Comment by nottorp
16 days ago
Item one, that has been mentioned a lot of times in this discussion, is that a payment system that is independent of Visa/MC but is dependent on US based smartphones is about as useless.
Item two is convenience. All these systems are "faster wire transfers". I don't really see the point of them when you can already do instant IBAN or even phone number based transfers.
What they do not have is a line of credit backing them. Got to make sure you have money in "the particular system your merchant accepts". Also at least in eastern europe credit cards come with the possibility to pay in a few installments with zero interest (paid for by the merchant of course, so not everyone does that). This is gone in the new system.
What they also do not have is the fraud protection of a credit card. You may be able to revert a transaction but the money is gone from your account and it will take a long time to see it back.
On the other hand it's harder to spend money you do not have so perhaps the EU is trying to make its citizens more financially responsible? :)
I never understood the credit card thing Why would I want to spend money on loan by default? Why do the Americans do that all the time? What's the benefit?
I can't answer for Americans for a whole, but I live in the USA and I pay with credit card by default. My personal reasons:
* Cards are convenient. No need to go get cash, no change at each transaction to manage carrying around. * Cards give a discount in the form of "cash back". (As mentioned elsewhere, this really just inflates the cost of everything for everyone, but I might as well claw it back.) * I don't actually go "into debt". I pay off my card (automatically!) every month, and incur no interest charges. I use it like a slightly deferred debit card with benefits.
The last bullet being significant to your point: I don't "spend money on [a] loan".
For consumers, the risk of fraud is bear by the bank, not you, because you're spending the bank's money instead of yours. For banks, they make money through interests from the customers that don't pay off the bill each month.
They make more of their money from transaction fees and selling transaction data. The interest is a nice bonus.
Because it’s not my money but the banks money :)
Of course it only works to your advantage if you pay your credit cards in full every month.
The benefit is to the banks, making huge money this way!