Reminder to all commenters that Europe is not a single homogeneous country and somewhat diverse in various things, including payments and finance. Credit cards are definitely a thing in many European countries.
In my corner of the world, credit cards were for buying stuff on the internet and travelling outside the EU. Now the net has evelved enough to accept our normal means of payment. I always feel insecure when using a credit card.
As an outsider: which countries lean which way? I'm curious how things trend where and I didn't even really know that debit was used by a majority in certain places (Countries? Regions? Historical based delimiters?).
You are of course free to extrapolate your experience from a single European country to the whole continent, but it's still not a coherent argument for or against anything.
Not everyone. We use both and mostly credit card for online payments that we pay off at the end of the month. It has a limit and it is easier deal with potential fraud vs a debit card where your own money goes. But does it matter? All my debit cards are Visa and Mastercard anyway.
And even when you have a credit card, it might act like a debit card (every payment shows as debit in your banking app, even if you really pay on the 10th of the month or something).
which is in fact a massive pain in the ass, because car rentals and hotels often require credit cards to make reservations (at least in my experience...)
Americans use credit cards and rarely debit cards because here the terms on debit cards are so much worse (for contesting charges, etc), so debit cards never really caught on for anything more than withdrawing cash.
In the US, users of debit cards are assumed to be uncreditworthy, because debit cards in the US have such bad T&C's that poor credit score is the main reason folks use them here.
And most Europeans that have a credit-card need to pay them off at the end of the month. Technically they are charge cards. Unlike a traditional credit card, a charge card does not allow you to carry a revolving balance.
Let's not pretend that predatory lending is not a thing in at least some EU countries as well, just because it takes other forms (installment payments, buy now pay later etc.), but as a general trend, I'd agree that it's much less common.
The article uses the term credit card for apparently no reason, because Visa and Mastercard also support debit cards. The EU is probably more concerned about Visa and Mastercard payment networks being under the control of American leaders.
Can someone tell me why the EU doesn’t develop something like RuPay?
Indian UPI gets mentioned a lot, but when Visa, Mastercard didn't agree with data sovereignty rules among other rules, India quickly developed RuPay [0]. Now most debit cards in India are RuPay. CCs stand at 18% share.
They also integrate seamlessly to UPI.
Why doesn’t the EU consider something like that? They want to jump direct to digital currencies? Is that it? Something else?
[0]: Data rules came in 2017/18, RuPay was developed in 2012 iirc. But it got unprecedented push after the rule.
Wero isn’t a physical card if I am getting this right.
RuPay is.
You get a physical cc/dc with RuPay as provider instead of MC/Visa.
If I am not missing something, Wero is not that.
That is what I wanted to know: why not a traditional, homegrown card that is a direct 1-to-1 alternative of MC/Visa cards? Does that not make sense for the EU now? Why?
> why not a traditional, homegrown card that is a direct 1-to-1 alternative of MC/Visa cards
Because the European market is fragmented. France, Italy, Germany, etc all have some sort of established localized payment system and in some states like Ireland and the Netherlands are entirely dependent on Visa.
There is no "pan-European" bank and individual states still care about their sovereignity. France will continue to back and support BNP and Credit Agricole against Germany's Deutsche Bank (and vice versa). The only solution at that point is to just bypass the whole problem and just go directly with mobile payments.
Additionally, China, India, and Brazil began building their DPD stack in the 2000s but European states didn't start until the last 2-3 years.
Cards (as implemented in the US at least, i.e., with individual purchases not confirmed by the cardholder) are a relic of a different time in many ways.
If you're building out a brand new system, why not make use of the computing device with input/output capabilities (that can be used to confirm amount, payee etc.) almost everybody already has in their pocket/purse anyway and instead rely on merchants being honest and only taking what they're owed out of your account without your confirmation?
Of course physical cards will also play some role in any future EU payment system, if for nothing other than resiliency (a card works without any battery and is cheap to keep in a drawer or suitcase as a backup for a stolen phone) and sovereignty (note who makes most phones' operating systems and runs their attestation providers).
ATM cards are still safer than mobile based payments.
Elderly fraud in the US, scam/fraud calls and digital arrests in India are made possible by social engineering attacks and duping people.
For ATMs, if one has online transactions turned off (default option when you get a new card in India for most if not all cards), it is impossible. One has to walk to an ATM in a crowded place, insert the card, enter a PIN, and can only then withdraw money.
> ATM cards are still safer than mobile based payments.
> For ATMs, if one has online transactions turned off (default option when you get a new card in India for most if not all cards), it is impossible. One has to walk to an ATM in a crowded place, insert the card, enter a PIN, and can only then withdraw money.
So you're really saying that not being able to transact cashlessly at all is safer than being able to do so? I'd agree, but it's also somewhat inconvenient.
The largest payment systems in the world, in China [1] [2], India [3], Brazil's Pix [4] etc, leverage QR codes and other non card primitives for moving value. You can encode EMV [5] in a QR code [6].
> Wero doesn’t seem to be that. Am I missing something? Does making a new direct alternative to Visa/MC doesn’t make sense for the EU? If so, why?
To avoid US government control of your payments and US corporate payment processor extraction of value via your payment flows. How do you avoid someone else controlling your infra? You instantiate, operate, and maintain your own infra. Brazil runs their instant payment system Pix for ~$10M/year, for example. The cost is very reasonable to do so.
It's simple: banks don't want the people they've fleeced to realise that they no longer have a role in the present age. If you let legal tender be exchanged directly via a central bank (which is semi-public by nature), banks lose a huge amount of liquidity that fuels fractional-reserve banking through loans made to generate massive amounts of cash, and without these, the banks are bust.
In many countries, at least some banks are nationalized. India’s biggest bank SBI (State Bank of India) is a PSU (Public Sector Undertaking).
UPI still connects with bank accounts.
My question was about something else: why EU doesn’t try and develop a homegrown card provider? It would provide exactly what MC/Visa does. Are we beyond that point in terms of technological advancement? Some other reason?
How does digital euro replace credit cards? That's basically the same as direct debit. It doesn't address the reason why I use credit cards.
I use credit cards as a proxy for my bank accounts. I know that my issuing bank will protect me from all fraud so I don't have to worry about losing money if I buy something from a fraudulent merchant. I also know I can do things like chargebacks if I have to.
None of this is addressed by digital currency, it's basically like using cash which is haphazard today when there are so many scams everywhere around the world.
In EU most people use direct debit. The term "credit card" is almost synonymous with debit. Chargebacks theoretically exists but they are more complicated, I don't know anyone who ever did that.
Maybe in the past, but nowadays you can call your bank for a charge back or you have an option in the banking apps
I do have to say though, that with customer protection laws we have it has never happened to hear about a friend getting a charge back from the bank, usually you go to the seller first (or the platform if you got scammed) and you get refunded there
I’m European and protection laws are nice to have but if a shop doesn’t refund you those laws don’t automatically give you your money back. That is where a credit-card comes in handy. I don’t know any bank that offers this protection on a debit-card.
Yes, but even then you can usually go to the bank, at least in italy despite not being called chargeback you can ask a refund for scams or similar issues. More modern fintech banks give you this option directly in the app, otherwise you might need to chat with an operator
At least here I see online that there's the possibility to do so (even with debt cards). However, I guess that with a credit card it is going to be less annoying for you, or any way easier for you, since it's their money on the table and not yours
I'm talking about italy btw
Edit I also think that prepaid cards here are what have less protection
Do you mean debit cards? With very few exceptions, you can't pay with direct debit in-store, and for online payments at merchants that don't know/trust you yet as a customer it's also pretty uncommon.
I have some Irish friends. And Ireland seems similar to the US when it comes to credit card usage (vs debit). I assume that is because Ireland is heavily influenced by US and UK banking habits.
On other hand, Germans only use debit cards.
How do you deal with fraud and people cleaning out your bank account money rather than OPM of a credit card company? Just have enough spare cash for a burner checking account and wait for the fraud reversal?
In the US you'll almost always get your money back if someone defrauds your debit card but you could be in for a painful time if you depend on the money in that checking account until it gets fixed.
Banks suck it up, but fraud is likely a lot less prevalent because 3D Secure is mandatory for online transactions and chip and PIN were ubiquitous way before the US seemed to have started using it.
The US still hasn't started using PINs for all credit and most debit transactions, and at this point it doesn't look like it ever will.
Apple and Google Pay are just as (if not more) secure anyway for the majority of transactions, and a long tail of US restaurants, hotels, corporate card issuers, rental car agencies etc. will simply never change their legacy flows. There are just too many incumbent stakeholders.
SEPA Direct debit still has a confirmation from the account holder. You usually see the pending transaction before it clears and can block it. Some banks (dreadful and hated bunq for example) require an active confirmation from the account holder before it is allowed to clear. Some have a setting hidden somewhere that sets the policy to autoaccept or something else.
I haven't ever seen illegitimate direct debit. I guess you need to have an actual business to issue direct debit orders and bank will show you the door and freeze your money if you start doing funny things. I guess.
Probably the dreadful R word has something to do with it, go figure.
