else quite stressful. The experience some of my friends had in these matters is nothing like I had when I had my wallet stolen and I no longer recommend anyone use debit if they can avoid it.
Heck, I had a friend who doesn’t even have a passport dispute an ATM transaction in a country he never visited. The bank initially denied it and it took weeks to eventually get it resolved in his favor.
In the end having the banks money tied up vs your own money at risk is always better if you can handle the responsibility of a credit card.
> Others have said it but I will pile on as this is dangerous misinformation.
Was that an introduction to the rest of your comment?
Explain to me please how a dispute with a vendor on a purchase makes a difference for your ability to pay rent? If the purchase was not fraud, then you have used that money anyway with your purchase. Unless you're planning to pay rent by bartering your Amazon order.
If you're instead talking about a stolen or cloned debit card, then that money is refunded usually as soon as you've made a police report and sent it to the bank, which is a matter of two days at most. The paperwork is not difficult, because cards get stolen and cloned all the time.
But the fraud protection is the same, even if procedures and timelines might differ.
> For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for
This is a uniquely American viewpoint. In most of Europe you don't buy anything on credit ever.
Most places outside the USA actually. A liability is someone else's asset, and everyone wants USA assets, so the USA needs to generate a lot of liabilities.
There are numerous credit providers in Europe that would beg to differ.
By December 2025, consumer credit in the Euro area alone stood at an estimated €812 billion.
Are you talking about the same thing?
Sure, in Europe people will subscribe to a credit to buy a car or materials to improve their home.
But buying your groceries or lunch with a credit card is quite a rare exception.
I would never buy a plane ticket on debit.
Airbnb reservations I also tend to do on credit.
Anything related to company expenses I also do on credit and receive reimbursement prior to having to pay it myself.
It's just now how it works in most of Europe. I've lived in four countries, had accounts with lots of banks, paid for countless plane tickets and booking reservations, and only had a credit card once when I was issued one at work. I don't expect I'd ever get a personal one, and can't think of anyone that regularly uses one.
The only time I even considered it was to build a credit score in the UK to eventually apply for a mortgage, but even then it's not really necessary.
In EU to build credit score the best thing is to have no credit at all. I'd be surprised if the UK works differently.
Even after a few years of living in the UK, I could not get a credit score from any of the three or so providers because they said they didn't have enough information about me. I guess being on the electoral roll and paying bills on time just wasn't enough.
Not having a credit score isn't necessarily a big problem, as banks use it for context rather than making decisions purely based on it, but I did see some advice online about getting a "credit builder card" [1] (essentially a high interest and low credit limit card) as a way to build up credit history.
I decided that getting in debt just so I can prove I can get out of it is a stupid system, and didn't do it. Last time I checked (with Experian), I had a perfect credit score, so I don't know what happened in the meantime.
1: https://www.experian.co.uk/consumer/credit-cards/types/credi...
Ah yes I see, being new to the country does not help instill their confidence either. True.
From your nickname it sounds like you are from Romania so if that's so there might be a dose of xenofobia included there as well. That is kinda big in the UK right now, the whole Brexit was fuelled by it, sadly, especially concerning eastern Europe. I was on the receiving end of some of it myself too, being called 'a non-national' and eyed with distrust. I'm sorry.
Those 'protections' have nothing to do with the purchase being credit or debit. They're just artificial incentives from the banks for you to pile on the debt. We frown on that behaviour here in the EU so it doesn't really happen. The same with the cashbacks american banks offer on credit cards, they're just paid by the extortionate card processing fees that vendors pay. So essentially, you are paying for your own cashbacks because the vendors just include it in the price in the end (and usually for everyone, not just those paying by credit card)
Besides, if you want insurance just get a 30€ per year rolling package.
In Europe you typically have travel insurance on debit cards as well.
I would have said "true", or at least - I would have said "I do, but never incurring a charge on next month's bill", but with services like Flex from Monzo, you can actually get credit over 3 months with 0% interest rates, which not only makes buying stuff more likely, but spreads out the costs. It doesn't solve over spending though.
How much is it?
You could draw all of it and put in a a 2x leveraged SP500 ETF :-D for 3 month and then return the money :-D
"Credit limit: £1200"
It is not. https://tradingeconomics.com/country-list/private-debt-to-gd...
The widespread use with "buy now pay later" also counters your wildly baseless claim. Klarna, PayPal 30 days etc.
Your link counts all types of debt including mortgages which is the reason why Luxembourg comes up first.
Just because you have to use Klarna doesn't mean you pay later as you can just select your debit card or even bank account directly.
> credit cards are giving you a revolving loan
I'm confused - is it not the issuing bank that gives you the loan, and the credit card company just provides the infrastructure?
Btw. having an overdraft limit of a few hundred Euros is quite typical for those liquidity issues. You don't need a credit card for that.
I used "value chain" euphemistically because you can get really complex on this and I wanted to spare the casual reader. I meant your credit card as an end-user product in your pocket and not meaning the card networks in isolation, but the value chain is roughly:
1. Merchant (bears little fraud risk but a lot of chargeback risk)
2. Payment Gateway (little direct risk but some liability risk)
3. Merchant Acquirer (more direct risk but mostly if merchants become insolvent)
4. Card Network (Visa/MC/AmEx - less risk but significant underlying costs managing a global technology that spans the financial system and needs to be distributed to almost every merchant of any scale in America)
5. Issuers (Banks + AmEx - most risk but get a big share of interchange fees)
I've surely missed something here that the very smart (and increasingly grumpy these days!) HN community will doubtlessly pile-on to correct, so I apologize in advance for errors or omissions... and I bow down if @patio11 swoops in to tell me about the complexity I've missed in either payments or Japanese economic/cultural conventions
Will also add that the benefit of credit is not overdraft but smoothing cash flow... if I'm living paycheck to paycheck and get paid every two weeks, I will incur essential expenses at the beginning of the fortnight that I can afford but lack cash in my account to pay now. I can't overdraft because I won't have the funds to deposit into that account for another two weeks. I'm getting a service that smooths my cashflow and there's a small premium added to reflect that. (Could you save up enough to avoid needing this? Is that a uniquely American way of living? I don't know! I'm making a descriptive claim not a normative one!)
Sadly I’ve noticed that comments on this topic usually devolve into tribal comments about how ‘things are done in the EU’ which always seem to not be actually that representative of the 27 different countries of the EU, but of course must be better than the US.
I shouldn't have to pay for your usury economy if I'm using cash. If that were really the issue, these companies would have no problems with businesses charging different prices or offering discounts for cash.
The networks allow cash discounts if it's posted clearly and the customer has an option to use a different payment method -- you see this on every gas station sign alongside every highway in America. (What's _not_ permitted is adding a secret surcharge or item mark-up for credit card payments)
The latter is allowed now - after the backs of the credit card processors were broken.
They fought tooth and nail against cash discounts OR credit surcharges and they finally lost. In some areas it's rampant that you get a pretty substantial discount - often 4 or 5%, better than cash-back - and many places post "cash prices".
You can get even more if you're willing to ride the hassle of the gift card train.
The credit card companies know people spend more if they use credit cards, and they turn around and sell that to the merchants.
The UK actually forbids cash discounts and cred surcharges by law - and has done so since at least 2012.
Credit card companies are allowed to run cashback for using them.
All in the name of "consumer rights": https://www.gov.uk/government/publications/payment-surcharge...
Some European countries forbid a price difference but they also limit card fees very low, so the merchant doesn't lose money and you don't get cash back. Forbidding a price difference but allowing high fees is nothing but pure corruption.
Mainly because cash processing fees are higher than electronic, and the primary use of cash is to avoid paying tax
Not true. A chain of restaurants near me does not accept cash, and charges 3.5% markup from their list price to cover CC fees. Texas.
If you'd like to get that fixed: https://usa.visa.com/Forms/visa-rules.html
Surcharges are permitted in some states.
Colorado law recently changed permitting merchants to pass on the actual cost of processing, except for cash, check and debit payments.
https://colorado.public.law/statutes/crs_5-2-212
This law overrides any prior contractual agreements with banks/processing companies that prohibit surcharges. This is previously how MasterCard and VISA coerced merchants into absorbing the processing fee, by contractually requiring credit same as cash pricing.
Companies did do that - but I belive now it’s not allowed to charge less for cash.
Yes this is exactly what GP is talking about (he just phrased it the other way round).
> credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
Neither Visa nor MasterCard are loaning customers their money. It's the European banks that hold the bulk of the risk for European credit card transactions.
Also worth noting that who owns the risk is a regulatory question, not a technical or product one - and, like all regulatory questions, is different for different countries/regions.
Chip and pin and NFC transitions took off much quicker outside the US because merchants generally owned more of the chargeback risk than in the US, and therefore were willing to update their POS equipment accordingly.
Risk (like debt) is another place where a US-centric view will likely lead you to misunderstand the purpose of Visa/MC.
> Chip and pin and NFC transitions took off much quicker outside the US because merchants generally owned more of the chargeback risk than in the US, and therefore were willing to update their POS equipment accordingly.
Not really. The risk of all fraud is initial borne by banks issuing the cards, after all they’re only parties that have an actual financial relationship with the person providing the cash/debt. If something which results in that person cash/debt being stolen, it’s between that person and their bank to figure out who’s liable for the lost money. Chargebacks are just a mechanism for banks to recover some of that lost money, once the liability between the card holder and the bank has been settled.
One of the big reasons why Chip and PIN etc took off outside of the US, is that the US is very accepting of fraud, and charging crazy high interchange rates (up to 10x what they are in Europe) so the cost of fraud is spread over many individuals. Other parts of the world have regulations capping interchange rates, and providing better consumer protection, demanding that banks and payment networks tackle fraud, rather than increase the cost of everything by 1-2% to cover fraud losses.
> Neither Visa nor MasterCard are loaning customers their money. It's the European banks that hold the bulk of the risk for European credit card transactions.
