Comment by olalonde
17 days ago
> 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.
Instant settlement is an anti-feature.
I don't want some asshole to be able to instantly drain my bank account. If I did, I'd be carrying a suitcase of cash around with me.
You can have instant settlement while still maintaining fraud safeguards (e.g. daily payment limits) and remediation mechanisms (e.g. reversing fraudulent transactions). With modern 2FA and device-based security, this risk is extremely low. Not a risk that justifies a 2.5% tax on every transaction plus all the other disadvantages of the credit-based system.
> lower risk, instant settlement
That's ridiculous. Why should I, as a consumer, care about the merchant's "risk?"
You don't have to, that's mostly a benefit for merchants. Although it does translate to lower prices and greater competition.