European Payments Initiative (EPI)(epicompany.eu)
epicompany.eu
European Payments Initiative (EPI)
https://www.epicompany.eu/
123 comments
Yes it's indeed modeled after UPI it shows how forward thinking it was and great execution as well.
My qualms with it are its is association with mobile number as identity and lack of open-source apps both a limiting factor when it comes to preventing oligopolies or monopolies from influencing control over it.
My qualms with it are its is association with mobile number as identity and lack of open-source apps both a limiting factor when it comes to preventing oligopolies or monopolies from influencing control over it.
While UPI is completely online, EPI looks like it's working on a card based solution (which makes it a competitor to visa & mc)
In a sense it was created to limit the influence of duopoly card processors on Indian Internet payment systems and were successful in it; So UPI is indeed a competitor to VISA and MASTERCARD.
Rupay is from the same corp as UPI
Yeah, UPI is an absolute godsend. EPI looks heavily inspired by UPI. Somewhere I read even USA is looking into a similar system.
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> EPI will bring true value for both retail payments and payments between individuals “peer-to-peer”
How does something that is highly traceable bring 'value' and is preferred over plain cash?
How does something that is highly traceable bring 'value' and is preferred over plain cash?
There are plenty of situations where I would prefer this over cash if I trust the government to have my interests in mind (something true of some Europeans). Not carrying easily stolen cash, having it tracked so you can dispute things in court, just being more convenient the way NFC payments are. And the government gets to clamp down (or better, simply tax) on dark and grey markets.
But then I also want to have a stash of cash "just in case" and be able to buy substances and tools that might be illegal... So YMMV. I guess, ideologically, I prefer to lobby the government to make something legal, not to ensure there are loopholes so that I can get away with illegal stuff I want to do. But I understand that is not always possible.
But then I also want to have a stash of cash "just in case" and be able to buy substances and tools that might be illegal... So YMMV. I guess, ideologically, I prefer to lobby the government to make something legal, not to ensure there are loopholes so that I can get away with illegal stuff I want to do. But I understand that is not always possible.
In Denmark we have an app called mobilepay. Almost everyone trading peer to peer in e.x. Facebook marketplace and in local and in flea markets prefer using it over cash, especially when sending parcels, as you have something to go by if someone scams you.
Also pretty much no one has cash any more.
Also pretty much no one has cash any more.
In the Netherlands we can send each other payment request via iDeal, they are also instant and involve sharing a link (over chat or whatever) you tap it and pay with your own banking app. Very handy, but sadly only in the Netherlands, consequently it is the only thing I miss from my banking app (N26) and iDeal requires me to keep a Dutch bank around.
I'd say the main value over cash is that cash will stop existing soon. I tried to deposit cash at my bank in the Netherlands a few weeks ago and they refused to accept it, telling me I had to use a new inter-bank ATM system for deposits ("to make things easier for everybody"). I spent a week traveling to local towns trying to find an ATM that wasn't out of service, and which took deposits.
> ”I tried to deposit cash at my bank in the Netherlands a few weeks ago and they refused to accept it”
I’m surprised that it’s legal for a bank to refuse a cash deposit.
I’m surprised that it’s legal for a bank to refuse a cash deposit.
It's not that surprising - only a couple of the banks around where I work still have traditional counters, though the suburban braches do.
That sounds like a good reason to mandate that bank branches must accept cash.
>I'd say the main value over cash is that cash will stop existing soon
The road to hell is paved with good intentions.
The road to hell is paved with good intentions.
"How does something that is highly traceable bring 'value'"
Everyone claims they want untraceable money untill they get screwed over by a merchant or employer, then having traceability makes it much easier to go after the crooks.
I, for one, would rather not use anonymous untraceable crypto if i am about to pay for a house
Everyone claims they want untraceable money untill they get screwed over by a merchant or employer, then having traceability makes it much easier to go after the crooks.
I, for one, would rather not use anonymous untraceable crypto if i am about to pay for a house
I've only just heard of this, but it looks like it's an attempt by lots of big European banks to beat Mastercard & Visa at their own game!
It says they're building on EU Instant Payments, which has been standard for a while, and for supported banks (a good percentage now, and presumably all 30 banks listed here) means bank-to-bank euro transfers are free & take less than 10 seconds, 24/7. See https://www.ecb.europa.eu/paym/integration/retail/instant_pa....
Sounds like they're planning to produce card infrastructure on top of that, so with an EPI-supporting merchant and an EPI consumer card, a card transaction is implemented directly as an instant bank transfer, with no traditional credit card companies involved.
Oh and they're proposing to support p2p in the same way too. I guess that's more like competing with Revolut et al, since you can't really sign up to process Visa/Mastercard as an individual today anyway.
Does anybody know any more background on this? I have no idea about the seriousness of the proposal or anything at all, but it sounds like a big deal if they can pull that off.
It says they're building on EU Instant Payments, which has been standard for a while, and for supported banks (a good percentage now, and presumably all 30 banks listed here) means bank-to-bank euro transfers are free & take less than 10 seconds, 24/7. See https://www.ecb.europa.eu/paym/integration/retail/instant_pa....
Sounds like they're planning to produce card infrastructure on top of that, so with an EPI-supporting merchant and an EPI consumer card, a card transaction is implemented directly as an instant bank transfer, with no traditional credit card companies involved.
Oh and they're proposing to support p2p in the same way too. I guess that's more like competing with Revolut et al, since you can't really sign up to process Visa/Mastercard as an individual today anyway.
Does anybody know any more background on this? I have no idea about the seriousness of the proposal or anything at all, but it sounds like a big deal if they can pull that off.
What I’m curious about is, how does credit card fraud get handled in the EU?
At least in the US that kind of fraud is the bank’s problem, which is why I prefer using credit over debit.
At least in the US that kind of fraud is the bank’s problem, which is why I prefer using credit over debit.
It's reduced as a problem I think, and in general credit cards are certainly far less popular than in the US.