And the bulk of the fees from credit card transactions goes to the bank(s) since they hold the risk: https://en.wikipedia.org/wiki/Interchange_fee#:~:text=The%20...
Cash flow and fraud, yes. Credit, not much in most of Europe. AFAIK nobody has had something close to real credit cards until recently. They were called credit cards but it was a debit card with payment and deferred to the end of the month and backed only by the cash in the bank account linked to the card. I guess that no financial institution did like to risk any money on the behavior of European customers.
I agree the risk transfer is very important, but Visa and Mastercard don't do that (they just facilitate it)
> For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
This is really much less of a thing in Europe, or at the very least in Germany and Spain. Mostly it's the overdraft from banks that you can use as what you call a revolving loan. Most of the visa and mastercards I've had in my life simply debit from my main account.
Visa/MC have built walled gardens which provide many services.
Some of the services include: - Consumer Credit - Fraud protection - Payment network - Discount service (rewards, etc) - Concierge services - Rental/Ticketing services - etc
No one is denying the utility of what they have created. The problem is they’ve built monopolistic walled gardens where these are all bundled together which raises overall costs while also prevents competition.
These services can easily be unbundled (for example in India the payment network is open and cost free, so anyone can provide those other services on top of the payment network).
What has made this far more urgent, however, is that these companies are located in the U.S. which has recently leveraged the power these networks have to attack EU citizens for frivolous reasons.
So even if the MC/Visa business model was perfect, it would be foolish for even American allies to rely on them given the actions of the current administration.
You know here in Europe you can just overdraw your bank account anytime without bullshit fees, just with interest that is still way lower than average US Credit Card Interest (around 11%)?
Also bank transfers are easy, instant and free.
> For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees.
Yes those businesses use a bank loan for this, no need for a credit card again.
> If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
Thinking that the world doesn't have credit just because they use debit cards is one of the most idiotic things I've read today
> If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
Disagree. Credit has its uses, but debit is superior for the vast majority consumer transactions: lower fees, lower risk, instant settlement, easy P2P transfers, and broader accessibility. That we've become used to credit card payment system in the West is largely a historical aberration that needs correcting.
Also, I'm a bit biased since I live in China, but WeChat Pay and Alipay are so far superior to the credit card system that I can hardly find a single redeeming quality in the latter. China was lucky in that it leapfrogged the traditional credit card system since it didn't have that historical baggage.
Hmm, maybe for countries with strong consumer protection, yes.
I lost 3 credit cards INSIDE an airplane (hello AirAsia!). I only realized it when I turned on my phone while queuing at immigration and was bombarded with dozens of "Successful transaction" messages. That's ~30min from stepping off the airplane. When I checked my statements, I saw dozens of physical transactions (swipes/taps) with different merchants in different cities from the airport.
All 3 cards have different PINs. All require a PIN for transactions above ~USD200. Yet the banks rejected my disputes because "it's a physical transaction, so you must be the one doing it." Apparently, they all think I could fly to different cities, buy different items, and fly back to wait in immigration, all in 30 minutes.
I had missed the warning that this tech is now widespread. Must have not logged into Hacker News that day
https://www.kaspersky.com/blog/nfc-gate-relay-attacks-2026/5...
Lawsuit time! Against your bank.
Isn’t that financial risk of credit cards borne by the banks doing the lending? It’s not really any different to a debit card transaction on a bank account with an overdraft facility.
You're mixing debit and credit cards.
In the EU, debit cards are pretty common, and largely its a network effect. You need to get terminals that are supported by your payment provider.
A lot of merchant terminals are provided by banks, and frankly they are itching to get a sweet sweet cut of each transaction. Not only the information, but the cut of each transaction. Something like 0.2-1.5% of each transaction. (I'm sure mastercard and visa give them a cut)
For Credit cards, the banks/operator already handle most of the risk, and then pay visa a percentage for the privilege of charging usury like rates
> - For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees.
Their risk is covered multiple ways (as reflected in their profits). You pay an annual fee to have a card. You pay per transaction, you pay for paywave, you pay 21% in interest.
They cover their risk by hitting every possible angle.
> For many _businesses_ managing cash flow is existential
Err, no - for _all_ businesses managing cash flow is the _only_ NR 1 crucial thing, because if they dont, they will disappear by tomorrow :)
This risk is all covered by the banks, not the interchange networks?
That's all the bank's problem, not the network's.
Your comment seems to miss the point. It is totally possible to enable the first two of your bullet points without Visa or Mastercard, for example banks could just give lines of credit directly to consumers. Indeed, the myriad of loan products is run without Visa and Mastercard.
Yet if the airline goes under, or I never receive the product I bought online, using Visa/Mastercard I'm not left holding the bag.
If I take a random loan with the bank and use those funds to do the same purchases using debit, then I'm the one taking the loss.
Replacing EM dash with "--" doesn't take away LLM smell.
They are taking a percentage point or two on the entire consumer payment system.
I think there's plenty of money to back all the activity.
Especially if there are central banks willing to back them
> They are taking a percentage point or two on the entire consumer payment system.
Visa/MC make about 0.1-0.13% of each transaction, not a 1-2%. The rest of the interchange (the vast majority) goes to the issuing bank.
Doesn't it depend on the country? Payments with Visa and MasterCard work very differently in various countires. In Poland you can pay 0.01€ with credit card and the seller will happily oblige. In Germany even few Euros they prefer to be paid in cash.
Switch? We mostly use debit cards today.
man who has only used the american financial system: the world not singularly using the american financial system is less dynamic. surely there are no counterexamples to this.
I think it's probably a little bit harder than you think with all the rules and regulations out there. I would highly encourage anybody who's remotely interested, listen to the Acquired podcast episode regarding Visa. It's actually quite fascinating how it was started. You may balk at the length, but the whole thing had me interested.
https://www.acquired.fm/episodes/visa
In the Netherlands, before VISA, there already was a national debit card standard called PIN [1]. Sure, times have changed and it's probably not super easy, but it's also not going to be super hard.
[1] https://en.wikipedia.org/wiki/PIN_(debit_card)
I think most people miss that the biggest hurdle is political. Once a political will exists, this system will come to exist.
Fun fact: until about a year ago it was not possible to pay using normal debit cards in most Dutch shops, you had to have a local card. I distinctly remember that AH, Vomar and Jumbo would typically reject foreign cards while Lidl and Dirk would typically accept them. Of course there were exceptions, but that was the rule of thumb.
Most Dutch people were unaware of the issue (because Dutch cards worked abroad), and those who were, were fully convinced that it's because Dutch system is objectively better (it wasn't, it was just a separate network). Then in like 2024/2025 Visa and Mastercard finally retired their special V-Pay and Maestro brands, and now most terminals in the Netherlands accept most normal cards.
Was V-Pay different from Visa Electron?
India built RuPay, China built UnionPay. There's no reason why Europe can't do the same.
France still has CB https://en.wikipedia.org/wiki/CB_Bank_Card_Group
There are equivalents in several European countries. The problem is that these networks are national and not European, let alone global.
National banking players did not want to give up their turf. The European Union had to twist their arms to get them to agree to SEPA transfers, instant transfers, etc.
If banking players cannot agree, then regulation (or the threat of regulation) must be used.
CB actually have higher security standards than visa.
I once worked at a company doing payment card personalization (its the company who turn blank smart cards into finalized cards on behalf of banks. They print the customers names, emboss the account number, and program the chip and the magstrip)
Every year they had comprehensive security audits from Visa, Mastercard and Groupe Carte Bleue.
One guy there told me that they did the Groupe Carte Bleue audit first, because its the toughest. If they passed it they were sure to pass the others.
European countries each have their system. But they do not interoperate. You can't pay with blik in Germany, you can't pay with German debit card in Poland.
The most obvious difference being that unlike China or India, Europe (or the EU) is not a single country. This doesn't make things impossible but certainly complicates them.
Exactly, now that the internet is ubiquitous, none of the problems with replacing credit card companies like VISA are really technical. They are regulatory, they are political, they are social.
And before Trump it wasn't worth the aggravation. It wasn't worth the pushback from the US government.
Trump sure has moved the needle on that! We used to pay protection money to the US via this. Now we don't get the protection, so we don't need to pay.
> one of the problems with replacing credit card companies like VISA are really technical
VISA and Mastercard never resolved major technical problems. It's nothing a bank wouldn't already be able to achieve internally from a technological complexity point of view. They didn't invent any of the technologies, they just navigated the political and regulatory hurdles, then leveraged their position for more.
Your comment makes it look like the problems are "just" political or regulatory. These are more often then not the bigger ones.
The sensible thing would be to do it by currency area - e.g. the Eurozone.
Technology and some systems could be shared.
Then we could have an international standard to let the national networks work together, like for the phone network.
Yes, common standards would solve the technical problem.
There are also business and regulatory problems with regard to international transactions.
My takeaway from the episode was that its actually really easy to setup up visa, you just need to get the banks, vendors, and card issuers onboard, which should be easy if you're the government
You still need to make it, but actually making it is a small fraction of the problem, less than half
> It's just multiple computers keeping a balance. It's not complicated.
It wouldn't be hacker news without a comment like this. I haven't personally worked in finance, but I've had a lot of friends do it.
It _absolutely_ is complicated. It's not too complicated for a nation or the EU to do it in house, but no, there's a bit more there than "Claude make me a ledger"
> No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect.
I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones.
And companies like Visa, Mastercard, American Express, &c. arose initially from solving a real need. Before these companies came into existence when you traveled you'd have to take cash, or traveler's checks or some other nonsense. Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay. Need a coffee at Mt. Fuji? Easy. Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard.
> Time to do away with these foreign entities.
You'll never do that. Why? Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world.
[1] Why is it complex? Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
> Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world.
It could be handled similarly to how tourists in Brazil can now use Brazil's Pix payment system.
One way Brazil handles it is with 3rd party digital wallets that tourists can install on their phones such as Wallbit [1]. Another way is with 3rd party services that let you pay from your own digital wallet or bank app and the service makes the Pix payment [2].
