Comment by SomeUserName432
4 hours ago
> PIX from Brazil is even better, to be honest.
You lack the inherent fraud, bankruptcy and other malicious actor protection that Visa/Mastercard provides.
Bought something online and didn't receive your product? With PIX you're SOL, with Visa/Mastercard you get a chargeback.
That is by design. It separates the payment processor so it does just that, just payments. It is like money, once you give it to someone else there is no automatic way to fish it back from their pocket to yours. The correct avenue to deal with fraud, bankruptcy and other malicious actor is the small claims court (or civil court, or criminal court).
The moment you start burdening the payment processor with the roles of judge/referee over all goods and services you end up with the mess we have with CCs where Visa/Mastercard are morality czars that dictate what goods and services are valid or invalid, nuking people and companies out of modern society for their own arbitrary reasons.
Edit: And just to add, you can have "chargeback" for PIX as a separate service, most banks offer PIX insurance that is basically CC chargeback by a different name. But the key is that it is separate from the payment infrastructure itself, it is an insurance service that you contract separately. And that separation ins very important, the insurance company can't roll back transactions arbitrarily, or deny people access to the financial system, they have to pay the victim and then claw back their money in court, which is the appropriate venue to decide who is right or wrong in a transaction.
If I get sent a fake (or no) product by someone halfway around the world there's absolutely no way I'm getting my money back in small claims court.
Then use a service that offers escrow. I don't need my groceries to use insurance for the eventuality that the store goes belly-up in the 2 days until I can check that the products arrived in good order
Base payment products should just do payment at operating margins rivaling a non-profit. It's public infrastructure
> their own arbitrary reasons
Outside pressure behind much of it.
In any case, there's a fundamental mismatch between pressure groups and the leverage they can exert through single-consensus. I don't know how to describe the other consensus that is on my brain, but it is distinct.
That makes it a bad design, since every person you interact with has the potential to be a scumbag and not deliver on what you paid for. "Get a lawyer and sue them" or "Rely on your local consumer advocacy agency" cannot be the answers at the kind of scale that will be enabled.
This is the reason I only _ever_ spend money on credit cards, and never use cash or debit cards (European in the US). I've personally had at least three disputes this year resolved in my favor by American Express, and will not sign up for something that suggests courts should do so instead.
(I was editing when you repplied so I'll add it here for you:)
And just to add, you can have "chargeback" for PIX as a separate service, most banks offer PIX insurance that is basically CC chargeback by a different name. But the key is that it is separate from the payment infrastructure itself, it is an insurance service that you contract separately. And that separation ins very important, the insurance company can't roll back transactions arbitrarily, or deny people access to the financial system, they have to pay the victim and then claw back their money in court, which is the appropriate venue to decide who is right or wrong in a transaction.
At least up til now, this doesn't seem to be a significant problem with iDeal. Any iDeal receiver will need to have at least a Dutch bank account, which requires the bank to be very sure of the identity of the person/people (UBOs) holding the account. So downright fraud is unlikely. If there is, one can file a police report, and hopefully the DA will take it to court.
Disputes between non-fraudulent entities happen of course. But I really don't like some algorithm somewhere taking seemingly arbitrary decisions on that. It usually just amounts to robbing merchants of their money, and adding some exorbitant refund fee to top it of. Settling disputes is what small claims court and dispute committees are for.
Of course, with iDeal now effectively becoming EU-wide, things may get more difficult.
> This is the reason I only _ever_ spend money on credit cards
Which illustrates one of the most prolific examples of regulatory capture.
Credit cards became mainstream because of that protection, which was a triumph for the payment processors. Whatever they spent on lobbying was a bargain.
There also a large number of typos that happen. Typos in the amount. Typos in email or mobile number where you are sending the funds to (if pushing a payment instead of seller pulling).
> Bought something online and didn't receive your product? With PIX you're SOL, with Visa/Mastercard you get a chargeback.
Visa/Mastercard aren't handling chargebacks, the banks are. With PIX the way to get a chargeback is the same: if you've been victim of fraud you open a claim with the bank, they'll review it, then possibly give you a charge back within a week. This review process might take longer or be denied, which requires a lawsuit.
But it's only less risky for banks to chargeback immediately on Visa/Mastercard because they make so much money from credit card fees that they can afford it.
Yes, but it's a statistically negative sum game for the customer. Visa wouldn't offer such a service if they weren't winning out in the long run, collecting rent on every one of your purchases.
That’s like telling people not to get homeowners insurance for the same reason
Like, yes, it’s technically a bad deal. But it’s still worth the extra cost for most people
Insurance like that is normally because if the potential size of the loss. Losing a house is way more than most people could stand. A closer example might be buying the extra service contract on every electronics purchase you make: that's usually a bad deal.
> But it’s still worth the extra cost for most people.
Is it? You charge back over 2% of your transaction volume? If you don't then just removing the middleman will make everyone happier. If you do, I have questions as to why...
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I am sure they gain something from it.
My Brazillian bank charges me 600% yearly interest on credit card purchases.
However, the cost of a lawsuit can quickly offset the costs of a CC. Depending on the state, there may not be a maximum cap on expenses, making lawsuits incredibly expensive. (Whereas having paid by card you could ask for a chargeback instead of needing to sue)
It's also a very time consuming ordeal having to sue vendors in these instances.
You're describing the concept of insurance.
I know ;)
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> Bought something online and didn't receive your product? With PIX you're SOL, with Visa/Mastercard you get a chargeback.
This is no longer the case outside US. Last time I had the account of one of the few credit cards I'm using (on the Visa or Mastercard networks), for transactions I should have been clearly reimbursed / credited, as it used to be the case, actually awarded in my favor, was four years ago. Recent transactions, with proven vendor at fault, ended up with my loss. All over Europe (Im traveling a lot). So no tears shed for Visa or Mastercard losing the EU turf.
Brazil has a huge advantage in that they've required full transaction-level transparency for tax authorities -- with clearly defined technical requirements -- for almost 20 years now. One can argue whether it's a pro or a con to share this level of detail with the federal government, but it certainly makes taxation easier and fraud prosecution simpler, too.
Visa/Mastercard provides that because the US is a very untrustworthy country. I don't know the situation in Brazil, but here in Europe small claims court just works fine. I think it's pretty dysfunctional to have to rely on private companies for adequate legal protection.
It's not the visa/mastercard that offer chargeback, but the bank.
This looks as a benefit on the surface, but it is not. In the end everybody loses -- the bank, the network, the customer, the merchant.
That has nothing to do with visa/MasterCard. (Well maybe it does in Brasil). In Poland if you use BLIK which is also a national payment network and you get scammed or money stolen from you the bank will also refund you, same as with visa or MasterCard.
Good, that's a feature - I don't need my payment processor to have value judgments on my spending.
Thats a good argument but those are also features that could be provided by the force of government power in a government and country where the government is not and has not intentionally been corrupted, partially for the very purpose of preventing something like digital cash that is anonymous just like cash was before people foolishly gave in to the “convenience” of cards and acting like they had money by using credit cards.