On cards we also have limits and the only time I saw something happening was after being unfortunate enough to pass through ~~the ghet~~ the glorious capital of our continental Empire, majestic city of Brussels. That time the bank tried their best to call me.
Yes, I think most people have several accounts, or at least a main and a "spare money" account. If you can prove a fraud the law mandates the bank to back it up. In EU bank apps there are often many warnings and popups when authorizing a transaction. Also in EU you can get a refund of any digitally made purchase, by law you can send back the item for 30 days.
Chargeback always seemed strange to me and never needed it. Fraud should be reported and handled at the root, not by making digital transfers into some magic disappearing money.
I don't think people keep all their money on a single account.
I have 20 in my bank (different savings, some foreign currency accounts, etc.), and only one is tied to my debit card. I move money there when I need it.
Opening another account number is just few clicks away. There is a limit for it also.
So you're really using credit cards as a proxy for a consumer-friendly (at least with regard to fraud/disputes) payments product.
Credit cards being more consumer friendly than bank transfers is usually an artifact of the concrete implementation, not the abstract concept. In many EU/SEPA countries, returning a direct debit is much easier than a chargeback in the US, for example. In some countries, people even consider credit cards as less secure because filing a chargeback takes marginally longer with most banks (and requires a letter as opposed to a single click in online banking).
If the digital euro is to succeed, it'll of course have to compete with cards on the usability side as well.
It's not just the chargeback process; it is that fraud actually removes money your account potentially causing other payments, like your mortgage, to default. With a credit card you have a month to get things straightened out before a payment is due.
I was wondering about this. I wonder if there are insurance products to close this gap? Or maybe some banks offer accounts with different kinds of purchase protection.
I'm with you. While I'm no fan of the risk involved with missing a CC payment, there's a mountain of difference between credit and debit when it comes to fraud. It's literally you trying to get your money back (debit) versus some giant corporation trying to get _its_ money back (credit).
There are still protections from the bank/visa/mastercard network.
Somebody somehow stole my card credentials (online i think) and managed to get money out of my debit account through some obscure way without 2FA. The money disappeared but transactions showed up as “uncleared” and after few days i had money back. My bank said that i have to wait for the transactions to clear before they can start the transaction dispute because now it's in network hands.
For a lot of Americans the credit card system is another tax on being poor:
People with stable jobs and good credit qualify for no-fee credit cards with rewards / cashback. As a consumer you benefit financially from having a credit card. Those elsewhere in the thread worried about "debt" - you just set to auto-withdrawl the entire balance of the card every month from your bank account. Now you have free money. I can't think of a reason not to take advantage of this system in some way.
But people with unstable jobs and poor credit help subsidize these "higher-end" credit cards when they pay high interest rates on their because they missed payments or hold a balance over multiple months. For those people credit cards could help with monthly cashflow issues but are essentially a scam and not much better than payday loans.
Yet another system that American consumers are kind of forced to participate in that's a sort of tragedy of the commons (high-reward cards wouldn't exist without the exploitation of other people not savvy enough to avoid high interest and fees)
There is no such thing as free money, you're paying for it somehow. Maybe higher processing fees, maybe beggars on the streets and a society out of whack.
> How does digital euro replace credit cards? That's basically the same as direct debit. It doesn't address the reason why I use credit cards.
Exactly, it is just their latest marketing move to have people accept it.
I was in a meeting at the ECB 6 years ago, the digital euro was high priority and we were supposed to see the first pilot 5 years ago.
The project is actually older and I saw schematic of the system and screenshot and the management interface 6 years ago. It was developed by a German company.
I am not sure why we are not using it right now... it can either be:
- the urgency, like upcoming financial collapse, disappeared,
- the bank lobbied so hard they killed the previous design,
It’s fancy instant payments, which most of the developed world already has. The question is which unnecessary intermediaries do you continue to remove as you refactor legacy financial infra.
Credit card rails are expensive legacy rails, that part of the stack is the target to disrupt in this context. In the context of the digital euro, you can think of it as a demand deposit account backed by the central bank (as most fiat deposit accounts are in some way) that is portable between banks, like you’d move a US investment account that can hold securities between brokers with ACATS at the clearinghouse.
The exact technical details aren’t terribly relevant imho, just that the EU has found the will to implement a superior value storage and transfer system, a benefit of which is avoiding US entities and infra. I have intentionally simplified for the layman audience, and understand if you take issue with my simplification.
Your comment history shows a decidedly anti EU sentiment, including against EU sovereignty (https://news.ycombinator.com/item?id=48515118, for example), make of that what you will.
> How come the EU is making a "digital sovereignty" push? Why are only EU people allowed to compete for EU services? Are there no evil people in the EU?
I like tech that improves efficiency (disintermediating unnecessary US commercial payment processors) and decouples from proven threat actors and nation state aggressors, that is my interest on this topic, ymmv.
I don't have numbers for you, but I do know that every European I know is much more worried about card fraud than the Americans I know. One quick example is that the Europeans get very nervous when the waiter takes the credit card away from the table in the U.S.. This is just not done in Europe because there is a (at least perceived) history of skimming in much of Europe.
One big difference is that in the U.S. cardholders are largely protected from credit card fraud (not debit card fraud), so the card vendors have to take the risk and so have robust anti-fraud measures (both before and after payment). Largely it is the merchants who have to prove that there was no fraud. Whereas in Europe the burden of evidence (not proof) is with the cardholder.
US card fraud rate is significantly higher than in the EU. In 2015 it was about 0.042% in the EU, vs 0.1388% for the US. The 2021 rates for the EU fell to ~0.028%.
You get nervous about giving your card to a waiter because you’re in a foreign place with a nonsense payment system worst than most developing countries and it’s not something you’re ever asked to do anywhere else.
Yes, because handing over your card to a stranger is considered a fairly crazy thing to do in most countries other than the US, as cards require PIN entry for most transactions (which actually does meaningfully prevent in-person card fraud).
In the US, you simply have no choice if you want to eat in a restaurant, so people are used to it. I'd expect total skimming rates to be higher in the US, since magnetic stripe transactions have been phased out in effectively all other countries. People don't care because they don't directly pay for the resulting fraud out of pocket. As a society, of course everybody still pays for it.
> Largely it is the merchants who have to prove that there was no fraud
No, in-store, it's the issuing bank that's liable, even in the US (unless the card is PIN-preferring, which is usually only true for foreign cards).
Taking a card away from the table is weird for us because it's not what we do here so it becomes suspicious. Even so skimming is much less of a problem since chip and pin were introduced. Nobody I know has had any issues with fraud. We also require 2fa for online purchases.
There's also a large difference between counties. In the Nordics its ubiquitous, I haven't carried or needed cash for almost 20 years. Meanwhile Germany has barely started to use cards.
Also clears the way to control how the digital euros can be spent.
No thanks.
Ideal/Wero is good.
Use my credit cards for larger online payments. Mainly because it has insurance and makes it easy to dispute something.
Last year a large Swedish clothing brand didn’t deliver 400 euros worth of clothing. They said they did. I have nothing. Customer service unhelpful. I disputed it with the bank where I have the credit card. The same day it was fixed.
I'd rather have a democratically elected government in control than an unelected company that actively uses its power to censor things it doesnt like. [0]
Except that parts of the union are not democratic at all.
And in this specific case I kinda of agree with what they banned. And they are definitely not the only ones. Lots of financial institutions block these kind of things.
This has been de facto true for a while, not that it improves the situation. Various EU countries have legal limits for the size of cash transactions, requiring you to do it via a bank.
The idea that people have private property does seem to be something governments are incredibly keen to erode.
I am still not quite sure how this would affect my day-to-day (private) payment experience transaction cost etc.
But is has strategic value for Europe:
> [...] European dependencies in critical technologies. A digital euro could mitigate these developments in the medium term if the infrastructure is mainly operated by European companies and if European payment service providers manage to achieve a leading position in the evolving ecosystem for digital euro services.
i hope the thing they roll out is a straight copy of pix from brazil. its fast, reliable, cheaper than debit cards and private (not anonymous but only the central bank can see your info). no corporations involved outside of support contracts and no stupid limits to make banks happy like this new proposal.
and there should be a right to use all payment methods in the constitution or whatever the eu equivalent is. all stores must accept digital euro and physical stores also accept cash. crypto shouldnt be a part of the system but protected from being made illegal in any member state, privacy coins especially.
How much you wanna bet that digital euro implementations will in practice depend on two US corporations? The EUDI wallet implementations being rolled out seem to so far. (Apple and Google, in case it wasn't obvious.)
This seems different than a credit card account though? I buy everything with my credit cards because I don't want to swipe my bank card at random merchants.
Credit Card usage is really different between those regions. While I lived in EU, I rarely used credit cards (even paying online works with debit cards). But in Canada/US, I almost exclusively pay with credit cards now when shopping. Although in fairness it took me a few years to get in the habit of using credit cards and 'collecting points'.
