[freediddy]

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.

[poisonborz]

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.

[amarcheschi]

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

[retired]

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.

[amarcheschi]

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

[mejutoco]

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.

[tlogan]

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.

[rsynnott]

> And Ireland seems similar to the US when it comes to credit card usage (vs debit).

That's definitely not the case. Many people would have credit cards, but there's a lot less incentive to actually use them than there is in the US, because the interchange (paid ultimately by the merchant) is capped at 0.3% in the EU (whereas in the US it can be upward of 3% on high-end cards). The interchange pays for the 'reward' schemes that US card issuers provide, largely. Without those, why bother?

I've a credit card, but I essentially never use it, except when visiting the US (where some vendors actually refuse debit cards, or at least used to).

[tlogan]

> Without those, why bother?

Peace of mind (that your checking account is not drained)?

[rsynnott]

How would that happen? Chip and pin has been mandatory for years, as is 3dsecure.

[tlogan]

That is not going to help if:

- someone steals your card and PIN

- the merchant turns out to be dishonest (or some misunderstanding) and you want you money back

- you fall for fraud

- the merchant mistakenly charges you, causing an overdraft on your checking account

[padjo]

I am Irish and in my experience most people use debit cards these days. I have a credit card but almost never use it.

[tlogan]

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%.

[rsynnott]

Where'd you find that stat? I can't find any stats which break out spend by debit and credit card for Ireland, but what I can find is that (as of 2024), there were 7.95 million active debit cards and 1.58 million active credit cards in Ireland (which has 5.2 million people). Given that, the 40% stat seems implausible.

[padjo]

Honestly shocked its as high as 40%. I assume that's by value not transaction count.

[mothballed]

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.

[jonathanlydall]

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.

[lxgr]

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.

[jonathanlydall]

It’s a pity that US regulators can’t manage to mandate that the dinosaurs get with the times as fraud seems to me to be an enormous burden to US consumers.

Even if fraud victims get their money back, firstly it must be an admin headache and then merchants have to cover fraud losses/insurance costs and thus mark up all their prices to make sure they do, so everyone is subsidising the fraudsters.

I presume it’s lobbying that would/does thwart any attempts at any such regulation.

As someone outside of the US I would like to be able to largely ignore this problem as just affecting people over there, but unfortunately it spills into the rest of the world.

When I last had fraud on my card it was through an online US merchant, because, like most US online merchants, they don’t use 3D secure. If they did then blocking the transaction for me would have been as simple as pressing the “it’s fraud” option when my phone would have received a “do you want to allow this transaction of $X for Y in the US?” that my bank’s 3D secure system normally sends to me.

Hopefully Apple and Google Pay will eventually help things over there.

[Symbiote]

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.

[poisonborz]

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.

[Muromec]

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.

[thyristan]

> 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.

You are guessing right. To receive direct debit transactions, your bank typically forces you into an insurance contract to cover disputed transactions, plus they block a minimum balance on your account, plus they require some overview of your company assets, in case the former two measures aren't enough. No chance to get direct debit approved as a private person or small company. And the amounts you can receive, as well as the number of transactions will be limited to your insurance coverage. And if there are more than a very small number of disputes, you are done.

Which is why for small businesses, direct debit is only viable through some intermediary, if at all.

[wongarsu]

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

[polytely]

can you give an example of being defrauded? I don't really know what people mean when they say that.

[izacus]

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.

[lxgr]

These insurances are the greatest sales trick of all time: Banks selling you something they're legally required to provide for free already.

[krzyk]

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.

[l23k4]

Most people in the EU use debit cards, they additionally use direct debit specifically for utilities, gym memberships, etc.

[lxgr]

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.

[throwaway270925]

What are you talking about? When have you last been to Europe!? Of course you can pay with debit cards all over Europe, every card terminal accepts them!

Online the same, you just use your card details like a credit card, the payment system is the same for years now anyway - thats the whole point of initiatives like this digital euro and Wero!

[AnssiH]

Direct debit is not the same as debit card. You can pay in physical stores with debit card but not with direct debit (which does not involve a card at all).

[lxgr]

Yes, that's what I was getting at.

As a side note, in some countries, it is actually possible to initiate a direct debit at the POS (since cards sometimes contain enough information to recover the IBAN, mostly for historical reasons), but this has significant risks for the merchant and is usually not worth the hassle as debit card fees are very low anyway.

[lxgr]

What number are you entering online? If it's not an IBAN but something starting with a 4 or 5, you're very likely using Visa or Mastercard, or possibly a domestic scheme. This is not the same thing at all as a direct debit, which nowadays runs on SEPA Direct Debit rails.

The Digital Euro does not exist yet, and Wero is yet another scheme (settling via SEPA instant credit transfers, I believe, but that's more of an implementation detail and doesn't change the fact that it is its own scheme with its own rules).

[BlueTemplar]

Yeah, it's uncommon, but bank wire does exist, and while (like cheques) it's typically used for paying rent / utilities / sending money to non-businesses, it does seem to become more common since it was improved to be 'instant' ?

