[iamwithnail]

I don't think tom is advocating for DD, in this instance. Particularly since direct debit isn't really suitable for POS transactions.

Credit cards are fundamentally a 1970s business model, based on tech that paid off their sunk costs decades ago, but the barriers to entry are so high they're impossible to overcome right now.

Given you can check balances and make payments in (near)real time, at least in Europe, there's no reason to continue to use Visa/MC, other than barriers to entry. You could check balance at POS over the internet and pay from your merchant account, recovering payment within an hour or so via faster payment. Frictionless credit isn't the same as unrestricted or unregulated credit - it's about removing the tether between one bank and one cRd - disintermediation of the bank. Why can't I have a credit card linked to zopa? Or someone else, or even, within an overall limit agreed by an umbrella provider, a number of different providers. That'd be cool, and would drive channel providers to compete on costs of service delivery (the 2-3% per transaction), as well as on cost of credit. Visa and MasterCard are an absolute racket, and one of my biggest grumps is that PayPal became just like them, if not more expensive.

[gsnedders]

You've missed another big advantage of credit cards in most places — they almost always come with more legal protection. If they're stolen, there are limits as to how much the card owner is liable.

[iamwithnail]

That wouldn't particularly change under the system that I'm proposing, idt. (on the back of a fag packet admittedly)- legal protection and the payments mechanism aren't intrinsically linked - most of the consumer protection with cc came long after the cards had been introduced. If you had an overall limit then the thief couldn't go over that, and a similar mechanism could/would exist - it'd probably be a product differentiation, in fact.

[seanflyon]

My understanding is that the protections that come with credit cards are a natural result of contract law. When you buy something with a credit card Visa pays for it and you agree to pay them back. When someone buys something with your stolen card Visa pays for it but you did not agree to pay them back, so there is no contract and no debt. Someone stole Visa's money, not yours.

[parasubvert]

How is direct debit not really suitable for POS transactions? It's been pretty much universal in Canada for over 20 years.

[iamwithnail]

Direct debit is the UK name for what I think are generally called Automated Bank Drafts (edit: automated clearing house/ach) in the US. (Apols if different in canada, not at all familiar with that jurisdiction.) fundamental problem with DD for POS is that if set up on the same day it's not pulled for a while, and can take up to a week to arrive - it's typically used for paying utilities and the like, regular bills sort of thing, or subscriptions (although that's changing now).

[parasubvert]

In Canada we have both the traditional direct debit (where you provide online or written authority to a company to deposit/withdraw directly), but also Interac Direct Payment, which I suppose is network similar to Maestro or Girocard, except all/most payments clear same-day, since it was an extension of the ATM network and PIN pads were installed across every merchant in the country.

I believe the vast majority of retail transactions in Canada use Interact Direct Payment (over physical cash or credit cards).

https://en.wikipedia.org/wiki/Interac

[iamwithnail]

Cheers, that's really interesting!