This is not an issue in Europe (and really in most if not all countries other than the US at this point), since both credit and debit cards require a PIN for all non-trivial payment amounts.
it's about the payment processors, not the card type, though the article makes it confusing by mentioning credit cards as it's really not about that at all
Read the FAQ, it's about no longer relying on US payment processors for handling transactions in a different country that may not support your country's payment system
A vast majority of card transactions in the EU are done via debit card. Credit card accounts for only around 25% vs debit. And the only place I've swiped my card was once, in the US, about 15 years ago.
If this is true then what will this new "digital Euro" change about the reliance on US credit cards? It seems that the 25% of people that are swiping US credit cards are doing it for the convenience and benefits of using a credit card. Will this digital euro change that?
The headline is probably written for an American audience, or for brevity.
It should say "Digital euro clears key hurdle as EU seeks to break free from U.S. debit and credit card processors". Most debit cards in the EU are either Visa or Mastercard, although there used to be more local/national systems.
European banks offer the credit, but the payments infrastructure currently goes through US companies. The first step is to get those payment processors out of the picture.
In Brazil, which is further along in the transition to digital cash, PIX already supersedes debit cards. Some banks already offer deferred PIX payments, wherein the merchant receives the money right away and the buyer pays their bank later, with interest. The central bank is also developing a "pix with guarantee", which will compete with credit cards: payment would be agreed to be settled at a later date, with the bank guaranteeing that the merchant will receive the money.
Debit cards usually also use the Mastercard or Visa payment networks.
Even though I and the supermarket I go to are both part of SEPA and I can issue a bank transfer that will clear ~instantly, today cashless payments still involve EMV for various reasons.
A bank card is a type of card. Credit cards and debit cards are both bank cards. Prepaid cards are another type.
With any type of bank card, there's a bank that guarantees to a merchant that they will later receive a payment. With a debit card, the guarantee is backed by money you have on deposit. With a credit card, it's backed by the bank's money, which is higher risk for the bank.
Two US companies, VISA and Mastercard, have big networks for processing transactions with bank cards. These networks act as intermediaries to connect merchants (who want to accept payments) and banks (who issue cards) together. It's much simpler for a merchant to send a request to (say) VISA than to figure out which bank issued each customer's card. The payment networks also define, publish, and enforce standards and rules for the payment process.
These networks aren't banks. But they are, in a sense, bank card companies because they are part of the bank card system.
So in other words, European consumers have an account at a European bank that issues them a card they can use for purchases at European businesses, but US networks connect it all together.
Visa and Mastercard are both US companies and they issue both debit and credit cards. If you have a UK or EU bank account with a Visa or Mastercard, regardless of currency or whether it's debit or credit, you are still ultimately reliant on US companies to clear transactions every time you use it. That's what the EU want to reduce.
On an article like this, I encourage anyone giving an opinion based on their own experience to say what country it's from. (Or have this in their profile.)
This sounds like "government issue Revolut". Which would be... low-key nice? Not a nefarious scheme, not a revolutionary future of money, just something to replace a certain part of your financial life without tying it to a commercial entity. Which might be appealing to the anti-capitalism segment of Europeans.
> The approval of draft rules by the economic committee of the European Parliament comes after three years of wrangling between the ECB and banks, which have been concerned about deposit outflows and lost revenues and sought to limit the scope of the project.
This kind of thing is why I'm optimistic both about Bitcoin and fiat currencies in third world countries like Brazil and India.
I am hoping this could be utilized by those living in the US who also don't want to use the dollar. The surveillance has grown too large and I don't trust my own money. The IRS requires all transactions sent to them if they total $600 or more on a payment app. Why would I want my money in US dollar when the Euro has vastly more robust protections and less corruption?
This is interesting and poignant less because of the digital currency aspect and more because of the geopolitics. In a world where technology touches everything, tech itself becomes political.
The boulder that is de-Americanization has rolled too far downhill now and gained too much momentum; it can no longer be stopped.
The two thirds of Americans who either voted for Trump or couldn't be bothered to vote against him because they aReN't PoLiTiCaL are going to have to come to terms with their new place in the world one way or another. The US is no longer seen as a stable military partner[0], nor a stable economic partner as evidenced by TFA. It's easy to blame Trump but he is merely a symptom of the root cause, which is the attitudes shared by a huge number of Americans.
America will cease to be (and in some cases already has ceased to be) the world's epicenter of geopolitical soft power, scientific innovation, and financial clout. Treaties to which the US is a signatory are not worth the paper they're printed on. The foundations have already been laid, and the de-Americanization trend can't be stopped. For a people so accustomed to feeling like a privileged special class of world citizens, I honestly wonder if the American psyche can handle it. Probably we'll see a wave of people who "never supported Trump in the first place", just like tons of Germans were "never Nazis in the first place" once it became socially unpalatable.
So, congrats, I guess. At least you guys got some people with brown skin deported.
Don't underestimate how much in bed are many of the european politicians/oligarchs with US neocon class. Trump is also problem for them. If Trump gets replaced by some moderate neocon on wave of “good old times” every one of these lobbied politicians will jump back hail comming of the golden age, buy everything american again and delete all this sovereignity out of the sky.
Trump moved overton window so much we will be fed story about how we shall be glad for the corrupted but not vulgar politicians that do barely minimum.
??? Doesn't Europe already have Wero (iDEAL in Netherlands)? That's a system for making online payments. Money gets directly debited from your bank account.
I've always found credit cards stupid. You just want to pay for something, and then suddenly you have a debt. You shouldn't be in debt when you can clearly pay with money you have. Credit card companies advertise with "super easy payments" and "buy now pay later" but at the same time the government warns all the time that "lending money costs money". Also, if your credit card number and CVC get leaked, then anybody can steal any amount of money, and your only recourse is to regularly check your statements and warn the bank within a month. Whereas with Wero/iDEAL you must authorize the exact transaction at that exact amount.
Supposedly, Americans have these "credit card rewards" loyalty program things. Doesn't exist in Europe. You can only pay, you don't get any bonuses. Which makes the only reason to have a credit card is to be able to pay in web shops that don't accept Wero/iDEAL.
I assume you never really interacted with the credit card world? E.g. most banks in Germany will give you a credit card that automatically deducts the outstanding debt at the end of the month, you can't really collect debt over time.
In addition I can deposit money on my credit card, so effectively I never have to be in debt if I don't want to. I just have to charge it up which is done in like 3 seconds in the banking app. It can even be automated.
Credit cards serve the same purpose as loans: they allow you to make a purchase in advance of expected income. There’s a reasonable civic argument that this kind of loan should be tightly regulated to stop people from ruining themselves, but the basic economics work fine for millions of Americans who pay their credit cards on time (or otherwise consider a balance acceptable given their purchasing plans).
(I don’t think the fraud distinction you’re making is as stark in practice: in the US, you’re less exposed to fraud with credit since it’s the creditor’s money, not yours. Reversing a debit transaction in the US is somewhat more involved, albeit for not-good reasons concerning the US’s aging financial infrastructure.)
The way I understand it the Digital Euro doesn't compete with Wero. It's a way for the European Central Bank to emit money in digital form. In theory that doesn't require bank accounts, and can support offline transactions. It's a pretty different concept, more like a new form of money.
Wero, SEPA, and the digital euro are complementing each others
Almost all EU credit cards are automatic debit at the end of the month, i.e. carrying over balance is not even possible. You will simply be over-drafted on the linked debit account and charged a fee + steep interest if you spend more then you have. Typically until the overdraft is resolved, no further debit card payments can be made.
The only reasons to use a CC in EU are:
- online payments where CC is the only accepted form of payment
- delay payments until after receiving wage
- hotels, car rentals, and other places that lock an amount on your card
- extra insurance provided by some more premium cards (VISA Gold etc)
Ever since 3-D Secure (2FA for CC transactions, beyond the CCV code), you have been liable for any transaction that was validated by it. Your bank may still do a chargeback as a courtesy, but that's not guaranteed.
I don't think it's primarily about being scared of debt, it's just a weird, unnecessary step in-between. I have a credit-card and even I don't understand why I should prefer it over my debit card
Setting weird rewards/cash back things aside, which is the main incentive for folks to use it over debit card in most places:
It's not fully unnecessary step in-between when fraud is involved.
If someone hacks you/deceives you and somehow they got $5000 from your debit card, then your bank account is $5000 smaller. That can impact your ability to pay rent, or whatever you needed those $5000 for.
If it's via credit card, you have a decent amount of time to contest and resolve the issue.
the disputed amount should effectively be removed from your balance or offset by a temporary provisional credit until the investigation is completed
Data shows they aren't that scared of debt, in fact some European countries have higher household debt than US, notably: Switzerland, Sweden and UK. It's pretty telling that Klarna is a Swedish company.
I've never understood this mentality. It's like walking through a dangerous neighborhood knowing that you have excellent health insurance. If you get stabbed, you'll probably recover very well, but why take the risk?
I can understand going into debt to buy a house, but I can't understand going into debt to buy a can of tuna. Why take an unnecessary risk?
Paying with credit card gives you at least some leverage when a merchant doesn't hold their end of the deal. Good luck getting your money back with iDEAL (it's not possible right now).