I suspect fraud is less of an issue because accepting signatures for card purchases hasn't been common for at least a decade (you need the PIN for all spending above the contactless limit - about 30 euros in most countries) and PSD2 (mandatory for transactions since 2020) requires 2FA authentication for most online transactions too. See https://en.wikipedia.org/wiki/Strong_customer_authentication.
That means copying or stealing a debit card, or capturing entered online card details by themselves won't get you very far in the EU, which removes a lot of classic fraud. In the remaining cases though, I have no idea!
I suspect fraud is less of an issue because accepting signatures for card purchases hasn't been common for at least a decade (you need the PIN for all spending above the contactless limit - about 30 euros in most countries) and PSD2 (mandatory for transactions since 2020) requires 2FA authentication for most online transactions too. See https://en.wikipedia.org/wiki/Strong_customer_authentication.
That means copying or stealing a debit card, or capturing entered online card details by themselves won't get you very far in the EU, which removes a lot of classic fraud. In the remaining cases though, I have no idea!
My impression was that because of the PIN used it was a lot riskier for the consumer with European cards: the credit card companies essentially said "the PIN was correct, so it could not have been fraud" so the default assumption was no fraud.
In the U.S. the system favors the consumer, so the merchant has to actively prove that it was not fraud (by default, this is definitely not blindly applied).
The signature part is one part of this, but the U.S. actually has laws in place to push this, and that largely has driven the non-PIN policy in the U.S. (since most of the anti-fraud pressure is on other parts of the system).
In the U.S. the system favors the consumer, so the merchant has to actively prove that it was not fraud (by default, this is definitely not blindly applied).
The signature part is one part of this, but the U.S. actually has laws in place to push this, and that largely has driven the non-PIN policy in the U.S. (since most of the anti-fraud pressure is on other parts of the system).
The customer still pays for fraud, one way or the other. So why not aim to prevent fraud in the first place by using a simple and effective second factor to mere possession of the card?
(1) Most people would rather pay the cost of fraud averaged across all accounts than suffer the risk of unlimited fraud against their own account.
(2) Putting the risk on credit card companies highly incentives them to fight fraud. This is ideal because they make the money and they are best positioned to fight it.
(3) Your premise is false to begin with. Higher fraud, like taxes, is payed for by some combination of the customers, the employees, and the owners (though actually it's more complicated than that due to contractual agreements: I believe merchants bear the penalty so we get recursive).
Even when the customer pays exclusively, there's a propagation delay that hits somebody else's wallet in the interim. (E.g., merchants don't raise prices immediately everytime fraud/taxes/wages increase.) It's a mistake to think of this as a mere transitory effect rather than a structural advantage that favors the consumer.
(2) Putting the risk on credit card companies highly incentives them to fight fraud. This is ideal because they make the money and they are best positioned to fight it.
(3) Your premise is false to begin with. Higher fraud, like taxes, is payed for by some combination of the customers, the employees, and the owners (though actually it's more complicated than that due to contractual agreements: I believe merchants bear the penalty so we get recursive).
Even when the customer pays exclusively, there's a propagation delay that hits somebody else's wallet in the interim. (E.g., merchants don't raise prices immediately everytime fraud/taxes/wages increase.) It's a mistake to think of this as a mere transitory effect rather than a structural advantage that favors the consumer.
PINs are safer, and less fraud is better. At the end of the day, shifting blame and liability is not going to change anything.
However, using security factors like secrets or updating the withdrawal limit is possibly inconvenient, that's why some people rather not use them and companies are incentivised to just recover the relatively minor losses to fraud in fees.
I guess it comes down to the fact that in some countries people are used to having about five different cards, and in others it's close to one.
((1) is both disingenuous (ignoring sensible withdrawal limits) and mathematically wrong (unlimited fraud spread evenly over all accounts is still unlimited fraud against every account). I guess people would pay more to avoid surprises, but they'd like it even more if there was less fraud.)
(3) The point was more that someone will have to pay for the fraud that is happening. Deriving a structural advantage from not using secrets is far fetched.
However, using security factors like secrets or updating the withdrawal limit is possibly inconvenient, that's why some people rather not use them and companies are incentivised to just recover the relatively minor losses to fraud in fees.
I guess it comes down to the fact that in some countries people are used to having about five different cards, and in others it's close to one.
((1) is both disingenuous (ignoring sensible withdrawal limits) and mathematically wrong (unlimited fraud spread evenly over all accounts is still unlimited fraud against every account). I guess people would pay more to avoid surprises, but they'd like it even more if there was less fraud.)
(3) The point was more that someone will have to pay for the fraud that is happening. Deriving a structural advantage from not using secrets is far fetched.
Are you arguing in favor or against PINs for in-store purchases? I interpret the first point as in-favor, but I suspect you meant it as against...
Yeah the PIN merely shifts the responsibility while adding a small additional protection. This model also adds a lot more friction online - you need to enter the pin again and it’s usually different from the offline pin. Overall, my parents’ generation simply can’t deal with all of this.
I think the solution is their requirement of 2FA for credit card payments[1]. Basically instead of this massive, expensive system to deal with fraud when it happens, and everyone paying banks to sometimes eat the cost of that, make it not happen in the first place. Not sure how successful it is, but it seems like the right idea.
[1] https://en.wikipedia.org/wiki/Strong_customer_authentication
[1] https://en.wikipedia.org/wiki/Strong_customer_authentication
For people like me "make it not happen in the first place" means online payments using credit card are no longer happening.
Credit card payments in Europe now have to have 2-factor authentication.
This makes fraud much harder, while still allowing online payments with credit cards.
It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
This makes fraud much harder, while still allowing online payments with credit cards.
It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
> Credit card payments in Europe now have to have 2-factor authentication.
> This makes fraud much harder, while still allowing online payments with credit cards.
As an European I can confirm,
> It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
Nope, sadly. Amazon apparently can magically skip the 2FA most/all times.