[1] https://www.wallbit.io/en/blog/brazilian-pix-and-a-payment-a...
[2] https://www.pagbrasil.com/lp/pix-for-international-travelers...
Well, you could do that, but that sucks. Not just in philosophy (I don't want to download your crappy app - this applies to any country) but also in practice.
Thankfully Americans at least have enough purchasing power that the demand for convenience - just take my money with this card will keep us away from bad solutions in Europe.
>Well, you could do that, but that sucks
Only sucks for the Americans though, I think most people non American countries will be fine with that
No it sucks for everyone haha. It's an objectively worse experience compared to just using a card (debit or credit).
The vendors you'd pay with Pix in brazil are typically the vendors who may not even accept cards at all, it's pix or cash.
(Although you CAN pay with pix at many supermarkets, I'd rate it as rare. Also useable for online payments, but you take the risk in case of fraud, unlike with creditcards)
Thanks for the information, reminds me of CashApp or something like that in the US. But just to be clear the context was, at least as I understood, moving to using an app instead of using existing credit card rails via Visa and Mastercard and that's just not going to happen because it's a worse experience (in Europe).
If you don't have the ability to accept a card at all, that's a different use case.
All the locals can use cash. Friction free. Objectively better
Cash can get misplaced or stolen, you have to keep going to an ATM to get more of it which for most costs money (my bank pays for ATM withdrawals globally for any fee), it's not nearly as convenient as a credit/debit card though it's cheaper. Though maybe it's not since merchants never lower prices and even if everyone switched to cash prices wouldn't go down. Also there are costs for the merchant to carry cash.
I think your everyday credit/debit card is still objectively better overall, even moreso for tourists which was the main topic.
>you have to keep going to an ATM to get more of it
Not if you are paid in cash by your employer
Are we not talking about tourists anymore?
>No it sucks for everyone haha
We were until this guy joined in!
"Everyone" in this context was tourists. If you want to change the subject that's fine, but be honest about it.
> Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
Those are partially or completely taken over not by the card network but by the bank that is issuing you the card, so a change in the underlying technology will be transparent.
> Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard.
Hard disagree. Until Covid, many small shops didn't take cards in Europe. Taxis, restaurants, market stalls, even trains were often cash only not that long ago. I in the UK ran accounts in companies that had people travel extensively in Europe. We used to issue travellers with EUR200 for the things that cards couldn't buy. Most shops didn't take Amex due to fees. Americans will either have to bring a compliant card or change some cash at the airport.
I also think you have misjudged the mood. I guarantee there are a large number of people in rural Europe that would be very happy never to meet another American tourist, even if it costs them. Americans can look forward to worse service everywhere. I wouldn't be suprised if some people in rural France refused to let you have the Calvados at all.
Its not just American tourists. Its everyone from everywhere.
If you do not accept Visa and Mastercard you are not going to accept payments from all sorts of travellers (tourists, business people, people from your own country living abroad) either.
> I guarantee there are a large number of people in rural Europe that would be very happy never to meet another American tourist, even if it costs them.
Xenophobic or anti-tourism?
> If you do not accept Visa and Mastercard you are not going to accept payments from all sorts of travellers (tourists, business people
Who all stop in chain hotels, who will accept whatever you bring.
> Xenophobic or anti-tourism?
Anti-American tourism. I would say it is a mainstream opinion in Europe that American tourists are very annoying. Each country has its stereotypes about each other, usually stemming from WW2, but the feelings against American tourists have the wonderful effect of uniting Europe. Then America elected a president that threatened us first with economic sanctions, then war. Perhaps it is a fault in our characters, but we tend to take against people that threaten us with military action.
> Who all stop in chain hotels, who will accept whatever you bring.
No, that's pretty much all European hotels actually. Hotels require credit cards for three reasons:
1. Security - if you leave the room a mess or destroyed there's an avenue for recourse.
2. To make more money - having a card on file for "incidentals" increases purchases from hotel guests.
3. Obtain payment - most people don't have the cash laying around to pony up to pay full nightly rates, nor do they have any desire carry thousands of Euros around on their person just to go pay in a large purchase at this conjured up local cash-only inn. It also makes your hotel property an easy target for robbery.
It's strange to me that you're taking such a hard stance over something that is obviously incorrect in order to... make fun of people from around the world who can only afford to stay in chain hotels on vacation?
I usually stay boutique properties which are sometimes, but not always managed by boutique property groups. They take credit cards. Every. Single. Time.
Can you provide the name of a single hotel in Europe that doesn't take credit cards?
> Xenophobic or anti-tourism?
Opposed to what America has become.
There is a strong push towards cashless now though.
What is Europe in this sense? In the Europe I know, every small business has accepted cards for decades. The exception if there are some children selling strawberries to tourists.
As for your second paragraph, you seem to be dreaming. Americans are some of the best tourists to deal with, and anybody who works in the tourism sector is happy to receive them.
I haven't been to every country in Europe, it is true.
A few years ago I shut down a website in Poland for someone because people didn't want to pay with cards, they wanted COD. My colleague took a train regularly in the Netherlands a few years back that was cash only. Dutch websites also have to offer whatever the Dutch payment provider is (I forget). Another colleague in rural Spain found that the price they were charged was lower if they paid cash by the exact amount of VAT. In Germany I ran a website that had to allow bank transfer as a payment method because 'companies generally don't have credit cards' according to the locals. Up until Covid travellers from our office to France and Germany always needed to use a few Euros. Up until Covid it was an absolute taboo to buy drinks with a card in the UK and Ireland, unless it was with a meal. My local chip shop is cash only today, but none of them had a machine before Covid. My local Chinese restaurant tells everyone the card machine is dodgy to see if they will pay cash. They only installed it during Covid.
I think we will manage without Visa just fine.
> and anybody who works in the tourism sector is happy to receive them.
Of course they are! That is literally their job. It is everyone else that has a problem with them.
> Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay.
Is that really true? I remember wanting to buy a train ticket at Charles De Gaulle airport, and the machine only took French credit cards. That was around 2010, so I don't know if something changed.
Well the reverse has been true IME - my Visa credit/debit cards issued by an European Bank have worked just fine abroad, including in the US. There are certainly edge cases where transactions get denied or US people think every card must have a Zip code but overall yes you can just pay.
Ha, well I was just in France last April and didn't have an issue at the machine to buy the train ticket. Though, unfortunately the train just so happened to cease to function on our last night there so we had to take an Uber in to Paris [1].
The wonderful French train company wouldn't refund the ticket either and instead insisted that we might use it one day on another trip to France. Thankfully by the time I got to the front of the line to chat in broken French to the ticket administrator, I had already accepted my fate after hearing a number of tourists (not Americans mind you) yell and stomp their feet uselessly in hopes of obtaining a refund.
[1] That was a fun adventure too. At CDG, well I found out later that taxis are "allowed" and are the same price as the Uber ride and so we could have avoided this by just taking a taxi through Uber, but a group of folks from Great Britain were ahead of me in line and I came across them later when looking for where to get a taxi/Uber. There were rideshare signs or something but they didn't lead anywhere that made sense. They seemed rather aspirational. Well, one of the members of the British group spoke good French (or good enough) and found out the secret spot to go after chatting with an airport employee I think it's at Terminal E (someone else may know for sure) or something and so my wife and I befriended the same British group and went along with them for the long walk over.
We were able to get a ride, though not cheap. Of course the bus was an option and we're no stranger, but we were on vacation and the $50 ride was just chalked up to the cost of doing business. We were already 2 hours behind schedule because of the train fiasco.
All that to say, I think using an American credit card these days is the least of your concerns. I was surprised to see American Express taken rather much more widely than anticipated. Be careful getting gas though as they place holds on your card for $250 or something like that, and once you get enough holds you can't get any more until the prior ones "roll off".
This last summer, I couldn’t use my US-issued Visa or Mastercard credit card in most places in the Netherlands.
Had to use debit.
Literally just got back from a trip there and didn't find a single business or transaction that I couldn't pay for with various US-issued (Chase + BoA) Visa credit cards via tap.
Even more surprisingly to me - a pretty decent chunk of businesses even would accept AmEx. By no means all, but I recall it being basically nonexistent not that long ago.
And to be clear - much of my time was not in areas that get a ton of foreign tourist visitors.
Not saying your experience didn't happen, but given our very different experiences it might be something with your particular bank/issuer/card?
On a recent trip I skipped most the fees and got a good exchange rate with a Wise Card/account.
I was slow to try it and it’s great.
Most Americans with the means to travel also have access to credit cards with no foreign transaction fees and by selecting "pay in local currency" you get the best exchange rate.
There's still an ongoing trick that some European businesses do where they'll try and get you to pay in dollars because they can arbitrarily set the exchange rate. It's obviously within "reason" but on the higher end for no purpose other than to make extra money. I find such behavior to be dishonest and deplorable.
Why would you expect to be able to use a creditcard in a physical shop in the Netherlands? Surely you knew? It works if the payment terminal has support for it, but since no Dutch person uses a creditcard outside of the internet, your kinda going against the grain.
About your point in [1] yes it is complex but maybe 50% is done by the issuing bank/institution
And people do underestimate the complexity of it
Each individual detail isn't difficult, the moat is dealing with a huge, huge, pile of them. But most of the details are driven by laws and regulations: of the entity in charge of those things decides it doesn't want you to have a moat any more, you've got a problem. If there's one thing the EU really does have, it's the capacity to revise regulations.
Rather than a moat of details, it's first-mover advantage. Anyone can run a credit card network, but merchants and banks need to support them. Many others exist, but the issue is that they don't have widespread adoption. Solutions that work exist, which means the lesser supported alternative is not widely used, which again reduces reason for wider adoption...
Regulation changes "why bother" to "oh crap".
jup. once this is built, if adoption is lacking, it's not hard to imagine how the EU could make it the standard payment option.