I'm not gonna use CBDC because they'll get hooked up to digital id, no matter what they're "promising" right now. This is just another shitcoin no one asked for.
That's a clear case of perfect being the enemy of good. Are CBDC privacy friendly? No, but it's better than 100% of the credit cards currently being used in Europe being part of the network of two big US companies.
> Giving Europe independence from US payments processors is a huge deal and very necessary
You do realize that US payement processor like Visa & MasterCard rely on chip technology from French company (Gemalto, now part of Thales), so these companies aren't independent from EU to start with.
Getting independence from the networks themselves, you only need to create a local competitor ...
And those has been existing for multi-decades in each country. E.g. Carte Bleue(France) Bancomat (Italy), Bizum (Spain), SIBS (Portugal) etc.
Just merge those into a bigger more ambitious network
"EuroPA" is exactly that effort. A digital euro is completely orthogonal to that effort.
Crazy people don't see how dystopian and dangerous the concept of a centralized digital currency is...
GDPR could have been great, if it was actually enforced in the way it was intended. Cookie banners and dark patterns are not actually allowed, but without enforcement, it's basically meaningless.
IMO the biggest issue is that the member states are individually required to set up agencies to police this. This makes perfect sense for local companies, but is meaningless against large entities that operate across the entire EU.
You can report issues to your local watchdog. That takes quite some time, given the large amount of companies that do not follow the law, but it is enforced
Large entities (companies right?) take that very serious. Its the other way around, small companies might not be aware of.
Nonetheless, i have seen in a very small company that we changed the behaviour of a camera which then only turned on when the action expected it and not before.
And in a very big company you alway have to fullfill it as a product standard.
I hope that they don't fall into the same trap that a lot of EU projects fall in to: only solving one problem.
My VISA card is not only a convenient payment method, it also forces ATM operators to give me cash without any extra fees. In Germany the EC card used to be THE way of paying with a card but you had to go to the ATMs of your bank, otherwise there would be sometimes pretty ridiculous fees. The kicker was that the fees were set by your home bank.
Add to that the ease of use online as well as in shops and it's easy to see that this is not going to be easy. I do root for them though, to do better than Wero.
As far as i know, your Visa provider pays for the bank ATM fee and they do this with the motivation that you pay with your Credit Card which then basically makes the merchents pay it through the credit card transaction fee which at the end you pay anyway.
I do use my credit card everywere and i'm sure ingdiba is also saving money due to not having offices/ATMs everywhere, but i wouldn't mind if something in the background changes and we can replace Visa/Mastercard with something from the EU.
What does your visa card do to force them to not charge fees?
I still see atm fees over here in the us, so it can't just be being visa. I would guess some regulation but you could get that applied to the digital euro too probably?
I've seen VISA cards with several banks in France where there is commission after 1 to 3 monthly ATM so I'd be doubtful about VISA having such as requirement.
It is indeed ridiculous. In the UK all bank cash machines are free no matter which bank you're from. My Girocard charges me 7€ for out of house withdrawals.
My Danish bank imposed a fee on using an ATM from another bank, until my income was high enough to make me a "premium" customer, then these fees were removed. The card didn't change.
I don't know why but my bank offers a VISA debit card and an EC card. I can use the VISA card on every ATM without fees and it doesn't cost me extra. The EC card has extra fees for when I want to get cash with it. I have seen other banks do the same. I think I heard that this is a VISA thing but maybe I'm wrong or misheard.
I'd rather they didn't waste time worrying about ATM's. I have used one once in the last 5 years. Almost everywhere I visit regularly doesn't even take cash now. The problem being every requirement you add to something like this is probably years of development time given it's the government(s) involved.
Reminder to the people reading this thread and overall comments, that in Europe everyone uses Debit Cards instead of Credit Cards.
Credit Card in Europe is very much associated with Debt.
Reminder to all commenters that Europe is not a single homogeneous country and somewhat diverse in various things, including payments and finance. Credit cards are definitely a thing in many European countries.
In my corner of the world, credit cards were for buying stuff on the internet and travelling outside the EU. Now the net has evelved enough to accept our normal means of payment. I always feel insecure when using a credit card.
As an outsider: which countries lean which way? I'm curious how things trend where and I didn't even really know that debit was used by a majority in certain places (Countries? Regions? Historical based delimiters?).
> Credit cards are definitely a thing in many European countries
Yes, a thing associated with debt.
I lived in the UK before Brexit, and that would be an example of such.
You are of course free to extrapolate your experience from a single European country to the whole continent, but it's still not a coherent argument for or against anything.
which ones use Credit Cards to a larger degree than Debit Cards, like they do in the US?
That's not what GP said. They claimed that "everyone" in Europe uses debit cards, and that's just not true.
Not everyone. We use both and mostly credit card for online payments that we pay off at the end of the month. It has a limit and it is easier deal with potential fraud vs a debit card where your own money goes. But does it matter? All my debit cards are Visa and Mastercard anyway.
And even when you have a credit card, it might act like a debit card (every payment shows as debit in your banking app, even if you really pay on the 10th of the month or something).
Slowly coming to a close in the US also.
Some places already of course not accepting Amex, some places not accepting Visa Infinites (CSR, Venture, etc).
The future of banking is direct. The days of free rewards at a loss are gone as premium US cards are nearing the $1,000 AF mark for luxury coupons.
which is in fact a massive pain in the ass, because car rentals and hotels often require credit cards to make reservations (at least in my experience...)
Yep, although a huge % of banks are issuing Visa and MasterCard debit cards as default nowadays.
Yes. Most people here (Austria) use their mastercard debit card to pay cashless. You get them at 14 already IIRC.
Note to Europeans:
Americans use credit cards and rarely debit cards because here the terms on debit cards are so much worse (for contesting charges, etc), so debit cards never really caught on for anything more than withdrawing cash.
In the US, users of debit cards are assumed to be uncreditworthy, because debit cards in the US have such bad T&C's that poor credit score is the main reason folks use them here.
Eu: Most of the people I know use debit rather than credit because we can manage our finances.
How exactly does “we can manage our finances” follow from picking debit over credit?
Can't go into debt if you don't have a line of credit.
And most Europeans that have a credit-card need to pay them off at the end of the month. Technically they are charge cards. Unlike a traditional credit card, a charge card does not allow you to carry a revolving balance.
This is not true. Plenty of Europeans have credit cards which work exactly like US credit cards.
The main difference between credit cards in Europe and in the US is that poor people can't get them here.
Let's not pretend that predatory lending is not a thing in at least some EU countries as well, just because it takes other forms (installment payments, buy now pay later etc.), but as a general trend, I'd agree that it's much less common.
Can we please cool it with the sweeping "most/all of Europe" assertions? This, just like credit use overall, is also highly country/region specific.
The article uses the term credit card for apparently no reason, because Visa and Mastercard also support debit cards. The EU is probably more concerned about Visa and Mastercard payment networks being under the control of American leaders.
We call every card a credit card even if most of them are actually debit.
we dont in spain, we call it "tarjeta de debito" and "tarjeta de credito" or just "la tarjeta" or the card.
And in Italy many people say Bancomat when they want to pay with the card even if they don't have a card with that circuit anymore.
I'm in Europe and I can't say this is the case at all. I've never heard anyone express such an idea.
Did you grow up in Europe?
It is a prevalent view among the lower socioeconomic classes.
Among the middle and higher as well.
Can someone tell me why the EU doesn’t develop something like RuPay?
Indian UPI gets mentioned a lot, but when Visa, Mastercard didn't agree with data sovereignty rules among other rules, India quickly developed RuPay [0]. Now most debit cards in India are RuPay. CCs stand at 18% share.
They also integrate seamlessly to UPI.
Why doesn’t the EU consider something like that? They want to jump direct to digital currencies? Is that it? Something else?
[0]: Data rules came in 2017/18, RuPay was developed in 2012 iirc. But it got unprecedented push after the rule.
It took some time but RuPay branded CCs are also available. I have been using them for the last 2-3 years at least. They work, mostly, with UPI.
Some merchants disable RuPay CC payments even when they don't get charged merchant fees till the payment crosses the INR 2K threshold.
Strangest thing is when I can pay the guy pushing a handcart around selling vegetables using a RuPay CC while a medical store refuses to accept it.
This is literally what the article is about - Digital Euro and Wero are two competing solutions that are debated right now.
Wero isn’t a physical card if I am getting this right.
RuPay is.
You get a physical cc/dc with RuPay as provider instead of MC/Visa.
If I am not missing something, Wero is not that.
That is what I wanted to know: why not a traditional, homegrown card that is a direct 1-to-1 alternative of MC/Visa cards? Does that not make sense for the EU now? Why?
> why not a traditional, homegrown card that is a direct 1-to-1 alternative of MC/Visa cards
Because the European market is fragmented. France, Italy, Germany, etc all have some sort of established localized payment system and in some states like Ireland and the Netherlands are entirely dependent on Visa.
There is no "pan-European" bank and individual states still care about their sovereignity. France will continue to back and support BNP and Credit Agricole against Germany's Deutsche Bank (and vice versa). The only solution at that point is to just bypass the whole problem and just go directly with mobile payments.
