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.
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.
> 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).
> 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.
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).
> 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.
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
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).
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.
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?
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.
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 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'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.
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).
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.
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.
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.
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.
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.
> 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.
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.
> 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.
> - 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.
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
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
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.
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.
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
> 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].
> 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.
> 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.
> 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.
The reality is more complicated.
I have had Visa or Mastercard being refused in other countries by some retail outlets / institutions.
In fact I never travel with only one card from a single bank because I always want to have a backup. And it is not really Visa vs Mastercard because I have had occurences of having 2 Visas, one of which would work and another would not on a specific shop for no obvious nor documented reason.
> 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.
> 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"
I very distinctly remember a dev talk at early 2000s Microsoft where a distinguished engineer recently come to MSFT from VISA described the herculean effort that it took to run this network. There was an anecdote that he shared that stuck with me where they had a worldwide daily balance mismatch of something like 0.37 cents and it was all hands on deck to find the missing thing. Yeah, man, it is very difficult to run these networks, hence so much money in 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...
> 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.
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
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.
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.
> 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.
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.
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.
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).
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.
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.
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.
Why would anyone use wero when the digital euro gets released?
The article briefly touches this point but dismisses it saying wero and the digital euro complement each other, but doesn't go into detail on how. I see no point in a privately run digital currency when we can have a public one. I guess whichever has good privacy, reliability, ease of use and speed will win.
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.
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.
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.
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.
> This would still rely on Visa/MasterCard allowing dual-branded credit cards for overseas transactions, which isn't a very common arrangement
We can and should make this practice illegal, along with several other anticompetitive policies in this space. Oh no they might hit us with tariffs in response?
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.
"When Western sanctions cut Russia off from Visa and Mastercard in 2022, the country’s domestic payments were immediately disrupted." Lol. In reality this had 0(zero) effect on domestic payments. All Visa/Mastercard cards issued by Russian banks worked absolutely fine. Russia had built it's own payment system before war and just switched seemlessly.
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.
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.
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 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.
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.
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.
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.
Yeah that's pretty much the only reason people use Wero: transferring money faster than a snail between people. This was filled by the likes of Lydia before, but their shenanigans trying to become a bank pushed people to Wero (which is indeed a rename of something else I don't remember, but I used for less than a year).
The real deal is the card payment networks that your plastic thing can use at a merchant's point of sale. All the rest is moot as we already have SEPA for e.g. online payments (it does have its issue for sure, but it's something).
Readit News
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.
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.
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.
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
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.
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
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).
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.
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.
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
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.
What are you smoking ..err.. any source to your claim ? (Which is between bizarre and just plain wrong).
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.
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.
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)
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.
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.
https://en.wikipedia.org/wiki/Unified_Payments_Interface
It sounds a lot like what they're discussing.
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.
Sorry: This is Spain (to clarify).
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 suspect simply stating that it must be a supported standard will do most of the work, much like standardising phone chargers.
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.
- 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.
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.
This is a uniquely American viewpoint. In most of Europe you don't buy anything on credit ever.
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.
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.
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.
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.
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.
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.
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.
Err, no - for _all_ businesses managing cash flow is the _only_ NR 1 crucial thing, because if they dont, they will disappear by tomorrow :)
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
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
I think there's plenty of money to back all the activity.
Especially if there are central banks willing to back them
https://www.acquired.fm/episodes/visa
[1] https://en.wikipedia.org/wiki/PIN_(debit_card)
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.
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...
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.
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.
The reality is more complicated.
I have had Visa or Mastercard being refused in other countries by some retail outlets / institutions.
In fact I never travel with only one card from a single bank because I always want to have a backup. And it is not really Visa vs Mastercard because I have had occurences of having 2 Visas, one of which would work and another would not on a specific shop for no obvious nor documented reason.
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.
Had to use debit.
And people do underestimate the complexity of it
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"
Regulation changes "why bother" to "oh crap".
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.
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
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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.
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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.
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".
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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.
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.
Thankfully, this use case has been solved by Russians themselves.
Just dealing with fraud is a major problem in itself.
The article briefly touches this point but dismisses it saying wero and the digital euro complement each other, but doesn't go into detail on how. I see no point in a privately run digital currency when we can have a public one. I guess whichever has good privacy, reliability, ease of use and speed will win.
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 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.
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.
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.
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.
We can and should make this practice illegal, along with several other anticompetitive policies in this space. Oh no they might hit us with tariffs in response?
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.
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.
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.
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.
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;
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.
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.
My experience is opposite, Now with UPI which 99% of people have access to there is no incentive for people to accept Credit Cards.
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.
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...
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?
The real deal is the card payment networks that your plastic thing can use at a merchant's point of sale. All the rest is moot as we already have SEPA for e.g. online payments (it does have its issue for sure, but it's something).