My guess is that amazon has deals with banks to streamline the process, but I don't really know
> This makes fraud much harder, while still allowing online payments with credit cards.
As an European I can confirm,
> It is probably also helping smaller shops, as even Amazon customers now need to do something when they buy there.
Nope, sadly. Amazon apparently can magically skip the 2FA most/all times.
My guess is that amazon has deals with banks to streamline the process, but I don't really know
Could you elaborate? Did SCA somehow drive you to stop accepting credit card payments? Are you using a payment provider that doesn't offer support for 2FA?
As a Canadian, the only time I've had a credit card stolen is in the US. Not saying credit card doesn't happen in Canada, it does, but it's definitely a much, much bigger problem in the US. Almost like the banking system isn't adopting measures such as chip cards to combat theft fast enough.
USA banking is usually a few years behind Canada, and 10 years behind Europe when it comes to adopting new technology.
In Europe the last time I saw a cheque was in the early 90's, and they are still used in Canada for things like rent.
I also remember traveling to the states in 2016 with my tap-enabled credit card, blowing people's minds in shops. All their equipment was ready for tap, but no US cards had it yet.
It also surprised me that things like Venmo have a reason to exist! I don't think many Americans know how bad they have it terms of banking tech.
In Europe the last time I saw a cheque was in the early 90's, and they are still used in Canada for things like rent.
I also remember traveling to the states in 2016 with my tap-enabled credit card, blowing people's minds in shops. All their equipment was ready for tap, but no US cards had it yet.
It also surprised me that things like Venmo have a reason to exist! I don't think many Americans know how bad they have it terms of banking tech.
In France I had to use a cheque for a weird tax reason (can't pay late with a credit card), and also when I bought a house, I had to refund the stuff to the seller by cheque during the signature ceremony.
>In Europe the last time I saw a cheque was in the early 90's, and they are still used in Canada for things like rent.
It's still a thing in France, mostly because you can control the moment it's cashed in, it can be used as collateral for rent and so on, and because there's a tradition of paper documentation cheques play into.
But people of my generation rarely bother to get a cheque book at all, bank transfers are just fine.
It's still a thing in France, mostly because you can control the moment it's cashed in, it can be used as collateral for rent and so on, and because there's a tradition of paper documentation cheques play into.
But people of my generation rarely bother to get a cheque book at all, bank transfers are just fine.
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I never cease to be amused by the wild exaggerations of foreigners.
How bad we have it. Comeon, just stop it.
So five years ago, you still had to enter a pin / swipe, you couldn't just tap. We've got it so bad. So bad! It's the dark ages here, circa five years ago.
> my tap-enabled credit card, blowing people's minds in shops
Yeah right. The iPhone had been around for nearly a decade, but oh wow tapping credit cards to blow minds.
> It also surprised me that things like Venmo have a reason to exist!
Crazy stuff! But like you said, we've got it so bad. An easy to use software service exists to transfer funds, incredible. The suffering. I feel dread just writing this comment and thinking about it.
How bad we have it. Comeon, just stop it.
So five years ago, you still had to enter a pin / swipe, you couldn't just tap. We've got it so bad. So bad! It's the dark ages here, circa five years ago.
> my tap-enabled credit card, blowing people's minds in shops
Yeah right. The iPhone had been around for nearly a decade, but oh wow tapping credit cards to blow minds.
> It also surprised me that things like Venmo have a reason to exist!
Crazy stuff! But like you said, we've got it so bad. An easy to use software service exists to transfer funds, incredible. The suffering. I feel dread just writing this comment and thinking about it.
I'm not saying it's the end of the world, you're just way behind. I lived in USA, Canada and several European countries so it's first-hand experience, not an exaggeration,
I just listed some examples, but the frustration was real. Individually all minor inconveniences, but when you are used to a better system it's frustrating.
Top 3 real frustrations are the difficulty of international wires, the frequency I have to visit a branch and how weirdly hard it was in SF to split bills (the last may have changed since 2018).
But sure, first world problems!
I just listed some examples, but the frustration was real. Individually all minor inconveniences, but when you are used to a better system it's frustrating.
Top 3 real frustrations are the difficulty of international wires, the frequency I have to visit a branch and how weirdly hard it was in SF to split bills (the last may have changed since 2018).
But sure, first world problems!
>I'm not saying it's the end of the world, you're just way behind. I lived in USA, Canada and several European countries so it's first-hand experience, not an exaggeration,
And yet you don't know that, as nraynaud and bayart said, the French use checks (about as often as Americans). Checks are definitely a thing in the UK, too. Are France and the UK no longer part of Europe? (If you make a Brexit joke here, as opposed to actually trying to respond to my point, you automatically lose.)
>Top 3 real frustrations are the difficulty of international wires
I will give you this. When I had to send $2000 to a Canadian earlier this year, the cheapest method we found was to do so through Coinbase using Bitcoin; I think the fee was about 1% (for me to purchase the additional Bitcoins I needed; no fee charged by Coinbase for the transfer itself because it was internal).
>the frequency I have to visit a branch
I've been a customer of USAA Bank for years. As it was created to serve the military (although its remit has expanded), USAA has always been designed to work without a local branch. There are many such branchless banks in the US. That said, I have accounts with other, "traditional" banks and they have been about as online as USAA is for years.
>and how weirdly hard it was in SF to split bills (the last may have changed since 2018).
This is one of the things people use Venmo for.
And yet you don't know that, as nraynaud and bayart said, the French use checks (about as often as Americans). Checks are definitely a thing in the UK, too. Are France and the UK no longer part of Europe? (If you make a Brexit joke here, as opposed to actually trying to respond to my point, you automatically lose.)
>Top 3 real frustrations are the difficulty of international wires
I will give you this. When I had to send $2000 to a Canadian earlier this year, the cheapest method we found was to do so through Coinbase using Bitcoin; I think the fee was about 1% (for me to purchase the additional Bitcoins I needed; no fee charged by Coinbase for the transfer itself because it was internal).