Additionally, China, India, and Brazil began building their DPD stack in the 2000s but European states didn't start until the last 2-3 years.
They are, it’s called Wero. It is a stopgap, and sits on top of SEPA.
Goodbye Visa and Mastercard: 130M Europeans switching to sovereign payment - https://news.ycombinator.com/item?id=48207004 - May 2026 (777 comments)
Wero – Digital payment wallet, made in Europe - https://news.ycombinator.com/item?id=47038965 - February 2026 (132 comments)
Europe's Banks Launch Wero Payments to Dislodge Visa, Mastercard - https://news.ycombinator.com/item?id=41666833 - September 2024 (88 comments)
Unofficial Wero Adoption Tracker - https://www.werotracker.eu/
https://en.wikipedia.org/wiki/Single_Euro_Payments_Area
Is Wero something you can hold in your hands?
RuPay is just like Visa/Mastercard in the sense you get physical cards that you can use at ATMs, use at ecomm sites, etc.
Wero doesn’t seem to be that. Am I missing something? Does making a new direct alternative to Visa/MC doesn’t make sense for the EU? If so, why?
Cards (as implemented in the US at least, i.e., with individual purchases not confirmed by the cardholder) are a relic of a different time in many ways.
If you're building out a brand new system, why not make use of the computing device with input/output capabilities (that can be used to confirm amount, payee etc.) almost everybody already has in their pocket/purse anyway and instead rely on merchants being honest and only taking what they're owed out of your account without your confirmation?
Of course physical cards will also play some role in any future EU payment system, if for nothing other than resiliency (a card works without any battery and is cheap to keep in a drawer or suitcase as a backup for a stolen phone) and sovereignty (note who makes most phones' operating systems and runs their attestation providers).
Okay, thanks. I get it.
ATM cards are still safer than mobile based payments.
Elderly fraud in the US, scam/fraud calls and digital arrests in India are made possible by social engineering attacks and duping people.
For ATMs, if one has online transactions turned off (default option when you get a new card in India for most if not all cards), it is impossible. One has to walk to an ATM in a crowded place, insert the card, enter a PIN, and can only then withdraw money.
Millions in India use debit cards this way.
> ATM cards are still safer than mobile based payments.
> For ATMs, if one has online transactions turned off (default option when you get a new card in India for most if not all cards), it is impossible. One has to walk to an ATM in a crowded place, insert the card, enter a PIN, and can only then withdraw money.
So you're really saying that not being able to transact cashlessly at all is safer than being able to do so? I'd agree, but it's also somewhat inconvenient.
The largest payment systems in the world, in China [1] [2], India [3], Brazil's Pix [4] etc, leverage QR codes and other non card primitives for moving value. You can encode EMV [5] in a QR code [6].
> Wero doesn’t seem to be that. Am I missing something? Does making a new direct alternative to Visa/MC doesn’t make sense for the EU? If so, why?
To avoid US government control of your payments and US corporate payment processor extraction of value via your payment flows. How do you avoid someone else controlling your infra? You instantiate, operate, and maintain your own infra. Brazil runs their instant payment system Pix for ~$10M/year, for example. The cost is very reasonable to do so.
[1] https://old.reddit.com/r/AskAChinese/comments/1qgq6ya/why_di...
[2] https://www.brookings.edu/articles/chinas-digital-payments-r...
[3] https://easebuzz.in/explainers/upi/upi-qr-code/
[4] https://dev.to/woovi/how-does-pix-qrcode-work-5e3k
[5] https://en.wikipedia.org/wiki/EMV
[6] https://www.w3.org/2020/Talks/emvco-qr-20201021.pdf
It's simple: banks don't want the people they've fleeced to realise that they no longer have a role in the present age. If you let legal tender be exchanged directly via a central bank (which is semi-public by nature), banks lose a huge amount of liquidity that fuels fractional-reserve banking through loans made to generate massive amounts of cash, and without these, the banks are bust.
In many countries, at least some banks are nationalized. India’s biggest bank SBI (State Bank of India) is a PSU (Public Sector Undertaking).
UPI still connects with bank accounts.
My question was about something else: why EU doesn’t try and develop a homegrown card provider? It would provide exactly what MC/Visa does. Are we beyond that point in terms of technological advancement? Some other reason?
How does digital euro replace credit cards? That's basically the same as direct debit. It doesn't address the reason why I use credit cards.
I use credit cards as a proxy for my bank accounts. I know that my issuing bank will protect me from all fraud so I don't have to worry about losing money if I buy something from a fraudulent merchant. I also know I can do things like chargebacks if I have to.
None of this is addressed by digital currency, it's basically like using cash which is haphazard today when there are so many scams everywhere around the world.
In EU most people use direct debit. The term "credit card" is almost synonymous with debit. Chargebacks theoretically exists but they are more complicated, I don't know anyone who ever did that.
Maybe in the past, but nowadays you can call your bank for a charge back or you have an option in the banking apps
I do have to say though, that with customer protection laws we have it has never happened to hear about a friend getting a charge back from the bank, usually you go to the seller first (or the platform if you got scammed) and you get refunded there
The bank, at least all of mine, will ask for proof that you tried to resolve it first with the seller, so that is why I believe.
I’m European and protection laws are nice to have but if a shop doesn’t refund you those laws don’t automatically give you your money back. That is where a credit-card comes in handy. I don’t know any bank that offers this protection on a debit-card.
Yes, but even then you can usually go to the bank, at least in italy despite not being called chargeback you can ask a refund for scams or similar issues. More modern fintech banks give you this option directly in the app, otherwise you might need to chat with an operator
At least here I see online that there's the possibility to do so (even with debt cards). However, I guess that with a credit card it is going to be less annoying for you, or any way easier for you, since it's their money on the table and not yours
I'm talking about italy btw
Edit I also think that prepaid cards here are what have less protection
Do you mean debit cards? With very few exceptions, you can't pay with direct debit in-store, and for online payments at merchants that don't know/trust you yet as a customer it's also pretty uncommon.
Yes, but the EU is quite diverse.
I have some Irish friends. And Ireland seems similar to the US when it comes to credit card usage (vs debit). I assume that is because Ireland is heavily influenced by US and UK banking habits. On other hand, Germans only use debit cards.
I am Irish and in my experience most people use debit cards these days. I have a credit card but almost never use it.
I assume this is my “bounded rationality” / “bubble” bias (my impression was based on the people I know and not the full picture)
I checked the stats, and about 40% of purchases in Ireland are made by credit card. In the US, it is around 70%.
Most people in the EU use debit cards, they additionally use direct debit specifically for utilities, gym memberships, etc.
How do you deal with fraud and people cleaning out your bank account money rather than OPM of a credit card company? Just have enough spare cash for a burner checking account and wait for the fraud reversal?
In the US you'll almost always get your money back if someone defrauds your debit card but you could be in for a painful time if you depend on the money in that checking account until it gets fixed.
Banks suck it up, but fraud is likely a lot less prevalent because 3D Secure is mandatory for online transactions and chip and PIN were ubiquitous way before the US seemed to have started using it.
The US still hasn't started using PINs for all credit and most debit transactions, and at this point it doesn't look like it ever will.
Apple and Google Pay are just as (if not more) secure anyway for the majority of transactions, and a long tail of US restaurants, hotels, corporate card issuers, rental car agencies etc. will simply never change their legacy flows. There are just too many incumbent stakeholders.
SEPA Direct debit still has a confirmation from the account holder. You usually see the pending transaction before it clears and can block it. Some banks (dreadful and hated bunq for example) require an active confirmation from the account holder before it is allowed to clear. Some have a setting hidden somewhere that sets the policy to autoaccept or something else.
I haven't ever seen illegitimate direct debit. I guess you need to have an actual business to issue direct debit orders and bank will show you the door and freeze your money if you start doing funny things. I guess.
Probably the dreadful R word has something to do with it, go figure.
On cards we also have limits and the only time I saw something happening was after being unfortunate enough to pass through ~~the ghet~~ the glorious capital of our continental Empire, majestic city of Brussels. That time the bank tried their best to call me.
2FA on online transactions, secure PIN authentication for in-person purchases.
These reduce the level of fraud, and the banks cover the rest.
The basic stuff (online shop not delivering, going bankrupt etc) are covered for debit cards in a similar way as credit cards in other countries.
I've never had a fraudulent transaction myself, and it's over 20 years since I first had a debit card — with a chip and PIN.
Yes, I think most people have several accounts, or at least a main and a "spare money" account. If you can prove a fraud the law mandates the bank to back it up. In EU bank apps there are often many warnings and popups when authorizing a transaction. Also in EU you can get a refund of any digitally made purchase, by law you can send back the item for 30 days.
Chargeback always seemed strange to me and never needed it. Fraud should be reported and handled at the root, not by making digital transfers into some magic disappearing money.
Never had fraud on my credit or debit cards, and with 3D Secure it's difficult to pull off (basically 2FA for all online credit card purchases).
