[petcat]

> 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?

[Symbiote]

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.

[ufo]

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.

[esterna]

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.

[IanCal]

Debit cards are also mostly visa/mastercard.

[yreg]

They mean reliance on US bank cards.

[petcat]

How does that make any sense? You're saying that 75% of Europeans use American bank accounts?

[adrianmonk]

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.

[vinay427]

US “bank cards” as in US payment processors such as Visa, not “US bank” cards.

[neilalexander]

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.

[basisword]

Debit cards also use Visa and Mastercard