>the frequency I have to visit a branch
I've been a customer of USAA Bank for years. As it was created to serve the military (although its remit has expanded), USAA has always been designed to work without a local branch. There are many such branchless banks in the US. That said, I have accounts with other, "traditional" banks and they have been about as online as USAA is for years.
>and how weirdly hard it was in SF to split bills (the last may have changed since 2018).
This is one of the things people use Venmo for.
I think the Venmo comment may have been misunderstood.
The reason that Venmo is seen as an unusual, and somewhat superfluous concept, is that the functionality is just expected to exist as part of every financial app, either legacy/mainstream bank or trendy new fintech upstart - it's really not anything special enough to require a separate system.
The reason that Venmo is seen as an unusual, and somewhat superfluous concept, is that the functionality is just expected to exist as part of every financial app, either legacy/mainstream bank or trendy new fintech upstart - it's really not anything special enough to require a separate system.
US banks have their own version of Venmo called Zelle that is integrated into banking apps/websites.
My bank here in Denmark will either issue you a credit card specifically for a US vacation, or strongly recommend that you call to have your existing card invalidate on returning home.
We just don't use credit cards, in fact many countries have their own payments systems of varying popularity. The only time I need to reach for a credit card is when interacting with US companies.
IMHO credit cards and the systems around them are a remnant of the past. The US just hasn't caught up with the rest of the world yet.
IMHO credit cards and the systems around them are a remnant of the past. The US just hasn't caught up with the rest of the world yet.
> are a remnant of the past
weird. i'm european, live in europe, only use credit cards. either visa or amex. they offer better protection when buying something, protection against scammers, plus added benefits (from travel to cashback etc). it also contributes to my credit score.
if anything i think europe is actually craving a lot more credit, see klarna as a good example.
weird. i'm european, live in europe, only use credit cards. either visa or amex. they offer better protection when buying something, protection against scammers, plus added benefits (from travel to cashback etc). it also contributes to my credit score.
if anything i think europe is actually craving a lot more credit, see klarna as a good example.
My guess is that many countries in Europe (all 3 I have been in for significant time) have their own internal payment circuit. I two of those debit cards also worked on visa/mastercard, while in 1 (the netherlands) there was a much stronger separation (most stores only accepted the national circuit, bigger stores sometimes had a special register you might have to ask to use)
In Denmark we mostly use local debit card, which also duals as VISA debit card when going international.
But using a credit card like MasterCard or VISA in Denmark usually incurs a fee with most merchants.
As for protection, I think you still have months to report fraud. Although you should always report it as soon as discovered.
But using a credit card like MasterCard or VISA in Denmark usually incurs a fee with most merchants.
As for protection, I think you still have months to report fraud. Although you should always report it as soon as discovered.
Well It used to be something like 95% of EUR uses Debit Card ( Visa or Master Debit, it doesn't matter but Debit Card not Credit Card ). And 95% of US were Credit Card.
2008 changes a few things and somehow Debit Card in US caught on. Credit Card in EUR increased as well. I think Debit Card now represent something like 40%+ of transaction in US. Credit Card in EUR is still comparatively small, but much larger than pre 2010s mostly due to company spending.
2008 changes a few things and somehow Debit Card in US caught on. Credit Card in EUR increased as well. I think Debit Card now represent something like 40%+ of transaction in US. Credit Card in EUR is still comparatively small, but much larger than pre 2010s mostly due to company spending.
Carding is a non-issue in the EU, at least most places I'm aware of. Between PIN codes that are required everywhere and 2FA that's universal for direct payments on the Internet, there's just not much value there. Accounts with registered payment information are probably worth much more (Paypal).
Losing a card isn't very stressful here.
Losing a card isn't very stressful here.
credit cards are used minimally in Europe, cash and debit cars are the overwhelming majority of transactions.
There's no difference in fraud protection between debit and credit cards in Europe, at least on my bank. Fraud is refunded following the same rules.
There's no difference in fraud protection between debit and credit cards in Europe, at least on my bank. Fraud is refunded following the same rules.
Like others say, maybe fraud is less common, but personally I use a credit card 99% of the time.
Most banks will refund fraud in most cases even on a debit card here (UK)
Most banks will refund fraud in most cases even on a debit card here (UK)
What’s in it for the bank? How does it recover these costs? Do they charge monthly fee?
With chargebacks, the customer's bank will (attempt to) reclaim the money from the vendor's bank.
For credit cards the credit card issuer also shares legal liability with the vendor for purchases over £100.
https://www.ukfinance.org.uk/area-of-expertise/cards/chargeb...
For credit cards the credit card issuer also shares legal liability with the vendor for purchases over £100.
https://www.ukfinance.org.uk/area-of-expertise/cards/chargeb...
They usually charge a small monthly fee if you want a credit card. I assume successful fraud is just an operational cost like all the others.
In the UK credit cards (as with almost all bank accounts) are usually completely free if you pay the balance in full every month. New accounts frequently come with years of 0% interest on balance transfers. They are also required by law to be jointly and severally liable for the completion of your purchase contracts with the seller if between £100 and £40k.
In EU, in many cases you can go below zero in your checking account. So there's some buffer in case things go wrong.
We handle it by making online credit card payments super annoying (you have to login into our bank account and verify it with a second factor), so most people I know stopped using credit card payments.
I get a push notification and then use my finger scanner. That's it. Hardly annoying. I think this is a new protocol and all banks will soon migrate to this.
"I've only just heard of this, but it looks like it's an attempt by lots of big European banks to beat Mastercard & Visa at their own game!"
Not really. Europe has Vpay and Maestro/EC. Online payments can be done in some countries by "Sofort" https://www.klarna.com/pay-now/
They may just want to standardize it for all of Europe. In general, US banking often looks like stone age compared with Europe. Alo ne a money wire is annoying. IBAN payments are free. I think they charge a small fee for instant money wires.