But I did have someone fraudulently making direct debit transfers from my bank account. My bank cleaned that up within three business days
can you give an example of being defrauded? I don't really know what people mean when they say that.
The only place I (as an EU citizen) ever came in contact with direct fraud was in... US.
It's not much of an issue within the EU area. The banks tend to offer insurance products for people who want to cover that risk.
These insurances are the greatest sales trick of all time: Banks selling you something they're legally required to provide for free already.
I don't think people keep all their money on a single account. I have 20 in my bank (different savings, some foreign currency accounts, etc.), and only one is tied to my debit card. I move money there when I need it. Opening another account number is just few clicks away. There is a limit for it also.
Single account sounds more like a boomer thing.
So you're really using credit cards as a proxy for a consumer-friendly (at least with regard to fraud/disputes) payments product.
Credit cards being more consumer friendly than bank transfers is usually an artifact of the concrete implementation, not the abstract concept. In many EU/SEPA countries, returning a direct debit is much easier than a chargeback in the US, for example. In some countries, people even consider credit cards as less secure because filing a chargeback takes marginally longer with most banks (and requires a letter as opposed to a single click in online banking).
If the digital euro is to succeed, it'll of course have to compete with cards on the usability side as well.
It's not just the chargeback process; it is that fraud actually removes money your account potentially causing other payments, like your mortgage, to default. With a credit card you have a month to get things straightened out before a payment is due.
As long as you don't go too far below zero, payments will go through. This may differ a bit per country.
I was wondering about this. I wonder if there are insurance products to close this gap? Or maybe some banks offer accounts with different kinds of purchase protection.
I'm with you. While I'm no fan of the risk involved with missing a CC payment, there's a mountain of difference between credit and debit when it comes to fraud. It's literally you trying to get your money back (debit) versus some giant corporation trying to get _its_ money back (credit).
There are still protections from the bank/visa/mastercard network.
Somebody somehow stole my card credentials (online i think) and managed to get money out of my debit account through some obscure way without 2FA. The money disappeared but transactions showed up as “uncleared” and after few days i had money back. My bank said that i have to wait for the transactions to clear before they can start the transaction dispute because now it's in network hands.
For a lot of Americans the credit card system is another tax on being poor:
People with stable jobs and good credit qualify for no-fee credit cards with rewards / cashback. As a consumer you benefit financially from having a credit card. Those elsewhere in the thread worried about "debt" - you just set to auto-withdrawl the entire balance of the card every month from your bank account. Now you have free money. I can't think of a reason not to take advantage of this system in some way.
But people with unstable jobs and poor credit help subsidize these "higher-end" credit cards when they pay high interest rates on their because they missed payments or hold a balance over multiple months. For those people credit cards could help with monthly cashflow issues but are essentially a scam and not much better than payday loans.
Yet another system that American consumers are kind of forced to participate in that's a sort of tragedy of the commons (high-reward cards wouldn't exist without the exploitation of other people not savvy enough to avoid high interest and fees)
There is no such thing as free money, you're paying for it somehow. Maybe higher processing fees, maybe beggars on the streets and a society out of whack.
> How does digital euro replace credit cards? That's basically the same as direct debit. It doesn't address the reason why I use credit cards.
Exactly, it is just their latest marketing move to have people accept it.
I was in a meeting at the ECB 6 years ago, the digital euro was high priority and we were supposed to see the first pilot 5 years ago.
The project is actually older and I saw schematic of the system and screenshot and the management interface 6 years ago. It was developed by a German company.
I am not sure why we are not using it right now... it can either be:
- the urgency, like upcoming financial collapse, disappeared,
- the bank lobbied so hard they killed the previous design,
- the EU is just insanely incompetent.
Your transactions aren't tied to some provider in New York blocking you over night?
Please elaborate.
Which provider in New York are you referring to?
It’s fancy instant payments, which most of the developed world already has. The question is which unnecessary intermediaries do you continue to remove as you refactor legacy financial infra.
Credit card rails are expensive legacy rails, that part of the stack is the target to disrupt in this context. In the context of the digital euro, you can think of it as a demand deposit account backed by the central bank (as most fiat deposit accounts are in some way) that is portable between banks, like you’d move a US investment account that can hold securities between brokers with ACATS at the clearinghouse.
https://news.ycombinator.com/item?id=48415854 (recent subthread with some related context)
Global instant payment system map: https://www.pymnts.com/wp-content/uploads/2025/05/PYMNTS-Rea... [pdf]
>It’s fancy instant payments
That's a massive oversimplification, and doesn't even address the OP's point that directly challenges this.
Lot of errors in your post.
Not to mention the fact that you confuse Mastercard and Visa for "credit card rails" further underscores this.
The exact technical details aren’t terribly relevant imho, just that the EU has found the will to implement a superior value storage and transfer system, a benefit of which is avoiding US entities and infra. I have intentionally simplified for the layman audience, and understand if you take issue with my simplification.
Your comment history shows a decidedly anti EU sentiment, including against EU sovereignty (https://news.ycombinator.com/item?id=48515118, for example), make of that what you will.
> How come the EU is making a "digital sovereignty" push? Why are only EU people allowed to compete for EU services? Are there no evil people in the EU?
I like tech that improves efficiency (disintermediating unnecessary US commercial payment processors) and decouples from proven threat actors and nation state aggressors, that is my interest on this topic, ymmv.
We just don't have that much fraud instead.
I don't have numbers for you, but I do know that every European I know is much more worried about card fraud than the Americans I know. One quick example is that the Europeans get very nervous when the waiter takes the credit card away from the table in the U.S.. This is just not done in Europe because there is a (at least perceived) history of skimming in much of Europe.
One big difference is that in the U.S. cardholders are largely protected from credit card fraud (not debit card fraud), so the card vendors have to take the risk and so have robust anti-fraud measures (both before and after payment). Largely it is the merchants who have to prove that there was no fraud. Whereas in Europe the burden of evidence (not proof) is with the cardholder.
US card fraud rate is significantly higher than in the EU. In 2015 it was about 0.042% in the EU, vs 0.1388% for the US. The 2021 rates for the EU fell to ~0.028%.
You get nervous about giving your card to a waiter because you’re in a foreign place with a nonsense payment system worst than most developing countries and it’s not something you’re ever asked to do anywhere else.
It's seem completely crazy to me to give your card to a waiter.
Yes, because handing over your card to a stranger is considered a fairly crazy thing to do in most countries other than the US, as cards require PIN entry for most transactions (which actually does meaningfully prevent in-person card fraud).
In the US, you simply have no choice if you want to eat in a restaurant, so people are used to it. I'd expect total skimming rates to be higher in the US, since magnetic stripe transactions have been phased out in effectively all other countries. People don't care because they don't directly pay for the resulting fraud out of pocket. As a society, of course everybody still pays for it.
> Largely it is the merchants who have to prove that there was no fraud
No, in-store, it's the issuing bank that's liable, even in the US (unless the card is PIN-preferring, which is usually only true for foreign cards).
Taking a card away from the table is weird for us because it's not what we do here so it becomes suspicious. Even so skimming is much less of a problem since chip and pin were introduced. Nobody I know has had any issues with fraud. We also require 2fa for online purchases.
There's also a large difference between counties. In the Nordics its ubiquitous, I haven't carried or needed cash for almost 20 years. Meanwhile Germany has barely started to use cards.
Also clears the way to control how the digital euros can be spent.
No thanks.
Ideal/Wero is good.
Use my credit cards for larger online payments. Mainly because it has insurance and makes it easy to dispute something.
Last year a large Swedish clothing brand didn’t deliver 400 euros worth of clothing. They said they did. I have nothing. Customer service unhelpful. I disputed it with the bank where I have the credit card. The same day it was fixed.
I'd rather have a democratically elected government in control than an unelected company that actively uses its power to censor things it doesnt like. [0]
[0] https://www.theguardian.com/world/2025/jul/29/mastercard-vis...
Except that parts of the union are not democratic at all.
And in this specific case I kinda of agree with what they banned. And they are definitely not the only ones. Lots of financial institutions block these kind of things.
That seems like a rather big statement to make without anything to back it up.
This has been de facto true for a while, not that it improves the situation. Various EU countries have legal limits for the size of cash transactions, requiring you to do it via a bank.
The idea that people have private property does seem to be something governments are incredibly keen to erode.
Here is a more technical description: https://link.springer.com/article/10.1007/s12525-025-00822-7
I am still not quite sure how this would affect my day-to-day (private) payment experience transaction cost etc.
But is has strategic value for Europe:
> [...] European dependencies in critical technologies. A digital euro could mitigate these developments in the medium term if the infrastructure is mainly operated by European companies and if European payment service providers manage to achieve a leading position in the evolving ecosystem for digital euro services.
Some more: https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse...
i hope the thing they roll out is a straight copy of pix from brazil. its fast, reliable, cheaper than debit cards and private (not anonymous but only the central bank can see your info). no corporations involved outside of support contracts and no stupid limits to make banks happy like this new proposal.
and there should be a right to use all payment methods in the constitution or whatever the eu equivalent is. all stores must accept digital euro and physical stores also accept cash. crypto shouldnt be a part of the system but protected from being made illegal in any member state, privacy coins especially.