> If there's one thing the EU really does have, it's the capacity to revise regulations.
This is the central power lever of the EU and one that is frequently underestimated.
European power projection doesn't work through tanks and aircraft carriers. It works with regulations, trade deals and economic incentives. Remember how a few years ago everyone was scrambling to get GDPR-compliant? That wasn't some random event. That was the EU projecting power.
Why do iPhones have USB-C now? European soft power.
Why are things like Champagne and Prosciutto di Parma protected brands that can only be sold if they're from the actual region? And I mean not just in Europe itself, but everywhere it has deals? Canada, Japan, India, China, Mercosur, etc etc? European soft power.
The EU is playing a different game from the other major players. Not one of brute force, but one of shifting the foundational rules of commerce in their favor. And they're very good at it.
Yep. And whereas the EU can't magic itself into having enough fossil fuels or bootstrap a commercially viable reusable rocket launch industry overnight, it absolutely can align payments legislation and mandate that point of sale devices accepting Payment Provider I in Europe should also accept Payment Provider II...
Sounds like you should build a competitor if that's literally all it is...
I suspect there's quite a few other things you have to consider when you're managing trillions of dollars of transactions a year. Fraud, settlement times, up times, security, customer service, debt collection, interest rate calculation, reach, KYC, record keeping, legal inquiries.
But I'm sure we're just a couple grok comments away from a competitor
Very good examples. I'd add that Trust and connections are also huge in payments. Even if your technology is perfect, you need to integrate with tons of different systems to get full coverage, and the people who run those systems don't sign contacts with just anyone.
Don't forget stand-ins, much of this hasn't discussed that credit card networks do a lot of "stand-ins" when the issuer is unreachable (bank goes down, latency too high, etc). It's a bit unclear how things like Wero would operate when a network issue hits as Wero and EU rails won't just assume the liability for the transaction and hope it clears later as it does on Visa/Mastercard.
Required Dropbox comment: https://news.ycombinator.com/item?id=9224
What about it?
> I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance.
Roughly nobody argues that part is difficult.
> It's not complicated.
It's very complicated, for the reasons that all complex real world systems are. It's an absolute mess.
> Time to do away with these foreign entities.
I don't really mind the "foreign" part, but it's fairly wild that essential financial infrastructure is privatized, so let's!
The #1 thing you're paying for with Visa and the others is uptime.
Knowing the card will always work 24/7/365 with such a high degree of assurance is a non-zero factor in how well a consumer economy performs.
Creating Acceptance is super difficult.
Hence why crypto hasn't taken off with merchants. Because who's going to pay for merchants to change their point-of-sale systems to accept a new payment method.
If the entirety of Europe comes up with a single system I think that'll be more than enough incentive for merchants to update their pos software to accept the new network. I hope that they are eventually so successful that merchants here in the US support them too. I'd love to stop using visa and mastercard.
You mean like Pix in Brazil, or UPI in India.
If we could create a single solution on Europan level, based on cellphones first and order banks to provide service of access to it for all of their customers, free of charge, for the privilege of remaining in the market, it could be done.
Crypto is also a shit payment method though. Expensive and difficult to run and with high transaction fees. And if you use a chain with low transaction fees, there's no consensus on which chain that is (otherwise transaction fees would be high) so you have to support all of them. Then you might as well outsource the whole thing.
It’s a little bit of both right? They’re entrenched yes, but it’s not technologically trivial either. The operations they do for each account might be simple but the shear volume of transactions they handle is enormous. The scale makes it complicated.
If you gave any argument for why and how this is true, I might have believed it.
It's not a technology problem. It's a problem of being compliant with vague government regulations (e.g. AML/KYC) and getting banked (which is very difficult... thanks to perceived AML risk).
Canada has had the INTERAC payment system for over 20 years now. It is privately run by Canadian banks, universally accepted and runs on a cost recovery basis.
So there are 3 kinds of "debit cards" in Canada:
1. Debit Mastercard/VISA. These are Debit Cards that use the Mastercard/VISA communication system to process transactions. While they are not "Credit" cards because you are using cash in an account that is your money, they rely upon the VISA/Mastercard system and merchants will be charged the Mastercard/VISA fee like a Credit Card.
2. Interac Debit Card. Interac was the first company to offer a debit card type system in Canada, and they are the traditional bank card. These cards use the Interac system (so does eTransfer) and Merchants are charged by Interac for using the system. Its typically less than Mastercard/VISA, which is why you see these "Debit Card only" signs.
3. Mastercard/VISA and Interac hybrid cards. These are newer and combine both Mastercard/VISA and Interac cards in one. The merchant can choose how they want to proceed.
Most of these "Debit" only signs are really saying "Interac only", but because for 30 years Interac was the only provider of Debit cards in Canada, it became the common vernacular to say "Debit" when you mean "Interac".
Then the vendors pay 2-4% of credit transactions to the payment processor or shift the cost to consumers.
It’s about the cost of another employee in salary per year for restaurants.
While many other countries employ pay by QR code which is free.
The problem here is interoperability.
Now most merchants have to work with two companies, visa and mastercard. Want to accept russian MIR cards? Well, in some countries you're not allowed to, and in some, you must, since visa and mastercard don't work there. Now if you add a european company to the mix... whill their cards get accepted in south africa? What about in eg turkey? China? Will whatever indian alternative is get accepted in france?
Currently, with a visa and mastercard, except for maybe russia and iran, you're pretty sure it'll get accepted at least somewhere in any urban area you visit, so you won't be hungry and have somewhere to sleep. If my bank replaces my mastercard with the EU alternative, I won't be that confident about that for quite a few years.
On the other hand, cash is still the king of everything everywhere... somehow some politicians are trying to get rid of that for some reason.
Most merchants don't work with Visa and Mastercard, they work with payment processors like Fiserv, or other middle men even further removed from the card networks, that already abstract all the different cards (including existing local debit cards) away into a unified flow.
Sure, there's a gajillion of those processors all over the world, and they somehow all work with mastercard and visa.
Diners club? Well.. "it depends". Many don't work with it.
Indian, russian, chinese, cards? Maybe in india, russia and china, but you shouldn't expect it to work "everywhere" like visa and mastercard. Same will be true for EU cards for quite a few years, especially if the system gets fragmented into many different companies using many different systems, and you'll always wonder if your german card will get accepted in Algeria like your friends' french card is.
> Want to accept russian MIR cards?
Thankfully, this use case has been solved by Russians themselves.
I can't disagree that they have a moat, but it's a hard problem and if it were as easy as you say somebody would be disrupting them already to get a share of that $24T.
Just dealing with fraud is a major problem in itself.
Fraud is mostly resolved by the two banks involved. The network is just that, a network.
I'm surprised that Canada doesn't seem to be talking about doing this.
We've already got a strong payment processing brand with Interac, it's used daily for millions of debit transactions, and supports all the features you'd expect (in Canada) from a payment card (tap, chip&pin). There's also the MasterCard Debit and Visa Debit branding which seem to bridge debit transactions to the MasterCard and Visa networks. And there's already Interac-capable terminals basically everywhere that Visa and MC are accepted.
My thought is that Interac should launch a credit card brand called "Interac Credit". The actual credit would be via the banks, just like it is with Visa and MC. Interac already has the relationships with merchants and banks to make this happen, and it has the mindshare with consumers to make it successful.
The Canadian government has been trying for about 4-5 years now to get Canadian banks to embrace Open Banking, which will allow these sorts of products to be built quickly.
The banks have consistently refused to do anything, because they don't want any change that threatens their oligopoly. Canadian bank services are more or less the same as they were a decade ago.
The current government will have to show that it can resist rich people lobbying in this regard, before any real change can happen.
Canadian banks still live in 2006. They can't even make EMT transfers more convenient, so people could request a payment or pay with QR.
Sometimes I feel like they don't actually refuse to do things, maybe they are not capable to improve. Something in their chain of command is broken and doesn't let them change.
Indeed, no one seems to ever talk about the banking monopoly in Canada so it's not a big political issue. It's not nearly as controversial as the telecom or airline monopolies.
There are some new banking startups popping up in Canada like Neo Financial (from the guys who made SkipTheDishes) but they are online-only and have limited integration with stuff like Plaid.
This would still rely on Visa/MasterCard allowing dual-branded credit cards for overseas transactions, which isn't a very common arrangement. The only market that has this is in Asia where there are UnionPay + Visa/MasterCard dual branded cards and I suspect that the reason they allow this is because the market is huge, especially compared to Canada.
Also Interac does not do online transactions outside of some very specific merchants that take Apple/Google Pay transactions. This is how Interac reduces fraud risk, which is why interchange rates for Interac are so low.
You can do this in multiple steps. Start with a credit card usable only with Canadian merchants, which will cover a great majority of transactions of a great majority of Canadians. I'll have an MC for travel and the ordering from non-Canadian merchants, and this Canadian credit card for the other 95% of my expenses. If a significant percentage of Canadians have such a card, major non-Canadian services will add it as a payment option (e.g. ChatGPT or Claude). Then you branch out by either joining or co-branding with the EU credit card company if such a company succeeds.
A world with a patchwork of payments processing options will look different for travel and business, in some ways worse, but such is life in a "multipolar world" which the Americans elected their leadership to conjure up.
Even putting aside issue of geopolitics, it's quite baffling to me that every country besides China and Russia are paying ~0.2% "sales tax" to corporate America.
Not 0.2%
Visa: 1.3% to 2.3% Mastercard: 1.5% to 2.6% Mastercard: 2.3% to 3.5%
Nothing precise as it depends on whether that's debit vs credit cards, and the type of card. Also volume related and what the bank may subsidize, or take on top.
The payment processing rates offered vary by country. It rarely goes above 1% in Germany unless you're really not shopping around or are really low volume.
A % of that also goes to the issuing bank*, not to MC/Visa, so I suspect the mentioned 0.2% is talking about what MC/Visa has as their cut.
*: That's also how banks can profitably offer things like cashback.