Not really. Europe has Vpay and Maestro/EC. Online payments can be done in some countries by "Sofort" https://www.klarna.com/pay-now/
They may just want to standardize it for all of Europe. In general, US banking often looks like stone age compared with Europe. Alo ne a money wire is annoying. IBAN payments are free. I think they charge a small fee for instant money wires.
> Europe has Vpay and Maestro/EC
...owned by Visa and Mastercard?
...owned by Visa and Mastercard?
Don't forget iDeal! It's only used in The Netherlands, but unlike Sofort there is no intermediary company.
Basically, a merchant redirects you to your own bank's website. You have to log in, but all transaction details are already fixed. After confirmation, you're redirected back to the merchant and the transaction is complete.
Basically, a merchant redirects you to your own bank's website. You have to log in, but all transaction details are already fixed. After confirmation, you're redirected back to the merchant and the transaction is complete.
Fee for instant transfers is optional, my bank charges me 0€ during normal banking hours and 0,10€ outside banking hours.
Note that depending on country, Klarna and similar providers require you to pay them using a debit card. It specifically cannot be a credit card, because that would mean incurring new debt to cover existing debt.
I wonder what they'll do on weekends. Because Dutch banks for sure still have 'weekends'. I suspect it will be 24/5.
Most Dutch banks have instant payments in between them for a couple of years [1]. Iirc I recently transferred money from ING to ABN and it was instantaneous in the weekend.
[1] https://www.rtlnieuws.nl/tech/artikel/4843376/instant-paymen...
[1] https://www.rtlnieuws.nl/tech/artikel/4843376/instant-paymen...
One of the things I am aware of is the payout of the PIN-revenue to retailers, which are still not done in the weekends AFAIK.
The article mentions this, some Danish businesses switched away from PIN to direct payments, to get the funds immediately.
The article mentions this, some Danish businesses switched away from PIN to direct payments, to get the funds immediately.
UK banks also have weekends, but it's no big deal. Transaction are queued up and settled on Monday morning, but most systems know about them anyway; if your credit limit is 1000 and you pay 900 on a Saturday, your official balance is still 1000 but your available funds are shown as 100.
It’s 24/7/365 like other instant payment systems.
Why do they need a card infrastructure?
Since Brazil implemented our free instant interbank transfers (it's called PIX), people have been using it for all kinds of stuff that previously required a credit card. The seller simply asks the buyer to tag the transaction, and reads the tag on his phone when the buyer says the payment is complete.
Since Brazil implemented our free instant interbank transfers (it's called PIX), people have been using it for all kinds of stuff that previously required a credit card. The seller simply asks the buyer to tag the transaction, and reads the tag on his phone when the buyer says the payment is complete.
More than an card infrastructure it might be simply an infrastructure, now even between banks that support instant SEPA transfers it is not really usable to buy things with it.
Why not just use Vipps[1] for instance?
[1] https://en.wikipedia.org/wiki/Vipps
[1] https://en.wikipedia.org/wiki/Vipps
It's just a Norvegian thing. We have a similar app here in Belgium. I guess these banks just want a pan-European standard of p2p payment supplant national systems.
It makes sense to have single standard. Denmark and Finland use yet another called MobilePay. So there clearly is cottage industry of these by the banks themselves.
Eventually we should see some convergence and interoperability between these systems: https://empsa.org
But EPI solves a different issue.
But EPI solves a different issue.
And in Sweden there's Swish. The writing is on the wall, if it's not this initiative there'll be another I'm sure, sooner or later.
Italy has Satispay which has pretty good user penetration, at least among the younger crowd.
Satispay's killer feature is that it's aimed heavily at paying bar and restaurant checks, which is more common than sending money between acquaintances.
So if you share your location with your app, and the restaurant you're in is a Satispay merchant, it will show up automatically as a receiver without the need to scan codes or anything.
I'm sure other countries' payment apps have their own neat little features that others don't. Best case scenario would be for a common infrastructure to be adopted by all of them, and then they can interoperate and compete on feature sets, or even merge.
Satispay's killer feature is that it's aimed heavily at paying bar and restaurant checks, which is more common than sending money between acquaintances.
So if you share your location with your app, and the restaurant you're in is a Satispay merchant, it will show up automatically as a receiver without the need to scan codes or anything.
I'm sure other countries' payment apps have their own neat little features that others don't. Best case scenario would be for a common infrastructure to be adopted by all of them, and then they can interoperate and compete on feature sets, or even merge.
A European initiative intent on delivering a "pan-European payment solution", but out of 31 founding banks, 16 are Spanish, 7 French, and 3 German. Italy, Finland, Poland, Belgium, Netherlands each have a single participating bank, and no other country is represented.
Not sure what to make of that, but interesting nonetheless.
Not sure what to make of that, but interesting nonetheless.
Hard to draw conclusions without knowing the sizes of those banks. For example the 16 Spanish participating banks might be smaller or equivalent to the few French and German ones (likely true actually).
The bigger Spanish banks are surprisingly large. Going by Wikipedia[0], there's three Spanish banks in the top 20 largest in Europe, and only one German bank. And Santander is a chunk bigger than Deutsche at that. In fact, when measured by revenue, Santander is about as big as BNP.
Sizes aside, the fact that Spain got this many banks on board this project is in and of itself pretty noteworthy. The fact that there are so few participating countries is also pretty interesting.
0. https://en.wikipedia.org/wiki/List_of_banks_in_Europe#Larges...
Sizes aside, the fact that Spain got this many banks on board this project is in and of itself pretty noteworthy. The fact that there are so few participating countries is also pretty interesting.
0. https://en.wikipedia.org/wiki/List_of_banks_in_Europe#Larges...
Can only speak for Germany, but those 3 are certainly huge. Probably 2/3 of all bank accounts in Germany.
This is getting some negative attention and, on second look, it reads a bit like I'm suggesting there's something nefarious or conspiratorial about this without actually saying it directly.
