Money Horror(oltdaniel.at) |
Money Horror(oltdaniel.at) |
This is correct. The correct response to payment and settlement "pauses" for silly things like weekends and holidays is derision. Contempt. Ridicule.
These settlement timelines are based literally on horse and buggy schedules from the 1800s. They have no place in our modern workflow.
I guess there's a certain level of human "intuition" about these things but is this not what most banks anti-fraud systems do already?
This creates risks: as debts are created and exchanged, it may be that that debt won't be settled (i.e. maybe you went bankrupt). So, that's why clearing houses exist:
https://en.wikipedia.org/wiki/Clearing_house_(finance)
During the 1970's, automated clearing houses became a thing:
https://en.wikipedia.org/wiki/Automated_clearing_house
These don't always process transactions in real time, but in batches for various complex reasons. Legal framework and compliancy being one of them, reducing risks was another reason.
In the U.S., the legal framework was recently changed to allow processing within the same business day:
https://www.investopedia.com/terms/a/ach.asp
That network of clearing houses is not just used for domestic debts, it's also used for large financial transactions. These are institutions that are build on immense amounts of trust. And so, simply re-tooling them to be "instantly responsive" towards someone who wants to buy pop from a vending machine? That's not gonna happen.
The author assumes that cryptocurrency is going to change this because "open source". Well, no. Not really.
First, buying from your own crypto wallet is more like debet then it is credit. Second, being able to take out a small cryptocoin credit or loans has little to do with the fact that a blockchain prevents you from spending the same coin twice.
The idea of credit is that you take out a debt you'll settle up at a later time, i.e. 3 weeks later. There's still the issue of risk and you still need to do the entire transaction dance done by lenders, merchants and borrower. That's not something cryptocoins make fundamentally can dispense with.
Finally, the author is a student. Large organisations, like higher ed, often offer a local e-wallet solutions that allows payment for everything within their facilities (also barring outsiders from enjoying benefits reserved for organization members such as staff and students). You simply wire money to your account from your bank and your good to go. Another option is... simply asking if that vending machine could be swapped for one that accepts debet cards and cash.
Lyft happily accepted my debit card and probably cost less in the end anyway.
It would certainly be nice to have something like Vipps in more countries; EU Faster Payments is getting there but not quite as usable. And it's 24-hour.
For any of the peer-to-peer solutions, you have to consider the fraud problems. The problem with micropayments is microfraud.
The experience showed me why Apple Pay and Google Pay were considered worth developing, or using. The only places which could do contactless payment with my card could also do it with my smartphone.
Yes you do, that vending machine you're standing in front of
> I have no real world use for this kind of card
Seems to me that he does.
In many countries paying with a credit card gives you greater legal and fraud protection. Also helps build your credit rating.
Also, many of his gripes seem ridiculous. I don't know if the situation is different in Europe, but in the US I think pretty much everyone should have a credit card. You can use a secured card if you have bad credit, and most debit cards in the US can be swiped as a credit card. All of his non-existent problems seem like they could be fixed by getting a credit card. Credit cards also have better fraud protection, let you build credit, and usually have better rewards for consumers. There is virtually no difference in privacy benefits between credit and debit cards.
\* Faster (instant) payments 24/7.
\* All purchase transactions are generally assumed to be debit card, credit cards are never required and very much optional (I don't have a credit card)
\* Contactless payments are instant, easy and completely standard, everything from the corner shop upward has them. You don't need your PIN for less than £30 (£45 quid from next week).
\* A banking industry that is quick to refund anything from any fraud without asking, which makes for a low case of fraud because they pro-actively block odd transactions.
\* Up to £75k insured per bank
I've often heard stories about payments that I just can't relate to because it seems our payment industry is so good. We have no need for bitcoin and the trendy start-ups don't even gain much traction because the banks own apps are normally just as good anyway.
For me, the biggest problem is trying to move large amounts of money around, especially across borders. It took me like 3 phone calls and a trip to the bank to figure out how to move my money from my US bank account to my Canadian bank account without having to pay an absurd $40 wire fee. And of course currency conversion is a pain as well - if you are converting a large amount of money you either pay a tonne of fees through the bank, pay a fairly large amount of fees (~1%) through something like Transferwise, or pay no fees by going through the hastle of Norberts Gambit.
I emigrated to Canada from Australia, and it was exceptionally hard for me to get a credit card. Apparently no credit rating is the same as the very worst credit rating. It also took time to get paperwork like a drivers license and SIN number (a bit like an SSN), and without those there was no chance. I had to go a few years without one, and the number of things I couldn't do without one was immensely frustrating.
Visa debit sounds great, but I find it doesn't work for a ton of transactions that want a credit card.
In the end I had to put $1000 into a special locked-in account that I couldn't touch before the bank would issue me a $1000 credit card.
I seem to remember credit being a requirement for making purchases on planes for this same reason.
I'm curious because I live in the UK and pretty much all terminals here accept debit cards, although I think the UK in general has been a bit ahead in terms of payment standards (chip & pin, contactless etc.)