Depends if we are talking credit or debt cards
The low fees are for debt and high for credit cards and VISA/MC won't allow you to accebt only the debt cards
The fees for those are still often comparatively lower to the US rates posted above. Credit cards are also not popular here, so while I do own one, I suspect average % of a merchant still remains low. Amex also offers pretty good rates to low-volume merchants here to have more acceptance to my understanding.
This is incorrect.
Visa's processes ~$14T in transactions. At 0.2% thats roughly ~$28B in revenue (VISA posted ~$40B in revenue in 2025) versus 2% is $280B in revenue.
EDIT: The 2~3% you're talking is the payment processor fees which get divvy'd out to acquiring processors, acquiring banks, gateways, merchant processing, etc. etc.
The amount going to Visa/MC is 0.1-0.13%. The vast majority of CC interchange fees go to the issuing banks, not Visa/MC.
Not in EU.
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
> Specifically, the regulation:
> caps interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards;
Visa and MC were capped at 0.5% for the network before that change went in as well. But we have no idea what actual rates were beside the cap as they were negotiated with each card issuer based on their risk profile and customer base.
This. And don't forget that most businesses have in their payment processing contract terms (set forth by Visa/MC ) that prevent the business from directly charging card users the card processing fees. Which means that everybody - even cash users - pay for those fees. What a racket.
I think this is one of the biggest issues here, that the EU is actually forbidding to charge credit card users the transaction fee. On the contrary, it should make it mandatory that card users have to pay the transaction fees themselves. This would automatically force card providers to reduce their fees, because nobody wants to use cards with high fees. It would also get rid of nonsensical cash-back systems.
The EU also regulated the fee to be very low, something like 0.1% of the transaction value, comparable to the implicit costs of handling cash. If it was America–style 5% then it would be a problem, but at 0.1% it's not.
The official Apple store (McShark) in Vienna used to pass this ~3% charge on to consumers (a few years ago, not sure if it's still true today - and also there is a real Apple Store now).
No every, you just don't know it ;)
There was a recent case of one Serbian company being sanctioned by the USA, and Visa and Master refused to process payments. No big deal, since even a small country like Serbia has its payment system called Dina that kept the company afloat.
There's not a single technical reason for bigger and richer countries to develop their own card payment system. It's not rocket science. The only reason they didn't is their regulators wanted a dependency on the USA payment processors.
France has CB. Germany has girocard. The entire problem is that these are national and not interoperable across the EU.
I don't know for France, but in Germany, they did everything they could to reduce Girocard usage. Today, every bank offers Visa debit, but if you want Girocard, it's difficult to find a bank that offers it.
There's nothing wrong with having national cards, since >90% of transactions are national anyway. That's how German Girocard worked for decades until the coordinated push to switch to Visa Debit happened.
And the government did nothing to protect domestic payment systems. As if they value foreign dependency more than the independence.
I get the Visa card for free from my bank whereas I have to pay for the Girocard (German alternative). Presumably the bank gets a cut of the fee.
Those two countries are also at war, hot and cold respectively, with the powers that be.
the eu should try innovating and building a massive global business. seems to be very difficult for you guys
japan mostly uses paypay, just saying
One positive aspect to Trump is he makes it desirable to punish/break up with US companies .
Not sure Wero will succeed, but European country-specific mobile payment systems like Swish (Sweden), Vipps (rest of Scandinavia), Bizum (Spain), iDeal (Netherlands), Bluecode (Germany and Austria), Twint (Switzerland), BLIK (Poland) etc. are also working on interconnectivity under the EMPSA association. Combined they already have 110+ million users.
Wero is like a monolith, while EMPSA is more like mobile phone roaming. If I would bet, I would bet on EMPSA.
https://empsa.org
https://en.wikipedia.org/wiki/European_Mobile_Payment_System...
Like sepa, this initiative can be forced by law and made open rather than tanken hostage by large cooperates, which may then exclude parts of the market.
Very European approach: the winner is chosen by law. Is Wero really a success? According to this article, in 2024 it processed over €7.5 billion.
Polish BLIK, which is not even mentioned in the article and which has joined the EuroPA Alliance, processed €83 billion in 2024, with a 30% y/y increase in H1 2025. I understand that BLIK is much older, but it invested significant effort and money in marketing and promotions while delivering a good user experience. BLIK is now trying to expand to Romania and Slovakia, yet Wero is getting all the hype on Hacker News. Maybe this is a case of East, South, and West Europe being treated differently. Is the only “European” solution one that comes from Western Europe?
Wero is very new, no wonder it’s not used a lot yet.
Wero is basically a rename (and territorial expansion) of the Dutch iDeal system, which processed €141 billion Euros in 2024.
> Maybe this is a case of East, South, and West Europe being treated differently.
Just my pet peeve, but say Central Europe here, not East. Unless of course you mean Ukraine or Kazachstan.
Referring to old Iron Curtain is refueling the animosity of the ancient past.
We wouldn't even need these services if instant payments were the norm. I guess we have to thank the Visa and MasterCard lobbies for this to happen at least 10 years too late.
In Austria EPS is also very commonly used.
Wero is iDeal.
When India moved to UPI in the last few years something very interesting happened. The same devices that accept UPI (usually some android based POS) also accepted a plethora of cards. Previously merchants would be hesitant to take anything other than cash or charge 2% for visa/mastercard. But with wide adoption of digital payments they now just accept any payment with the goal that they don't want bad reviews and/or lose customers.
Point being that with a cheap alternative, it's actually much more convenient now to use a Visa or Mastercard especially with tap to pay because with competition being so high, the diversity means people allow all payments.
> But with wide adoption of digital payments they now just accept any payment with the goal that they don't want bad reviews and/or lose customers.
My experience is opposite, Now with UPI which 99% of people have access to there is no incentive for people to accept Credit Cards.
The competition is high with online ordering (which accepts cards), so the incentive is to not lose customers. in fact people have become so desperate for more sales that they would let you take something and pay later but not lose you as a customer.
I was talking about small businesses like restaurants which generally used to accept credit card even before UPI. Now very few accept credit cards.
Even before UPI credit cards were common accepted online. So I am not sure about that as well.
Small businesses generally dont because the setup for a merchant POS is quite a bit of hassle. In fact maintaining that device also costs money. A UPI merchant on the other hand is quite easy and free from what I know. This setup with visa mastercard might change in the future (with square like devices). However there is also a security problem so fraud might increase with that. Very interesting times for visa and mastercard who have basically not innovated since their existence and yet somehow have grown so big.
You mean that the 2% something visa/Mastercard demand, is far more digestible by merchants when it doesn't represent the majority of their revenue?
If previously 3 merchants had visa / Mastercard out of 10 who only accepted cash or cheques, then with UPI all 10 now accept UPI but 7 or 8 accept a universal POS which allows more type of payments. If previously 10% payments were via cards that costed them 2%, then now if sales are 2-3x because of UPI and online payments, letting go of that 2% for even 20% share of cards is fine because they captured a larger market with more sales. Not so long ago, India was a cash dominant economy so UPI actually opened that up. UPI actually helped Visa and Mastercard. Credit card spending has gone up a lot because of digitalization.
If in EU a local payment system captures the cash market, then the habit of using digital payments will actually also help Visa and Mastercard make more sale.
I currently don't have a credit card, but when I do, I find paying by a Visa/MasterCard much more preferable than UPI, simply because it's easier by tapping.
I was there when this started to roll this out - I remember a lot of nice pine labs payment terminals - it was really nice that I could begin to depend on my American Express card there more than trying to finagle cash (2000inr bills get you a lot of frustrated service workers). I say AmEx because they tended to work much better than my visa there.
Wirecard[0] round 2.
[0] https://en.wikipedia.org/wiki/Wirecard_scandal
This is the fourth attempt in two decades. Here is the short history of earlier attempts:
https://x.com/moo9000/status/2006304163404128289
The difference this time is that Digital Euro is forced by ECB and control (and deposits) are taken away from banks.
The OP article itself explains the history
> The core problem has always been fragmentation. Each EU country developed its own domestic payment solution — Bizum in Spain, iDEAL in the Netherlands, Payconiq in Belgium, Girocard in Germany — but none could work across borders. A Belgian consumer buying from a Dutch retailer still needed Visa or Mastercard. National pride and competing banking interests repeatedly sabotaged attempts at unification.
> The network effect compounds the challenge. Merchants accept Visa and Mastercard because consumers carry them. Consumers carry them because merchants accept them. Breaking that loop requires either regulatory force or a critical mass of users large enough to make merchants care — which is precisely what the EuroPA deal attempts to deliver by connecting existing national user bases rather than building from scratch.
Let's be real: The difference this time is the open hostility from the US towards Europe.
It's now been about a month since a White House deputy chief of staff for policy and homeland security advisor openly talked about/advocated for taking Greenland by force. POTUS was vague for a while.
Northern European nations sent like a hundred military officers to Greenland. POTUS then threatened those nations with, wait for it, tariffs.
Then the markets crashed and Rutte/Nato provided a face-saving de-escalation path.
Most, if not all countries have their own domestic payment systems. This is about cross-border payments within the EU.
“Breakup” seems a bit exaggerated considering the % of payment volume which might switch to the new system.
> “Breakup” seems a bit exaggerated considering the % of payment volume which might switch to the new system.
Brazil introduced Pix in 2019, it's now the most used payment method for all transactions nationwide, ahead of both cards & cash.
India introduced UPI in 2016, it now handles >80% of digital payments there, and handles more transactions a day than Visa does worldwide.
It's totally plausible to me that a similar replacement could overtake cards completely within a decade. The lack of cross-border support means "Pay with Bizum" is a niche feature that's only useful in Spain, but if "Pay with Wero" becomes an instant & ~free payment method that works for hundreds of millions of users then it's a very different ballgame.
And also much of East and Southeast Asia as well: AliPay (CN), Kakao (KR), PayPay (JP), JKO (TW), GrabPay (SG/MY), QRIS (ID), etc. with various interop compatibility between them. If you build it they will come.