I'm not. It's an interesting project, and I'm genuinely curious as to how they ended up with that roster of initial member banks (if nothing else, because it sort of informs my expectation of this plan succeeding)
I'm not. It's an interesting project, and I'm genuinely curious as to how they ended up with that roster of initial member banks (if nothing else, because it sort of informs my expectation of this plan succeeding)
Note that "nets" is on the list.
They represent 250 banks across Europe (according to their web-page): https://www.nets.eu/who-we-are
For example, Danske Bank (the biggest Danish bank) uses them.
They represent 250 banks across Europe (according to their web-page): https://www.nets.eu/who-we-are
For example, Danske Bank (the biggest Danish bank) uses them.
Nets doesn't "represent" banks, they provide them with services. In this particular case, they're there representing themselves. If you're going to build a competitor to Visa/MasterCard, you need banks on board, but also somebody specialised in rolling out the infrastructure.
Nets is owned by Mastercard.
The two main banks in Finland are OP (the one included here), and Nordea which is a shitty bank anyway so who cares. Others are very small banks, like savings only.
I don't know about America, but when comparing payment infrastructure in Europe vs. Asia, I'm always amazed at how bad the EU is.
Hoping that this will work but I highly doubt it - most European banks were created a very long time ago and like all legacy systems it's really hard to change their habit.
Even if I'm using this "immediate payment system", I'm pretty sure my local bank will still delay my payment by a few days "because they are used to do it that way".
Hoping that this will work but I highly doubt it - most European banks were created a very long time ago and like all legacy systems it's really hard to change their habit.
Even if I'm using this "immediate payment system", I'm pretty sure my local bank will still delay my payment by a few days "because they are used to do it that way".
I moved from Finland to UK to USA, so I have personal experience with three rather different banking ecosystems.
The payment systems in America are literally 30+ years behind Finland and UK. It's absurdly bad. People still send paper checks. There's no national infrastructure for bank transfers. You shouldn't give out your bank account number to anyone (unlike EU/UK where it's perfectly safe to post account numbers). Direct debit seems crazy unregulated.
Credit cards and bank-specific transfer systems are used to patch the most glaring holes in this mess, which I'm sure pleases Visa/Mastercard and the banks themselves, but leaves everyone else worse off.
The payment systems in America are literally 30+ years behind Finland and UK. It's absurdly bad. People still send paper checks. There's no national infrastructure for bank transfers. You shouldn't give out your bank account number to anyone (unlike EU/UK where it's perfectly safe to post account numbers). Direct debit seems crazy unregulated.
Credit cards and bank-specific transfer systems are used to patch the most glaring holes in this mess, which I'm sure pleases Visa/Mastercard and the banks themselves, but leaves everyone else worse off.
The US Federal Reserve is implementing Instant Payments in 2023 [1]. The system is already in beta testing [2], and its development is ahead of schedule [3], going live a full year earlier than first projected. Fintech sees the writing on the wall with Paypal moving into crypto and brokerage services, and Visa attempting to acquire Plaid to move away from payments. Payment revenue is going to (rightfully so) plummet as the Fed fixes antiquated plumbing and drags the US into the 21st century (54 other countries already have instant payment systems [4]).
One would expect banks and the Fed to eventually adopt similar infra that Europe is (per this submission), where card infra can use these Instant Payment ("FedNow") rails for C2C, C2B, and B2B payments (although, eventually, everyone will move to QR codes a la China; Zelle is beta testing QR code support for instant payments on their network [5]).
US payments currently suck, but I wanted to share that progress is being.
[1] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
[2] https://www.pymnts.com/news/faster-payments/2021/five-banks-...
[3] https://www.frbservices.org/financial-services/fednow/blog/u...
[4] https://www.frbservices.org/financial-services/fednow/instan...
[5] https://www.zellepay.com/support/how-do-i-use-zelle-qr-code
One would expect banks and the Fed to eventually adopt similar infra that Europe is (per this submission), where card infra can use these Instant Payment ("FedNow") rails for C2C, C2B, and B2B payments (although, eventually, everyone will move to QR codes a la China; Zelle is beta testing QR code support for instant payments on their network [5]).
US payments currently suck, but I wanted to share that progress is being.
[1] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
[2] https://www.pymnts.com/news/faster-payments/2021/five-banks-...
[3] https://www.frbservices.org/financial-services/fednow/blog/u...
[4] https://www.frbservices.org/financial-services/fednow/instan...
[5] https://www.zellepay.com/support/how-do-i-use-zelle-qr-code
This is a good update, than you for the resources.
One only point to add to your last one: Revolut, already very popular in Europe, is also present in USA now. QR codes are already supported, as well as instant phone to phone payments with either phone number, name alias (uniqueID).
But that's only within Revolut, which is a very small fintech compared to the aggregate of commercial US banks. Why would I use Revolut when I can use a US bank that supports Zelle today, or any US bank that will support Instant Payments in 18 months?
Also, Wise today supports cross border P2P payments and are a more reputable firm than Revolut. I would recommend Wise over Revolut if someone was looking for such a feature.
Also, Wise today supports cross border P2P payments and are a more reputable firm than Revolut. I would recommend Wise over Revolut if someone was looking for such a feature.
What are the problems you had in the US?
From my perspective none of the things you list are really problems in my life.
* I don’t even own checks and if I get one I take a photo from my banking app and have it deposited.
* I only use my debit card for the very rare times I withdraw cash and instead just use a credit card that auto-pays from my bank directly each month in full.
* If I want to transfer money between friends I just use Venmo.
* I’ve never had fraud issues but my sister had her card skimmed in Europe and calling to report was enough to reverse the charges.
From my perspective none of the things you list are really problems in my life.
* I don’t even own checks and if I get one I take a photo from my banking app and have it deposited.
* I only use my debit card for the very rare times I withdraw cash and instead just use a credit card that auto-pays from my bank directly each month in full.
* If I want to transfer money between friends I just use Venmo.