These terminals support Mastercard/Visa cards, plus more recently contactless. Mastercard debit cards certainly work.
Btw, if you are an american visiting these countries, and you want to pay with a debit card, when the cashier asks if you pay with a debit or a credit card, answer credit card. They don't care whether it's credit vs. debit, they need to know if it's Mastercard/Visa or the local crap card, to push the correct button on the PoS. If you answer debit, it will NOT work.
1. Austria recently started replacing Maestro cards with Mastercard debit cards... but they seem to be some kind of funny Mastercard cards, not "real" enough for these terminals (except in contactless mode)... But at least you can pay for your plane ticket.
And based on the writing in the "banking standards" paragraph it appears he understands the difference between debit / credit cards and that banking network they operate on doesn't determine the type of finance they provide
I think you've just proven that you have at least one real-world use. It may still not be worth the bother, though.
Not that they know who are your contacts (android contacts synced, gmail contacts, images uploaded,...), where you surf (googletags, google analytics), what you search (google search), what software you use (google play, google spyware framework,...), now they also know where you spend your money.
Now this is real horror.
The fact that a debit card isn't considered as good as (and further, that it's not assumed to be better than) a credit card is yet another bit of money horror.
One should almost never use a debit card, as if it gets compromised the money comes directly out of your account and the banks don’t have much incentive to help too much.
With a credit card, that stolen money belongs to the bank, and therefore they have a big incentive to get it back, so using this kind of card allows you to wield the power of a large company for your benefit. As long as you pay off the full bill every month, you are getting this protection for free.
Otherwise there’s no reason not to use a CC instead of debit. It can even be life saving if you’re slim on the savings and are smart with your CC usage and settlement.
Credit cards aren't for everyone, but if you can pay the full balance every month then there's no reason to not use one.
When you use a debit card to buy gas they put a hold for a few hundred dollars, as if you were filling up the side saddle gas tanks of a huge pickup truck at $6 a gallon instead of filling up a compact. The holds last for days instead of the one minute it takes for me to fill my Honda, or the ten minutes it takes somebody to fill an Escalade.
If it works at all, you can go on a road trip and wind up with enough holds that you have overdraft fees, bouncing checks, fees because you wrote bouncing checks, late fees because of payments that failed, etc.
The "short term loan" from a credit card is not a rip-off, but it means you are laying off risk on them.
If somebody steals your debit card number then they can clean out your bank account and you have little recourse. When I did have my debit card number stolen the bank told me that I had to be careful because they could only change one digit in the number because the rest of it was based on my bank account number.
I told them to turn off debit card transactions on my ATM card.
1. pay with your own money.
2. pay with someone else's money, with no interest, and with various other advantages.
Why would anyone, ever chose #1?
Yeah why not? It's interest free for at least 3 weeks
"Just be responsible with your credit cards" is an easy mantra to live by if you are financially privileged.
Citation needed
There always exists cash (except for internet transactions, of course).
Trying to make either a deposit or a withdrawal of "large sums" (> ~1K USD equivalent is my understanding) cash at a bank will get serious scrutiny and may even result in funds being seized or frozen.
Things have changed really fast, too. Just 2 years ago I don't recall ever being in a store which didn't accept cash.
And yet, all solutions other than cash are from private banks, which have no obligations to take you as a customer.
Unfortunately it seems like Sweden is far from alone in being on this trajectory, they're just a little bit ahead in this sense.
I do think that there's a case to be made for permissionlessly operated cryptocurrency on a public ledger here.
I note, however, that in your first paragraph you dismiss the "one true payment system", and in your second, you pretty much advocate credit cards as that one true system.
In the UK, credit cards are widely used but by no means universally owned.
In Berlin, quite a lot of places only take cash, and those which do take cards often only take debit. I don’t think I’ve even seen a single credit card advertised in the window of any high-street bank.
Our banking system here is backwards in many ways, but the rigamarole described here just doesn't happen. US companies are much better about separating people from their money efficiently, I guess.
I've worked with machines. I don't think this is a good idea.
https://www.ing.nl/particulier/betalen/creditcards/index.htm...
Comdirect does, but he is in the Netherlands.
And if the alternative is using a debit card, then by definition you can pay the full balance every month, because the money has to be there in your bank account before you can spend it with the debit card anyway. It's the same money either way, the only difference is whether it comes out of your bank account in little increments over the month or in one big chunk when you pay your monthly bill.
I have this discussion with European friends regularly: No, I don't automatically get a three-year warranty on everything I buy. I don't even want such a thing, sometimes. And in return I pay much less for everyday items.
But apparently in the UK it does! So if I understand right, not having a history of debt can be a problem when getting a mortgage or loan simply because lack of data for them to make any assessment?
Did you think they were still talking about paying a fee for credit cards? Typically in the UK there's no fees for credit cards, the cost is just in the interest if you don't pay it off in time. In fact there are usually less fees for financial services in European countries e.g. checking accounts and ATMs usually don't have fees. (I mean there isn't usually a fee just for having a checking account, but there are of course fees for doing certain things with it such as a CHAPS transfer.)