Russia switched 100% of its payments seamlessly, no reason for the EU not to do the same. Build up the network and tell banks to use that network even for transactions initiated with Visa/MC cards. At that point cards are still usable, but effectively a piece of identification plastic not directly controlled by Visa/MC anymore.
Italy has a similar size economy as Russia and they also have their own payment network. Technically there is nothing special. Countries have to come together and decide on a solution together.
On the other hand, if you step back a little bit, Russia is currently stuck in a Sovjet civil war, so I don’t think the Kremlin way is that great.
It is a good way if you want to protect yourself against pressure from the US. Sure, the Kremlin did it for reasons that don't exactly paint them in a good light, but this has nonetheless become a real risk for Europe as well.
> seamlessly
It's not seamless if it includes a war, global isolation, exodus of all business and disconnection of the banks. This means they were left with no alternative, in which case, sure, it's 'seamless' to use the only alternative method.
Europe will have a lot of friction with consumer habits and Visa will always be relevant for buying things from outside EU. These are all competing entities which hate anything that makes them seamlessly lose their business.
Russia did it after 2014, not after 2022. So yes, it was seamless
That's not how it worked, Russia prepared well in advance before the war (admittedly, after Crimea-related sanctions scared the hell out of them in 2014). When the 2022 sanctions dropped, transactions within Russian borders kept working seamlessly because the banks were already using the Mir network for those regardless of card types, i.e. you can still use your Russian-bank-issued Visa today for internal purchases. And I firmly believe that Europe needs the same kind of security for its digital payment systems, something akin to IBAN that solved this for EU-wide bank transfers (which is why I'm not sure if it's wise to use some random commercial product as a base).
Of course, right now nothing can dethrone Visa/MC for international payments, besides perhaps crypto in very limited and often shady scenarios. And Europe can't really do anything about that. But that's a different problem altogether (one that annoys me to no end as a frequent purchaser of digital products from Japan).
Nitpick: IBAN is a global identifier for a bank account. The transaction system where you enter an IBAN is called SEPA payment, or SEPA bank transfer, or something along those lines.
Just like I access hacker news by the Internet, not by IP address.
Thank you for the correction, you're absolutely right.
This isn't about the payment network. The EU already has their own payment network, too.
It's about card payment and even if things ending up in your network they first going through visa.
And it's about online payment (PayPal).
A lot of European online stores support asynchronous SEPA transfer. You complete your order, they issue a code and amount of money to send. You send the money with that reference code attached and they don't ship it until they get the money. It works for online order because you might be waiting a week anyway.
Not in Russia, payments made with a Visa card do not go through Visa any longer, at all. You can even use expired Visa cards (with most banks).
> This is about cross-border payments within the EU.
no it isn't
for bank to bank payment your statement might be true
but this isn't true for EC card payment and most online payment
_all_ EC cards either use the Visa Payment network and secure modules or the Mastercard one (but by now it's mostly Visa in most places). Sure they have your banks local branding but it's Visa anyway.
This also applies to payment terminal, most (not all) go through the Visa payment network to process payments.
And even in the same country a lot of online payment either goes through credit cards (again mostly Visa in EU) or PayPal. This isn't technically needed at all but due to fragmentation whatever alternative you want to use is just sometimes available.
Which is where Wero comes in:
- try to reduce fragmentation by making it a cooperation across many banks (of which most had their own failed PayPal alternative)
- onboard people on (local) online banking and private Phone2Phone payment (e.g. bill sharing)
- then (now) expand to pushing some payment terminal providers to support it with Phone based payment. There are multiple initiatives for it.
The later part is possible due to 3 reasons:
- payment apps on phone bypassing secure module monopoly nonsense related to EC/Credit cards and visa
- a lot of the in-person checkout systems of small businesses are now a tablet + separate cash register + EC terminal. This means that even if the EC terminal doesn't support Wero the payment system can still do so through their tablet.
- Also I think some of the wider used payment terminal in large EU specific chains can get Wero support with a software update.
Still it's by far not a perfect situation:
- still too much fragmentation/to little adoption by banks
- "old" payment terminals and (physical) checkout systems which are bound to Visa and can't easily be updated
So there most likely won't be a hard break anytime soon, and your EC card will likely continue using Visa secure module and network for a very very long time.
But having a technical working alternative which can slowly start eating market share is already a huge step forward.
Can I use it without installing their software on my smartphone? Question is rhetorical - of course not, and your smartphone also needs to pass Google's or Apple's remote attestation schemes. Good riddance.
Is it really just PayPal left offering a sane online payment service?
---
From https://support.wero-wallet.eu/hc/en-us/articles/25599074240...:
> It is not possible to use Wero via a web browser or on a computer.
Yes, you can. They have an app, but also integrations into bank apps.
That's interesting. In Belgium the pre-integration Payconiq could not do that.
The use of a phone number rather than a username seems like a BIG downside. I’ve moved countries several times and as a result been forced to change my number several times. This causes a huge headache with any service that relies on phone numbers, especially two-factor etc. Phone numbers should be thought of as ephemeral while usernames can persist.
“Has begun” as in recent? BankAxept has been in use in Norway since 1991 to avoid the VISA/Mastercard “tax” https://en.wikipedia.org/wiki/BankAxept
Biggest banks here refused to support Apple Pay and worked hard on legislations to open NFC access. Now we can pay with no fees to Visa/Mastercard or Apple even from our phones.
There's implementations for this in most European countries (iDeal/Wero, Bizum, MultiBanco, BanContact have been mentioned). What's missing is a unified standard that works across all European webshops and banks.
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.
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.
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).
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.
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.
They will, and with privacy guarantees. But all liability will be on the consumer, and none in the merchant or the banks.
People here don’t understand that Visa and Mastercard get only a small part of the fee. Most of it goes to the issuer and the acquiring banks.
I suspect they aren’t doing this (just) to avoid fees - it’s more about national security in a world where the US might stop being a reliable ally, and in a world where the US has used withdrawing Visa / Mastercard as a strategy to weaken enemy economies.
I think the recent stories of the International Criminal Court judge being forbidden to use VISA and Mastercard, making his life somewhat more challenging, did make some politicians aware of the risks.
https://en.wikipedia.org/wiki/Nicolas_Guillou
What about GNU Taler[1]? If we're doing that to have yet another monopoly, I don't see the point. Even if it's European.
[1]: https://www.taler.net/en/
I use ING DIBA bank. I enabled WERO in the app, as that’s the only way for me to use it.
I can send money ONLY to my contacts. It doesn’t allow to type in phone number, one needs to create a contact.
I feel like Europe is just doomed. The stupidity is endless here.
Yeah but now we have instant EU-wide SEPA transfers for free, so it's not all stupidity! Also it took years to implement - banks are slow at implementing new tech. WERO is still very new, if it takes off, eventually banks will hopefully support it.
When I sold my car, the buyer wanted to use instant payments. Sounds good!
It didn’t work for the amount we needed (over 15k).
I wonder if this will draw tariff threats?
Last August US threatened tariffs on Brazil over their Pix system. One of the reasons given was that people using Pix instead of credit cards deprived Visa and Mastercard of fees.
When anything or nothing at all can draw tariff threats at any time it stops making sense to worry about what may or may not anger an insane clown overseas and you should just do the best thing for your nation and its people. Reducing dependence on the US is the smart thing to do and retaliation would just make it more obvious how important it is to get away from the US to the extent that you can as fast as possible.
Sending a few officers to a fellow NATO country draws tariff threats..
Nothing in France takes Discover, and my bank decided to go with Discover about 6 months ago. "Great" decision, thanks.
My wife found out her new card was Discover debit card right before her trip to France. Her bank sent her a new card unrequested. In an abundance of caution she activated the new card which automatically cancelled her debit Mastercard. Then when she landed in CDG found the new card didn't work anywhere.
This is what these peeps advocating for an "EU-based payment system" don't get, as they typically don't travel worldwide. VISA + Master just work. Have a debit plus credit for one each. (And no, Google / Apple pay won't do it, everyone who calls themselves a "hacker" should know that you too often can't even pay for transport using a rooted phone).
Aside from what the other commenter said about the hybrid systems, you proudly state that you have 4 cards at minimum, but having a system that would work continent-wide for ~98% of all money you spend would not bootstrap if someone needed to be bothered with having a separate travel card, which would rest in the drawer or as second Apple/Google/Garmin Pay choice most of the time? Most adults I know have 2+ cards already, it's just that they were issued by Master Card or Visa. American Express and Discover still exist, despite definitely not having worldwide coverage.
VISA + Master just work _for now_. Debanking Nicolas Guillou[0] was a financial Greenland.
Short-term negative-sum transactionalists are governing the US. Even if November stabilises things somewhat, the cat is probably out of the bag.
Trust comes on foot, but leaves on horseback. _That_ is why a well-integrated EU-based payment system is needed.
[0] https://en.wikipedia.org/wiki/Nicolas_Guillou
We do actually. The German Girocards were, until Maestro ceased to exist, often co-issued as Maestro + Girocard, and global acceptance was pretty good under the Mastercard network.
There are examples of other co-branded national payment systems out there (troy + Discover comes to mind).
If a European payment system (with cards, at a store) is to exist, then visa/mc will still want a piece of the pie by at least playing along to remain as a co-brand and taking their cuts from international payments.
Yeah, really dumb move on the part of Chase bank. They'd previously marketed their accounts as being geared towards international travelers, but now their cards can't be used in much of the world.
Capital One just switched too.
https://investor.capitalone.com/news-releases/news-release-d...
They didn't just switch. They purchased Discover.
edit: added the "just"
Well, “just” as in “recently forced everyone to replace their cards” also works. My CapitalOne mastercard was deactivated January 14, even though it was still valid through 2030.
fwiw: Discover technically goes through amex network in EU, and amex acceptance varies from pretty good (e.g. germany) to pretty awful. Completely incomparable to visa and mc acceptance ofc.