* I’ve never had fraud issues but my sister had her card skimmed in Europe and calling to report was enough to reverse the charges.
Well, for an anecdote, the process of renting an apartment was considerably easier in UK when it came time to send in payments.
In London, once I'd signed a lease, the rental agency simply gave me account numbers for the deposit and other fees. I sent the payments to UK from my Finnish bank account at no extra cost (bank transfers within the EU/UK payment area are free).
In New York, once I'd signed a lease, the rental agency told me I need to bring them seven cashier's checks by Monday for the deposit and various fees going to different destinations (condo management corporation, etc.) At this time I was in London, so shuffling physical pieces of paper from a bank into an office in NYC wasn't going to happen! Kindly the agency agreed to allow me to wire them the total sum, and they would "cut" the checks for a mere $15 / check. For seven checks, that was an extra $105 fee — for nothing really except to work around a system still built on 19th century assumptions of money. (I also had to pay fees to send the wire transfer, because Americans somehow believe that bank transfers cost tens of dollars to process.)
Additional patchwork layers like Venmo don't solve these issues. Sending thousands of dollars to a landlord or management corporation isn't the same as sending $50 to a friend for dinner.
In London, once I'd signed a lease, the rental agency simply gave me account numbers for the deposit and other fees. I sent the payments to UK from my Finnish bank account at no extra cost (bank transfers within the EU/UK payment area are free).
In New York, once I'd signed a lease, the rental agency told me I need to bring them seven cashier's checks by Monday for the deposit and various fees going to different destinations (condo management corporation, etc.) At this time I was in London, so shuffling physical pieces of paper from a bank into an office in NYC wasn't going to happen! Kindly the agency agreed to allow me to wire them the total sum, and they would "cut" the checks for a mere $15 / check. For seven checks, that was an extra $105 fee — for nothing really except to work around a system still built on 19th century assumptions of money. (I also had to pay fees to send the wire transfer, because Americans somehow believe that bank transfers cost tens of dollars to process.)
Additional patchwork layers like Venmo don't solve these issues. Sending thousands of dollars to a landlord or management corporation isn't the same as sending $50 to a friend for dinner.
I had to pay a bill by typing numbers into an online bank along with an address that the physical check would then be mailed to.
I thought the banker who told me they would send a check was joking. Or just using it as an metaphor for making a payment to the account. But no, at one point the check actually got lost and and then reappeared later so my balance with PG&E went positive.
Oh, and it could only pay fixed amount at regular intervals.
I eventually learned that most vendors would accept check numbers, and then magically withdraw from my account. So long as a checked a box that effectively allowed them to withdraw whatever they deemed I owed them.
In Denmark I get an electronic statement of all the bills I have signed up for automatic payment. It just works.
Oh, not to mention: to rent an apartment in the US I had to get a cashier's check. I'll admit I didn't even know that was a thing...
(In Denmark banks don't accept checks anymore)
I thought the banker who told me they would send a check was joking. Or just using it as an metaphor for making a payment to the account. But no, at one point the check actually got lost and and then reappeared later so my balance with PG&E went positive.
Oh, and it could only pay fixed amount at regular intervals.
I eventually learned that most vendors would accept check numbers, and then magically withdraw from my account. So long as a checked a box that effectively allowed them to withdraw whatever they deemed I owed them.
In Denmark I get an electronic statement of all the bills I have signed up for automatic payment. It just works.
Oh, not to mention: to rent an apartment in the US I had to get a cashier's check. I'll admit I didn't even know that was a thing...
(In Denmark banks don't accept checks anymore)
I’m sorry that happened but that sounds like a problem with PG&E rather than a banking problem, surely they can accept other forms of payment —- For example, I just pay my utility bills on auto pay from a credit card each month.
For renting I directly had monthly deposits drawn from my bank account after providing a routing/account number to the landlord. I lived in four different apartments and all of them just directly withdrew from my bank account automatically each month. Even for an initial deposit it was directly transferred from the bank or put of a credit card.
For renting I directly had monthly deposits drawn from my bank account after providing a routing/account number to the landlord. I lived in four different apartments and all of them just directly withdrew from my bank account automatically each month. Even for an initial deposit it was directly transferred from the bank or put of a credit card.
I've lived in the US and UK and generally agree with you. But one thing that got me is that it seems fairly easy to defraud the system in the UK with everyone so freely giving out their bank account numbers.
What actually protects the bank account numbers in the UK/EU? Why do people seem totally unconcerned with giving out this information there?
What actually protects the bank account numbers in the UK/EU? Why do people seem totally unconcerned with giving out this information there?
What bad can you do with someone's IBAN account number? Nothing, unless a bank is somehow totally incompetent.
It's basically the same as an email address. You can't read someone's email inbox just by knowing their address. Similarly, you can't send money out of a bank account just by knowing the number. (You could spam them with money, but most people wouldn't mind.)
It's basically the same as an email address. You can't read someone's email inbox just by knowing their address. Similarly, you can't send money out of a bank account just by knowing the number. (You could spam them with money, but most people wouldn't mind.)
> Similarly, you can't send money out of a bank account just by knowing the number.
You might if you walk into a branch with a little fake ID and a smile. Or you get a forced "vacation" in jail :)
But yeah, it's not naturally assumed that you can just do something with those numbers.
You might if you walk into a branch with a little fake ID and a smile. Or you get a forced "vacation" in jail :)
But yeah, it's not naturally assumed that you can just do something with those numbers.
Banks by EU law have to comply
with SEPA / instant payments. Payments in Europe is very good compared to US and in most cases also better than Asia. After all, Europe invented open banking and PSD2.
Asia is very fragmented. Countries like China, HK and Singapore are very good on instant payments, in particular because card payments have very high MDR and fees. Other countries like Indonesia and Philippines are just now starting to implement fast payments and national clearing infrastructure. And, unlike Europe, cross-border payments are still highly fragmented and expensive.