[illiac786]

Where do you live in Europe? This has simply not been my experience at all in France, Germany, UK, Italy and Spain so far. Online shops most of all don’t take debit at all and bricks and mortar shops will accept credit more often than debit. Again, my experience. And I prefer to pay with debit because I know the shop will pay less fees. I get refused at Starbucks, random shops in train stations, etc.

[verzali]

That is not correct. You may be thinking of a prepaid card or something like vpay. Debit cards are accepted practically everywhere.

[illiac786]

Do you really pay online, like flight tickets, with your debit card, that works? I try regularly, it never works.

In shops the main issue is that the terminal they use can only read Apple Pay credit cards. If you’re using you’re banking app to pay wirelessly, it may fail to work with some merchants.

It’s not that they don’t want to accept it, the physical card would probably work (I don’t physical cards anymore), but the system is rigged to favor credit cards it seems.

[rsynnott]

> Do you really pay online, like flight tickets, with your debit card, that works? I try regularly, it never works.

Which country is your card from? Many countries used to have their own weird debit card schemes, which often worked... erratically online. This is now rare, and even where it persists (eg Germany, with girocard), cards tend to be dual branded.

[BlueTemplar]

I never had a credit card. I cannot remember having an issue paying with debit cards.

[illiac786]

Which country is your debit card issued to?

Maybe it’s specific to Germany, France

[Hikikomori]

I live in Europe and been to many countries, only have a debit card, so not sure what you are talking about here.

[freediddy]

Unless they have a direct agreement with a credit card company, most payment providers will give one-size-fits-all blended rate about 2.7% per transaction, even if it's debit.

[rsynnott]

This is incorrect; 2.7% sounds like a US merchant fee. Most payment providers have considerably lower fees for EU merchants. Larger merchants can generally get lower fees by negotiating with their payment provider (this is the case for both EU and US merchants). Having direct agreement with a network _is_ somewhat a thing, but mostly in the US, where the network's fees are less regulated.

[illiac786]

You’re talking about scheme or interchange fees? In any case, it’s much lower. I think only business cards are still an exception in Germany. Interchange fees are capped at .2 or .3% and scheme fees are much smaller.

I use a German bankcard and it will cost less to the merchant, that is the reason credit card were refused for such a long time. Covid broke this, as contactless was preferred and bankcard were not available for payment on smartphones at the time.

[l23k4]

They might be talking about a girocard https://en.wikipedia.org/wiki/Girocard

[sunshine-o]

> 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.

[pragma_x]

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).

[omnimus]

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.

[toomuchtodo]

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]

[drstewart]

>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.

[toomuchtodo]

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.

[lxgr]

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.

[megaman821]

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.

[gpvos]

As long as you don't go too far below zero, payments will go through. This may differ a bit per country.

[lxgr]

This differs a lot by country and customer. For example, in Germany, without a fixed income, you’ll usually not get access to an overdraft loan.

In the US, overdraft is generally considered a very bad thing (almost worse than the idea of credit to Germans!) and a failure of the accountholder to “balance their (figurative, today) checkbook”, and the idea of an overdraft limit as a line of credit with a defined interest rate does not exist at all.

[gpvos]

Yes, I was highlighting the difference with the US system.

Another difference is that if you know someone's account number, you can send them money but not take any out of their account. I understand it's more or less the other way round in the US.

[lxgr]

In many European countries, "anybody" can take money out of your account, but you can return a direct debit for up to 13 weeks in case of unauthorized payments, and for 8 weeks for no reason whatsoever (including you just feeling like spending the money on something else).

Practically, the bank allowing a merchant to submit direct debits takes on significant credit risk as a result, so they grant that permission pretty carefully, similarly to how card processing merchant accounts require some level of trust.

[epolanski]

Your transactions aren't tied to some provider in New York blocking you over night?

[lxgr]

Which provider in New York are you referring to?

[gpvos]

Please elaborate.

[awongh]

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)

[kevin_thibedeau]

With autopay, you end up with two months of utilization stacked up. Even with a higher limit, you'll be penalized versus paying off completely like a charge card.

[gpvos]

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.

[Hikikomori]

We just don't have that much fraud instead.

[larkost]

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.

[Hikikomori]

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.

[orf]

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.

[Rexxar]

It's seem completely crazy to me to give your card to a waiter.

[lxgr]

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).

[rsynnott]

> 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.

... No. It's just not done in Europe because it is _not permitted_. Chip and pin was made mandatory decades ago, and for that the cardholder must be present. It's not unreasonable to be disconcerted when something which just doesn't happen in your experience (the waiter takes your card away!) happens.

Skimming is also mostly now a US thing, as non-US cards no longer require a magnetic stripe at all (the only US has a stay of execution; Mastercard plans to completely phase out magstripes by 2033, and I think Visa is similar).

The US has _far_ more card fraud than the EU (about $15bn vs $1.5bn/year), largely for technological reasons (the US doesn't require, and many issuers don't even support, chip and pin, or 3dsecure, and of course there's the magstripe thing, though most card fraud is online these days where 3dsecure is more relevant).

> Whereas in Europe the burden of evidence (not proof) is with the cardholder.

This is the case for chip and pin transactions. It would generally _not_ be the case for foreign non-chip-and-pin transactions, though cardholders may not necessarily be aware of this.