Just use wise or revolut.
"Just" get another bank account before travelling. Right...
Even if somehow EU is able to pull this off it would be a nightmare in terms of user experience. I live in Germany and this is how I would imagine it would work base on my experience in Germany.
1. You first need to install an app (because you want to use tap to pay)
2. Then you need to download another app to authenticate the first app
3. But to set up the 2nd app you need to wait for an actual physical mail which contains a code.
4. Then you set up the 2nd app, but then again it asks for you to do a KYC using your Id Card.
5. Now you need to download another app to do the KYC using your Id, but it asks for another code which you receive by physical mail when you got your Id years ago, but you have no idea where that mail or code is, now you have to request for another code and wait like 2 weeks till you get a physical mail with that code....
.... and the story goes on.
If you have the cash its super easy. Need to have at least 300k euro frozen in the account, go through the process of getting EMI (european money institute) licensed and start fiddling with GNU Taler.
I'd rather have a GNU Taler based system (private for consumers, transparent for the business), but given the overextending urge to destroy any remaining privacy by EU governments, I doubt it would ever happen.
Instead, we are getting a digital euro, a fully dystopian abomination.
As far as I know the "digital euro" should allow for offline payments. At least in principle I should be able to offload to an offline/on-device wallet and give money to anyone without the servers knowledge.
But I'm sure there are plenty of villains and idiots that will try (and succeed) in diluting those principles and will get some dystopian (trace everything) version of that.
Crypto gets a lot of hate... but this really puts its utility into perspective: No counterparty risk with random banks or foreign companies, near-instant settlement, vastly lower fees, immediate fx conversion.
Many comments here assume this is about some hypothetical future project. Just to be clear: Wero is already live and in use.
> neither Visa nor Mastercard will sit idle while Europe tries to dismantle their most profitable market.
Earnest question: is the EU really Visa and Mastercard's most profitable market? I would have expected it to be the US, both by customer volume numbers and in terms of regulatory environment (i.e. the US allowing payment processors to take a larger cut).
I'm guessing US will be fuming about this.
One not-so-fun fact is that when the US sanctions anyone, their ability to transfer and use money via Visa etc. is taken away. In the modern world, being cut away from even using your debit card is a huge, massive hassle.
It is one of the many different ways being sanctioned makes life more difficult. I can't imagine the US being too keen on giving up those powers.
Whenever people say Bitcoin has no usecase, this is exactly my usecase. Of course, only in conjunction with Lightning (a layer 2 solution building on Bitcoin with anonymity and instant transaction settlement). Censorship-free, no relying on third parties, free and open source software to make and receive payments. Yes, I know, bitcoin is too volatile. The reason that it is volatile, is because it has almost no adoption compared to the Euro. But lightning can also be used to transfer stable coins - i.e USDT works via bitcoin taproot asset management. Now I don't trust a El Salvador baed company and thus not USDT, but the EU could fix this by having a central bank issued stable coin pegged to the Euro. The entire software stack would be based around taproot asset management and lightning, done in the open by the people, for the people.
What about the fraud protection offered by credit cards?
>Censorship-free
and you think the EU would want that?
Good thing is, if we can live with the volatility, we the people, who want that, can have it. No matter what the EU wants.
So Wero is not a credit card, but something more like Venmo? How is it supposed to replace Visa and Mastercard?
The concept of a physical card is obsolete. That North Americans and western Europeans for a good part still use them is just stickiness of the infrastructure, and habits.
Developing countries have mostly leapfrogged to total contactless payments.
In South Aast Asia, you typically scan a QR code and approve a payment from your own phone. Far less fraud as a result. Nobody is able to touch your card, you don't have one.
Europe likely identified they better make the jump.
I can assure you that south east asians also still have cards, despite not making most of their payments with it. Not all ATMs support withdrawing with just a QR code from all banks, for one.
There are benefits to non-QR based payment systems, such as not wanting to pull out your phone, open an app, scan a QR and approve to make a payment that takes me 2 seconds with regular contactless payments.
Physical cards are also a nice fallback to have in cases of running out of battery, theft, etc.
I don't really understand why this is better than tap and pay with a card. Why would I want a single point of failure for both my communications and my ability to make payments?
Because your bank doesn't want the hassle of mailing cards. It's another reduction in quality for profit.
Qr apps just sound cumbersome compared to contactless tap to pay.
> Far less fraud as a result.
Who returns your money to you if you purchased something on mail order with this, and it turned out to be fraud?
Third party escrow, if you explicitly used one. There's no free lunch.
And now you have invented Visa and MasterCard again.
Easy when shops start supporting them.
I've paid numerous time using the swiss counterpart, Twint, in small shops. For some like the farm I used to buy vegetables to it was their only supported payment besides cash because they deemed the card systems too expensive.
The same way chinese tourists can already pay with alipay in many retatail outlets in europe, you can already pay with such european systems on Aliexpress. More are probably comming.
Annecdata. Not reliably feasible.
Venmo isn't needed, because bank transfers are free and "real time" as in <60s.
even better, its not public.
Wero is just one of many systems available that allow individuals to make transfers easily and almost instantly. There is also Bizum in Iberia and Blik in Poland. These instant phone-to-phone transfers are very popular, especially among young people who rarely use cash. Wero itself was launched by large banking networks because they had no solution to compete with neo-banks such as Lydia, which was a pioneer in this type of service. France has its own payment network, Carte Bleue, which dates back to when the very first smart cards were introduced, but it is not European. The real problem is therefore not a lack of projects, banks or services, but a lack of interoperability, too many players and geographical fragmentation. Europe is not fast, but it has worked wonders with SEPA transfers. It needs to put in place a clear timetable imposing the interoperability of these services. The absence of plastic cards is absolutely not a problem, just look at WeChat, Alipay, etc.
I think the misunderstanding is that when I say “credit card,” I do not mean a physical card. I have not used a physical card in years. In the US, when people hear Mastercard or Visa, they usually associate that with a credit card (virtual or physical), meaning the money is not taken directly from your bank account. You pay the balance later, which gives you credit and strong dispute protections.
Debit or ATM cards are different. They pull money directly from your account and can exist independently of Visa and Mastercard. For example, some credit unions still issue ATM only debit cards that are not part of the Visa or Mastercard networks.
> In the US, when people hear Mastercard or Visa, they usually associate that with a credit card (virtual or physical), meaning the money is not taken directly from your bank account. You pay the balance later, which gives you credit and strong dispute protections.
Europeans use these dispute protections much less, so Visa/Mastercard are mostly seen as expensive pass-throughs.
It's for online payments only. You click on the wero button on a website/app, if on mobile takes you to your banking app (on desktop, you scan a QR code), you do MFA on your banking app and confirm, and the payment is done.
Wero are not in the business of issuing cards, though obviously they could get into that business - just like UnionPay did in China. I suspect there would be a lot of inertia there, as card payment fees are capped in Europe anyway.
Cards are also online payment. You can already pay with such systems in some physical shops and restaurants, alongside google/apple/alipay.
But cards are offline from the perspective of the consumer. Sometimes even on the merchant side of things. Not that it is an important distinction nowadays--but I have definitely tried to pay with a merchant's own app-based payment solution that refused to load due to a bad cellular connection. I haven't looked into how Wero will handle this.
Wero bought Payconiq which allow to pay at the physical terminal with a QR code to scan with your phone. So, they can cover the physical payment without having to issue cards.
By letting merchants receive payments from customers without going through Visa and Mastercard?
Granted, the FAQ entry is rather light in details:
https://support.wero-wallet.eu/hc/en-us/articles/39413057671...
> So Wero is not a credit card
Neither are visa/MC for the most part. Mostly debit. ;) this isn’t really about the card anyway but the network behind it.
This is likely to be similar to the existing European payment systems just wider in scope. There are a bunch already it’s just fragmented and country specific. Sepa wero ideal girocard crates bancaires
I have always wondered what kind of shenanigans Mastercard or Visa did to convince so many banks to use their networks for debit cards.
When did banks actually make that switch?
It must be relatively recent, because I remember not that long ago my credit union ATM card was not part of Mastercard. Now I have a new one and it suddenly has a Mastercard logo.
They discontinued their debit networks Maestro and V-Pay, so they can get 0.1% more commission
In Poland we have quite popular and handy BLIK system: https://www.blik.com
Card terminals here in Poland usually accept BLIK payments
It is also very popular payment method in e-commerce
BLIK is very cool. I've seen people who were out of cash call family or friends, tell them the six digit code, and their payment was done in seconds.
In Czech Republic we have QR payments. They're ok, but could be more streamlined...
We have MobilePay - looks like it’s made by Vipps. It’s my preferred payment method these days and works great for things like farmer markets etc. zero fees and you can verify you got the right counterparty in seconds. I also pay e-commerce with it. The technology is not complicated to have an excellent payment system! People who think getting rid of Visa is impossible have not travelled anywhere - I even see people talk about PayPal as a good example smh
GO BLIK! Go! https://en.wikipedia.org/wiki/Blik
A major win would be if this would be adopted at some point in the future outside of the EU.
In Asia you can pay with Alipay in most countries. In South America you can pay QR codes via Mercado Pago (for example).
Or at least make this new system interoperable with the more established players worldwide without the need for a Visa/Mastercard.
Like the article mentioned many EU countries have their own payment systems. The challenge is not to build something from the scratch but rather to make existing solutions interoperable. The first talks about cross-border integrations started many years ago but they went very slowly. However, some work is being done, just a week ago a first transfer was done from Spanish Bizum to Polish Blik.
If there's anything the EU is good at, it's inter-op in markets.
I am waiting for the multi-$24T breakup from any American tech. But I am not so optimistic and not sure if it will be $T, $B or $M.
Wero is fun to use, but there so many features missing. The terminals, for example.
Or, an easy way for vendors or car rental agencies to block a set amount when you rent a car.