MDR = Merchant Discount Rate (I assume), https://en.wikipedia.org/wiki/Merchant_account#Discount_rate...
Yes the fees the merchant pays to the acquiring and issuing bank for processing the card payment.
> I don't know about America, but when comparing payment infrastructure in Europe vs. Asia, I'm always amazed at how bad the EU is.
Europe, Asia, EU... why make such meaningless generalizations?
Have you ever done banking in Japan?
> Even if I'm using this "immediate payment system", I'm pretty sure my local bank will still delay my payment by a few days "because they are used to do it that way".
You realize there are EU directives behind the standards implemented by banks? SCT Inst has to be operated 24/7, and transfers available at the receiving end within 10 seconds.
Europe, Asia, EU... why make such meaningless generalizations?
Have you ever done banking in Japan?
> Even if I'm using this "immediate payment system", I'm pretty sure my local bank will still delay my payment by a few days "because they are used to do it that way".
You realize there are EU directives behind the standards implemented by banks? SCT Inst has to be operated 24/7, and transfers available at the receiving end within 10 seconds.
Where in Asia? I've heard bad things about transfers in Japan, for instance: https://www.youtube.com/watch?v=BbS6JrBcQ4M
In the UK transfers are free and near-instant, and contactless is ubiquitous.
In the UK transfers are free and near-instant, and contactless is ubiquitous.
Can you provide examples of what you had in Asia that you are missing in Europe? And which countries.
well it seems SEPA didnt take too long to implement, and frankly most banks have gotten used to frequent changes in EU banks regulation so, if this is real, it might not take too long
Will this be based on ISO 20022? If all EU member state national clearing and settlement switches speak this format, it should be fairly easy to integrate across countries as well. Singapore and Thailand have recently introduced a similar 24/7 bridge between their national clearing / settlement systems (PayNow to PromptPay) and it works really well. You can basically send money to any Thai / Singaporean phone number in real time.
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Banks need to do something to fend off the likes of Paypal, Square and Adyen who seem to be eating their lunch...
Banks are getting the interchange doing very little work compared to the payment processor. Some banks are operating their own processor, but I really doubt the typical bank is interested in that.
EPI is all about doing away with Visa and Mastercard, while providing interoperability across Europe, "simply" leveraging infrastructure that already exists.
EPI is all about doing away with Visa and Mastercard, while providing interoperability across Europe, "simply" leveraging infrastructure that already exists.
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I wonder if some of the motivation behind this is political (e.g. to avoid becoming dependent on US based payments infrastructure that can block transactions to certain countries in order to comply with US sanctions even when EU countries don't agree)?
EU being dependent on duopoly of American companies for online payments has been bothering me more and more in recent years. Good to see something happening in the subject.
In Poland, there's BLIK which is a pretty cool thing: a system developed by all major Polish banks, you only need an Android/iOS app of your bank, which generates a 6-digit token valid for 120s, then you use it on payment processor website, or to withdraw money at most ATMs in Poland. Then you get an in-app push notif to confirm the transaction fee and recipient.
Are there any similar solutions anywhere where you can withdraw money without physical debit/credit card? (I'm surprised BTW I never saw an ATM compliant with Google Pay/Apple Pay, they all want plastic)
In Poland, there's BLIK which is a pretty cool thing: a system developed by all major Polish banks, you only need an Android/iOS app of your bank, which generates a 6-digit token valid for 120s, then you use it on payment processor website, or to withdraw money at most ATMs in Poland. Then you get an in-app push notif to confirm the transaction fee and recipient.
Are there any similar solutions anywhere where you can withdraw money without physical debit/credit card? (I'm surprised BTW I never saw an ATM compliant with Google Pay/Apple Pay, they all want plastic)
What I've seen so far and what I've heared from Turks in Europe is that European banks are like 10 years behind Turkish banks in terms of services. In Turkey you can send money to another bank account instantly even on weekend nights, open USD, EUR, gold etc accounts anytime, opend lots of different types of accounts, send money easly by providing receiving end's phone number, citizenship number, email, IBAN, Swift etc, open virtual credit card that you can refill and empty at any time, apply credit card, pay bills automatically, lits of stock buying options, login to your egovernment account using your bank account, notifications when you receive money, apply for credit card online, you can cash out from ATM without clicking buttons but scanning barcode from your bank app, when you call your bank they use 2FA using your voice, from online account you can change your repayment options for the credit cart like repay in 3 months (hire-purchase?) this spending, lots of 2FA options like SMS or app code or flash mobile message, Troy credit card, if you keep your mobile phone number same but change your SIM card even if you don't change your mobile operator your online account is paused and you need to call them and reidentify yourself to login again, you cannot obtain lots of credit from different banks becouse every bank can see your debts, you can pay insurance online, there some kind of special bank operations when you buy or sell car, and many more that I didn't bother checking. Did I mention APIs for individual users?
Hmmm. Based in Brussels.
Why do I have to think of Nostradamus and The Mark of the Beast now? ;->
Besides that, I don't really understand what it improves?
I have that already. Be it via browser from desktop, via phone(Landline!(by talking to a human!)), or some crappy app on some f---ing gadget:
SEPA number, amount of money, some text, optional time and date(for not being instant), bzzzzt, there!
(Since about 2 years?)
Why do I have to think of Nostradamus and The Mark of the Beast now? ;->
Besides that, I don't really understand what it improves?
I have that already. Be it via browser from desktop, via phone(Landline!(by talking to a human!)), or some crappy app on some f---ing gadget:
SEPA number, amount of money, some text, optional time and date(for not being instant), bzzzzt, there!
(Since about 2 years?)
Revolut is already working in the real time payment space for consumers and B2B, cross-country and cross-currency (mobile for consumers and B2B APIs for businesses) and it's active in EU, USA and Asia (SG, JP, AU) and expanding its footprint.
UPI has been a great convenience for people since its introduction and it has a very good penetration.
https://www.npci.org.in/what-we-do/upi/product-overview