How much you wanna bet that digital euro implementations will in practice depend on two US corporations? The EUDI wallet implementations being rolled out seem to so far. (Apple and Google, in case it wasn't obvious.)
The goal is to detach your transaction from a new York based point of failure.
This seems different than a credit card account though? I buy everything with my credit cards because I don't want to swipe my bank card at random merchants.
This tells me you are likely from North America?
Credit Card usage is really different between those regions. While I lived in EU, I rarely used credit cards (even paying online works with debit cards). But in Canada/US, I almost exclusively pay with credit cards now when shopping. Although in fairness it took me a few years to get in the habit of using credit cards and 'collecting points'.
This is not an issue in Europe (and really in most if not all countries other than the US at this point), since both credit and debit cards require a PIN for all non-trivial payment amounts.
it's about the payment processors, not the card type, though the article makes it confusing by mentioning credit cards as it's really not about that at all
https://www.ecb.europa.eu/euro/digital_euro/faqs/html/ecb.fa...
Read the FAQ, it's about no longer relying on US payment processors for handling transactions in a different country that may not support your country's payment system
A vast majority of card transactions in the EU are done via debit card. Credit card accounts for only around 25% vs debit. And the only place I've swiped my card was once, in the US, about 15 years ago.
> Credit card accounts for only around 25%
If this is true then what will this new "digital Euro" change about the reliance on US credit cards? It seems that the 25% of people that are swiping US credit cards are doing it for the convenience and benefits of using a credit card. Will this digital euro change that?
The headline is probably written for an American audience, or for brevity.
It should say "Digital euro clears key hurdle as EU seeks to break free from U.S. debit and credit card processors". Most debit cards in the EU are either Visa or Mastercard, although there used to be more local/national systems.
European banks offer the credit, but the payments infrastructure currently goes through US companies. The first step is to get those payment processors out of the picture.
In Brazil, which is further along in the transition to digital cash, PIX already supersedes debit cards. Some banks already offer deferred PIX payments, wherein the merchant receives the money right away and the buyer pays their bank later, with interest. The central bank is also developing a "pix with guarantee", which will compete with credit cards: payment would be agreed to be settled at a later date, with the bank guaranteeing that the merchant will receive the money.
Debit cards usually also use the Mastercard or Visa payment networks.
Even though I and the supermarket I go to are both part of SEPA and I can issue a bank transfer that will clear ~instantly, today cashless payments still involve EMV for various reasons.
Debit cards also use Visa and Mastercard
Debit cards are also mostly visa/mastercard.
They mean reliance on US bank cards.
How does that make any sense? You're saying that 75% of Europeans use American bank accounts?
A bank card is a type of card. Credit cards and debit cards are both bank cards. Prepaid cards are another type.
With any type of bank card, there's a bank that guarantees to a merchant that they will later receive a payment. With a debit card, the guarantee is backed by money you have on deposit. With a credit card, it's backed by the bank's money, which is higher risk for the bank.
Two US companies, VISA and Mastercard, have big networks for processing transactions with bank cards. These networks act as intermediaries to connect merchants (who want to accept payments) and banks (who issue cards) together. It's much simpler for a merchant to send a request to (say) VISA than to figure out which bank issued each customer's card. The payment networks also define, publish, and enforce standards and rules for the payment process.
These networks aren't banks. But they are, in a sense, bank card companies because they are part of the bank card system.
So in other words, European consumers have an account at a European bank that issues them a card they can use for purchases at European businesses, but US networks connect it all together.
US “bank cards” as in US payment processors such as Visa, not “US bank” cards.
Visa and Mastercard are both US companies and they issue both debit and credit cards. If you have a UK or EU bank account with a Visa or Mastercard, regardless of currency or whether it's debit or credit, you are still ultimately reliant on US companies to clear transactions every time you use it. That's what the EU want to reduce.
On an article like this, I encourage anyone giving an opinion based on their own experience to say what country it's from. (Or have this in their profile.)
It's the Internet. Just assume they are American unless otherwise specified.
This sounds like "government issue Revolut". Which would be... low-key nice? Not a nefarious scheme, not a revolutionary future of money, just something to replace a certain part of your financial life without tying it to a commercial entity. Which might be appealing to the anti-capitalism segment of Europeans.
> The approval of draft rules by the economic committee of the European Parliament comes after three years of wrangling between the ECB and banks, which have been concerned about deposit outflows and lost revenues and sought to limit the scope of the project.
This kind of thing is why I'm optimistic both about Bitcoin and fiat currencies in third world countries like Brazil and India.
Still faster than increasing the block size limit in bitcoin
I am hoping this could be utilized by those living in the US who also don't want to use the dollar. The surveillance has grown too large and I don't trust my own money. The IRS requires all transactions sent to them if they total $600 or more on a payment app. Why would I want my money in US dollar when the Euro has vastly more robust protections and less corruption?
might be time the europeans get a little democracy
Related:
European Parliament committee backs digital euro - https://news.ycombinator.com/item?id=48645468 - June 2026
This is interesting and poignant less because of the digital currency aspect and more because of the geopolitics. In a world where technology touches everything, tech itself becomes political.
The boulder that is de-Americanization has rolled too far downhill now and gained too much momentum; it can no longer be stopped.
The two thirds of Americans who either voted for Trump or couldn't be bothered to vote against him because they aReN't PoLiTiCaL are going to have to come to terms with their new place in the world one way or another. The US is no longer seen as a stable military partner[0], nor a stable economic partner as evidenced by TFA. It's easy to blame Trump but he is merely a symptom of the root cause, which is the attitudes shared by a huge number of Americans.
America will cease to be (and in some cases already has ceased to be) the world's epicenter of geopolitical soft power, scientific innovation, and financial clout. Treaties to which the US is a signatory are not worth the paper they're printed on. The foundations have already been laid, and the de-Americanization trend can't be stopped. For a people so accustomed to feeling like a privileged special class of world citizens, I honestly wonder if the American psyche can handle it. Probably we'll see a wave of people who "never supported Trump in the first place", just like tons of Germans were "never Nazis in the first place" once it became socially unpalatable.
So, congrats, I guess. At least you guys got some people with brown skin deported.
[0] https://www.readtheline.ca/p/matt-gurney-we-will-never-fucki...
Don't underestimate how much in bed are many of the european politicians/oligarchs with US neocon class. Trump is also problem for them. If Trump gets replaced by some moderate neocon on wave of “good old times” every one of these lobbied politicians will jump back hail comming of the golden age, buy everything american again and delete all this sovereignity out of the sky.
Trump moved overton window so much we will be fed story about how we shall be glad for the corrupted but not vulgar politicians that do barely minimum.
> giving Union citizens the freedom to opt to pay with central bank money
Because nothing speaks freedom more than a crazily centralized digital currency
/s
It's centralized right now, digital or not, around the two major US payment processors (Visa and MasterCard).
??? Doesn't Europe already have Wero (iDEAL in Netherlands)? That's a system for making online payments. Money gets directly debited from your bank account.
I've always found credit cards stupid. You just want to pay for something, and then suddenly you have a debt. You shouldn't be in debt when you can clearly pay with money you have. Credit card companies advertise with "super easy payments" and "buy now pay later" but at the same time the government warns all the time that "lending money costs money". Also, if your credit card number and CVC get leaked, then anybody can steal any amount of money, and your only recourse is to regularly check your statements and warn the bank within a month. Whereas with Wero/iDEAL you must authorize the exact transaction at that exact amount.
Supposedly, Americans have these "credit card rewards" loyalty program things. Doesn't exist in Europe. You can only pay, you don't get any bonuses. Which makes the only reason to have a credit card is to be able to pay in web shops that don't accept Wero/iDEAL.
I assume you never really interacted with the credit card world? E.g. most banks in Germany will give you a credit card that automatically deducts the outstanding debt at the end of the month, you can't really collect debt over time.
In addition I can deposit money on my credit card, so effectively I never have to be in debt if I don't want to. I just have to charge it up which is done in like 3 seconds in the banking app. It can even be automated.
Lastly credit cards with bonus programs definitely exist in Europe. Cashback variations are the most common ones, but all kinds of programs exist. E.g. Eurowings has one https://www.eurowings.com/de/ihre-vorteile/kreditkarten/uebe...
Credit cards serve the same purpose as loans: they allow you to make a purchase in advance of expected income. There’s a reasonable civic argument that this kind of loan should be tightly regulated to stop people from ruining themselves, but the basic economics work fine for millions of Americans who pay their credit cards on time (or otherwise consider a balance acceptable given their purchasing plans).
(I don’t think the fraud distinction you’re making is as stark in practice: in the US, you’re less exposed to fraud with credit since it’s the creditor’s money, not yours. Reversing a debit transaction in the US is somewhat more involved, albeit for not-good reasons concerning the US’s aging financial infrastructure.)
At least in France, most of what people call "credit cards" are actually debit cards.
Yeah most EU citizens never had a credit card but they call them credit cards anyway.