However, all of these things can be built and I hope Wero gets the time to grow into a full alternative to US-based payment systems.
Not because I want them to fail, but because this market can use a bit of competition and new ideas.
Yes, actually car rentals is the only reason why I still keep a credit card. I vastly prefer that to any kind of insurance.
Probably merchants like Netflix would also love recurring payment functionality. Let's just hope they'll make them cancelable this yime.
I m wondering why they are trying to build a competing product rather than a successor product?
The digital euro could be a good candidate here and it also aspires to have cash-like privacy features. It's also mentioned in the article as separate and hopefully non overlapping product.
CBDC euro upends the entire economic structure of the entire union, which could be very good or very bad and definitely needs to be approached with extreme caution. But card networks used with ordinary banks are a known quantity.
2026 is really the year of USA going down in history. US dollar is collapsing, its stock is having a hard time, Europe is ditching US techs like Google and Microsoft and now this.
Visa/Mastercard are the biggest evil. Why do you think Trump got pissed at Brazil having its own payment system without Visa/Mastercard network deleting billions in revenue from Visa/Mastercard
The problem major problem is already mentioned: Each EU country wanna have their own independent system. Nothing prevent the countries from doing that but it must talk within the same payment network so people in the Netherlands can buy from Italy using their own payment system.
Own payment system is different than payment network :)
Europe had a payment processor in Europay, the E in EMV (Europay-MasterCard-Visa), but stupidly allowed MasterCard to acquire it.
> Creating a viable alternative to Visa and Mastercard requires “several billion euros” in investment
Just the transaction processing fees going to VISA and Mastercard now would probably pay that back within a few years. Also, we're talking about all or almost-all European countries. So it doesn't sound like that much.
> Low interchange fees under EU regulation make profitability difficult.
Mandating that businesses which accept US credit cards must accept the European payment card would take care of that. Actually, maybe that's not necessary, it's probably enough to mandate that companies making card processing tech which supports US credit cards must also include support for this card; and businesses would just get it with their next system upgrade / terminal replacement or something.
> Consumer habits are deeply entrenched
I 'like' how people are described as "consumers", as though every payment is for consumption.
Anyway, habits are not that deeply entrenched. Didn't people adopt those country-level payment cards? Don't people occasionally change credit cards? It's not even a change of tech, it's just yet another card.
> and neither Visa nor Mastercard will sit idle while Europe tries to dismantle their most profitable market.
Now this may be a significant factor... they could influence politicians, tech solutions makers (with sweetheart deals if they don't support the new payment tech, or whatever), they can get the US government to make some kind of threat (we've already seen the threat to invade Greenland). So, yeah, there's that.
Trump has destroyed the US. I know it’s a generic comment but he has left us friendless, broke and eating ourselves.
Wero isn’t even supported by all banks in the EU. :/
All banks in the EU are part of their respective national pay schemes. They need to figure out a way for the national pay schemes to add wero compatibility.
I didn't care at all about Wero until Trump indirectly declared us Europeans as enemies. Now I really hope that it manages to replace Visa/Mastercard.
Though at least in Germany we have "girocards/EC-cards" that are not owned by Visa/Mastercard. Some banks are phasing them out in favor of a Visa/Mastercard debit card.
So maybe this is just an attempt to make Wero a bit stronger in comparison to PayPal. AFAIK Wero does not replace a credit card.
Sigh
The fact that EU sees dependence on American tech in the same way as Russian oil now is saddening and telling.
Americans and American companies had it really good - our tech extracted money from the world, and they were mostly willing to pay for it. And it was an incredible advantage to the US.
But now, it seems that we are happily throwing all that away, for what benefit I do not yet see. Regardless of whether this effort succeeds, why stoke this fire at all?
I would say I hope Americans realize what they’ve done by making their own companies enemies of the world at large, but I’m not holding my breath for any sort of self reflection.
trump is disliked by the majority of Americans, and his actions antagonizing Europe are disliked even by most republicans. this is an obvious fact accessible to anyone who reads the news. he will only be around for 2 more years and will be effectively a lame duck after republicans get crushed in the midterms, starting 2027.
all of this infrastructure Europe claims to want to build will take many many years to realize, particularly at the relaxed European pace. trump will be out of office by the time the EU has held it's fifteenth planning meeting to issue it's first strongly worded letter of intent.
Malignant Narcissists always self destruct.
logbuch netzpolitik did an episode last year about this wero and honestly… i got the impression it doesn’t bode well for wero
(Almost?) all these EU efforts to be independent from the USA are born with a fatal flaw. They require you need to be an Apple user or a Google user.
Right, but you do understand that solving every problem all at once is far harder than focusing on a few key ones and doing it properly right?
Next step EU can force phone manufacturers to offer root access so we can start the year of the Linux mobile
North Korea would be very excited about this
this don't require that.
https://support.wero-wallet.eu/hc/en-us/articles/25599074240...
> The Wero app can be installed on any mobile device or tablet running iOS 16 or later, or Android version 9 or later. We recommend updating your device to the latest version of its operating system for maximum performance, convenience and security.
> It is not possible to use Wero via a web browser or on a computer.
Exactly. Taking control from Visa and MasterCard...and handing it to Apple and Google. Well done, EU
Your comment is of course downvoted
In the end we will need to thanks Trump if we actually get a more federated and less centralized Internet (well, or layers on top of the Internet)
What changed between then and now is that plastic cards stopped being the objectively best way to pay. Most countries already have online payment systems that are safer and easier to use than plastic cards - Wero is about putting them under one brand one network. Once this is done and people are familiar with the brand, you need to update terminals to accept Wero, then you roll out a software update that makes bank apps use virtual Wero cards or something like that.
It's not as much about replacing Visa/Mastercard, as it is about plastic card technology becoming obsolete, and the duopoly failing to react to the market because of corporate inertia. Had they created a modern online payment system, Wero would never take off.
China successfully did this with UnionPay; no reason why the EU can't do the same.
China is a country.
Visa stock is essentially unchanged in the last month, in the last three months.
If only they'd moved so quickly with Russian natural gas in 2008 when Georgia was invaded.
Trump is so crazy, it made Europe build alternatives to Visa and Mastercard. Unprecedented.
That's 2-3,5% extra growth for the EU.
Lots of skepticism on how Europe could possibly handle something like that on their own.
NASDAQ (NYC) currently runs on software/systems built and maintained by Stockholm-based developers. NASDAQ merged with Swedish OMX in 2008, founded as Optionsmäklarna OM AB in the 80s.
"Wero lets users send money using just a phone number — no IBAN, no card, no intermediary."
As long as all the other cards still get acceptance, this seems like a great system.
> National pride and competing banking interests repeatedly sabotaged attempts at unification.
That's exactly the problem. Several actors have won the market of their country, but only of their country.
Will Trump be enough to make the europeans realize that they need to work together, and that an italian win is just as good as a german win?
But more importantly, that walled gardens should be abolished and portability and compatibility of user accounts should be enshrined into law and protected at all costs.
That's a great point. With more open systems there can be multiple winners, instead of a single winner that takes all.
>and that an italian win is just as good as a german win
I agree with you
However that specific example somehow feels off and déjà vu
> and that an italian win is just as good as a german win?
For someone from france, sure.
For both italians and germans, it matters who wins (and i'm not making a pun here).
I for one enjoy my cash back points with American Express. This is not a commercial.
After paying 5% Commission to them in the overpriced stores that take it. Great Job, you played yourself
Once European banks realize how horrible EU is to do business with they will reunite with Visa
European banks operating in EU countries, using Euros, and under the European Central Bank already know things work.
Not to mention that some of the alternatives are owned by a consortium of... European banks.
So I guess we'll have a system whose API is "open and interoperable", meaning "spread across 3000 pages of 5 ETSI TS PDfs that nobody can understand, with the only integration environment available after an expensive security audit, and requiring you to send an email to an email address that hasn't existed for the last 5 years."
/s
> Wero lets users send money using just a phone number
Of course, what could go wrong!!
Unbelievable, a chance to make a whole new standard, new system, new everything, but yet we still have the need to tie it to ancient protocols, only to find later it’s broken by design and we start adding all sort of duct tape solutions to make it “secure”..
This is either a completely and entirely stupid move by some boomers living in the 80s, or maybe, it’s intentional to enforce something insecure like a phone number/GSM as a “national ID” to easily track citizens and force them to have a phone number linked to their real life, and I think it’s the second one, the same reason why many “secure” chatting apps still require a phone number.
We have had these apps in various EU countries for quite a while and it's been fine. You can get a prepaid SIM from a grocery store and register it with them, and so on. You can always SEPA transfer the money if you don't want to use this.
It's also more convenient than giving out an opaque UUID to your friend to transfer you money or something similar.
The bigger problem I see with this is it being one more service locked exclusively to Android and iOS devices, but it's the same with most currently used banking apps anyways.
> You can get a prepaid SIM from a grocery store and register it with them
After you provide your gov ID
https://www.comparitech.com/blog/vpn-privacy/sim-card-regist...
So now this phone number is tied to your gov ID and bank account, amazing design of a single point of failure based on a broken protocol (GSM).
I don't know how the procedure looks like in wherever-you-are but in EU phone number is required to either have a call from agent or to receive verification codes from text messages if bank you've pick offers opening an account on your own. Either way, bank gets all your personal data - you are not anonymous for them.
And the SIM registration requirement in nearly every EU country exists for 10 years now - in my case it was as simple as replying with code to operator's message because they had my personal information already for over a decade. There was a grace period after which unregistered SIM cards become dead - the requirement was dubious but you had to comply in order to call, text. There were "solutions" I've bumped on in depths of the Internet but neither felt serious nor safe.
TBH many European payment apps use the phone number as an ID and people seem to love it. I share the privacy concerns but if I don't want someone to know my phone number I just give them my IBAN.
I would rather give out my Phone Number than watching my account for sketchy direct debits if I was wary of some person
It screams of needing a Google or Apple app