The way I understand it the Digital Euro doesn't compete with Wero. It's a way for the European Central Bank to emit money in digital form. In theory that doesn't require bank accounts, and can support offline transactions. It's a pretty different concept, more like a new form of money.
Wero, SEPA, and the digital euro are complementing each others
Europeans being so scared of debt is so funny. Just pay off your card every month.
The liability model is completely different in the US from Europe w.r.t. merchant vs bank.
The interchange fees are much much higher in the US, which is what pays for the rewards. Europe has an artificial cap.
Almost all EU credit cards are automatic debit at the end of the month, i.e. carrying over balance is not even possible. You will simply be over-drafted on the linked debit account and charged a fee + steep interest if you spend more then you have. Typically until the overdraft is resolved, no further debit card payments can be made.
The only reasons to use a CC in EU are:
- online payments where CC is the only accepted form of payment
- delay payments until after receiving wage
- hotels, car rentals, and other places that lock an amount on your card
- extra insurance provided by some more premium cards (VISA Gold etc)
Ever since 3-D Secure (2FA for CC transactions, beyond the CCV code), you have been liable for any transaction that was validated by it. Your bank may still do a chargeback as a courtesy, but that's not guaranteed.
> The interchange fees are much much higher in the US, which is what pays for the rewards.
You're just raising the price for everyone for the sake of Visa & Mastercard's profit. Europe's cap makes a ton of sense.
I don't think it's primarily about being scared of debt, it's just a weird, unnecessary step in-between. I have a credit-card and even I don't understand why I should prefer it over my debit card
Setting weird rewards/cash back things aside, which is the main incentive for folks to use it over debit card in most places:
It's not fully unnecessary step in-between when fraud is involved.
If someone hacks you/deceives you and somehow they got $5000 from your debit card, then your bank account is $5000 smaller. That can impact your ability to pay rent, or whatever you needed those $5000 for.
If it's via credit card, you have a decent amount of time to contest and resolve the issue.
the disputed amount should effectively be removed from your balance or offset by a temporary provisional credit until the investigation is completed
> If someone hacks you/deceives you and somehow they got $5000 from your debit card, then your bank account is $5000 smaller.
That's a myth. I had my debit card cloned and some money stolen. The bank gave my money back. Debit cards are protected too.
Data shows they aren't that scared of debt, in fact some European countries have higher household debt than US, notably: Switzerland, Sweden and UK. It's pretty telling that Klarna is a Swedish company.
https://en.wikipedia.org/wiki/List_of_countries_by_household...
10ct vs % of the value. The consumer is paying for that.
But I guess it’s the same logic as the tipping point/ salary culture in the US.
Or the fact that sales tax is not always included in the price.
Your liability comment would mean though that the EU should use it and USA shouldn't.
EU has low fees for transfer, USA has high fees for transfer but apparently its easier for an US Citizen to dispute something.
At least as far as i'm aware, if i send money to someone else, its gone.
Whats that artifical cap?
> Europeans being so scared of debt is so funny.
I've never understood this mentality. It's like walking through a dangerous neighborhood knowing that you have excellent health insurance. If you get stabbed, you'll probably recover very well, but why take the risk?
I can understand going into debt to buy a house, but I can't understand going into debt to buy a can of tuna. Why take an unnecessary risk?
Paying with credit card gives you at least some leverage when a merchant doesn't hold their end of the deal. Good luck getting your money back with iDEAL (it's not possible right now).
I'm not gonna use CBDC because they'll get hooked up to digital id, no matter what they're "promising" right now. This is just another shitcoin no one asked for.
That's a clear case of perfect being the enemy of good. Are CBDC privacy friendly? No, but it's better than 100% of the credit cards currently being used in Europe being part of the network of two big US companies.
There is no bank account that isn't linked to your id already.
You don't have to use it. you can continue to use your bank account (which is linked to your id, obviously)
Aren't your transactions with your bank already hooked up to your identity?
>> This is just another shitcoin no one asked for.
Giving Europe independence from US payments processors is a huge deal and very necessary.
> Giving Europe independence from US payments processors is a huge deal and very necessary
You do realize that US payement processor like Visa & MasterCard rely on chip technology from French company (Gemalto, now part of Thales), so these companies aren't independent from EU to start with.
Getting independence from the networks themselves, you only need to create a local competitor ...
And those has been existing for multi-decades in each country. E.g. Carte Bleue(France) Bancomat (Italy), Bizum (Spain), SIBS (Portugal) etc.
Just merge those into a bigger more ambitious network
"EuroPA" is exactly that effort. A digital euro is completely orthogonal to that effort.
Crazy people don't see how dystopian and dangerous the concept of a centralized digital currency is...
CDBC doesn't necessarily imply blockchain. It can be just another payments system.
OMG. Wish us luck. Anything EU-mandated is bad these days.
What’s bad on replaceable or long living batteries?
what's bad about an interoperable standard for charging?
EU is very good, most of the time.
Besides this GDPR Website thing, usb-c is great, energy standards are great, etc.
GDPR could have been great, if it was actually enforced in the way it was intended. Cookie banners and dark patterns are not actually allowed, but without enforcement, it's basically meaningless.
IMO the biggest issue is that the member states are individually required to set up agencies to police this. This makes perfect sense for local companies, but is meaningless against large entities that operate across the entire EU.
It is being enforced: https://www.enforcementtracker.com
You can report issues to your local watchdog. That takes quite some time, given the large amount of companies that do not follow the law, but it is enforced
Large entities (companies right?) take that very serious. Its the other way around, small companies might not be aware of.
Nonetheless, i have seen in a very small company that we changed the behaviour of a camera which then only turned on when the action expected it and not before.
And in a very big company you alway have to fullfill it as a product standard.
And how do I exit this walled garden and pay in GBP to UK, or USD to USA, or dare I say Yuan to China.
What about RSD to Serbia? CHF to Switzerland?
You put the money in your bank account and use that to pay, or you buy the other currency. The same way you would with physical coins and notes.
Or, if the UK/USA/China set up their own pseudo-cryptocurrency, you can probably exchange digital euros for digital dollars or digital yuans.
you do standard FX... what are you trying to say?
I hope that they don't fall into the same trap that a lot of EU projects fall in to: only solving one problem.
My VISA card is not only a convenient payment method, it also forces ATM operators to give me cash without any extra fees. In Germany the EC card used to be THE way of paying with a card but you had to go to the ATMs of your bank, otherwise there would be sometimes pretty ridiculous fees. The kicker was that the fees were set by your home bank.
Add to that the ease of use online as well as in shops and it's easy to see that this is not going to be easy. I do root for them though, to do better than Wero.
> My VISA card is not only a convenient payment method, it also forces ATM operators to give me cash without any extra fees.
And that has absolutely nothing to do with Visa, but everything to do with your local banks.
I'm in Germany and haven't paid ATM fees since years. I also pretty much never use ATM since Covid
As far as i know, your Visa provider pays for the bank ATM fee and they do this with the motivation that you pay with your Credit Card which then basically makes the merchents pay it through the credit card transaction fee which at the end you pay anyway.
I do use my credit card everywere and i'm sure ingdiba is also saving money due to not having offices/ATMs everywhere, but i wouldn't mind if something in the background changes and we can replace Visa/Mastercard with something from the EU.
What does your visa card do to force them to not charge fees?
I still see atm fees over here in the us, so it can't just be being visa. I would guess some regulation but you could get that applied to the digital euro too probably?
I don't know how but AFAIK VISA has a contract clause that prohibits the issuing bank from charging their customers fees for using other ATMs.
I've seen VISA cards with several banks in France where there is commission after 1 to 3 monthly ATM so I'd be doubtful about VISA having such as requirement.
That doesn't help you if the ATM provider charges you, though?
True but that doesn't seem to be a thing here.
It is indeed ridiculous. In the UK all bank cash machines are free no matter which bank you're from. My Girocard charges me 7€ for out of house withdrawals.
Bank-owned and supermarket cash machines don't generally charge for withdrawals in the UK but there are still many third-party machines that do.
I think ATM fees are unrelated to the card type.
My Danish bank imposed a fee on using an ATM from another bank, until my income was high enough to make me a "premium" customer, then these fees were removed. The card didn't change.
I don't know why but my bank offers a VISA debit card and an EC card. I can use the VISA card on every ATM without fees and it doesn't cost me extra. The EC card has extra fees for when I want to get cash with it. I have seen other banks do the same. I think I heard that this is a VISA thing but maybe I'm wrong or misheard.
Similar situation in the US. It's common for banks to abuse their least wealthy customers.
Using a credit card generally forces you to pay fees and higher interest.
VISA has debit cards as well. I have that.
Try buying something with your card that VISA or the US government doesn’t like.
I'm rooting for the EU.
I'd rather they didn't waste time worrying about ATM's. I have used one once in the last 5 years. Almost everywhere I visit regularly doesn't even take cash now. The problem being every requirement you add to something like this is probably years of development time given it's the government(s) involved.
Germany is different. I don't need cash often but sometimes it's needed.