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.

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.

Debit cards usually also use the Mastercard or Visa payment networks.

Even though I and the supermarket I go to are both part of SEPA and I can issue a bank transfer that will clear ~instantly, today cashless payments still involve EMV for various reasons.

Debit cards are also mostly visa/mastercard.

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.

This tells me you are likely from North America?

Credit Card usage is really different between those regions. While I lived in EU, I rarely used credit cards (even paying online works with debit cards). But in Canada/US, I almost exclusively pay with credit cards now when shopping. Although in fairness it took me a few years to get in the habit of using credit cards and 'collecting points'.

it's about the payment processors, not the card type, though the article makes it confusing by mentioning credit cards as it's really not about that at all

https://www.ecb.europa.eu/euro/digital_euro/faqs/html/ecb.fa...

Read the FAQ, it's about no longer relying on US payment processors for handling transactions in a different country that may not support your country's payment system

I think ATM fees are unrelated to the card type.

My Danish bank imposed a fee on using an ATM from another bank, until my income was high enough to make me a "premium" customer, then these fees were removed. The card didn't change.

Using a credit card generally forces you to pay fees and higher interest.

I'd rather they didn't waste time worrying about ATM's. I have used one once in the last 5 years. Almost everywhere I visit regularly doesn't even take cash now. The problem being every requirement you add to something like this is probably years of development time given it's the government(s) involved.

It is indeed ridiculous. In the UK all bank cash machines are free no matter which bank you're from. My Girocard charges me 7€ for out of house withdrawals.

> My VISA card is not only a convenient payment method, it also forces ATM operators to give me cash without any extra fees.

And that has absolutely nothing to do with Visa, but everything to do with your local banks.

I'm in Germany and haven't paid ATM fees since years. I also pretty much never use ATM since Covid

Try buying something with your card that VISA or the US government doesn’t like.

As far as i know, your Visa provider pays for the bank ATM fee and they do this with the motivation that you pay with your Credit Card which then basically makes the merchents pay it through the credit card transaction fee which at the end you pay anyway.

I do use my credit card everywere and i'm sure ingdiba is also saving money due to not having offices/ATMs everywhere, but i wouldn't mind if something in the background changes and we can replace Visa/Mastercard with something from the EU.

Setting weird rewards/cash back things aside, which is the main incentive for folks to use it over debit card in most places:

It's not fully unnecessary step in-between when fraud is involved.

If someone hacks you/deceives you and somehow they got $5000 from your debit card, then your bank account is $5000 smaller. That can impact your ability to pay rent, or whatever you needed those $5000 for.

If it's via credit card, you have a decent amount of time to contest and resolve the issue.

the disputed amount should effectively be removed from your balance or offset by a temporary provisional credit until the investigation is completed

10ct vs % of the value. The consumer is paying for that.

But I guess it’s the same logic as the tipping point/ salary culture in the US.

Or the fact that sales tax is not always included in the price.

> The interchange fees are much much higher in the US, which is what pays for the rewards.

You're just raising the price for everyone for the sake of Visa & Mastercard's profit. Europe's cap makes a ton of sense.

Data shows they aren't that scared of debt, in fact some European countries have higher household debt than US, notably: Switzerland, Sweden and UK. It's pretty telling that Klarna is a Swedish company.

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

Your liability comment would mean though that the EU should use it and USA shouldn't.

EU has low fees for transfer, USA has high fees for transfer but apparently its easier for an US Citizen to dispute something.

At least as far as i'm aware, if i send money to someone else, its gone.

Whats that artifical cap?

Almost all EU credit cards are automatic debit at the end of the month, i.e. carrying over balance is not even possible. You will simply be over-drafted on the linked debit account and charged a fee + steep interest if you spend more then you have. Typically until the overdraft is resolved, no further debit card payments can be made.

The only reasons to use a CC in EU are:

- online payments where CC is the only accepted form of payment

- delay payments until after receiving wage

- hotels, car rentals, and other places that lock an amount on your card

- extra insurance provided by some more premium cards (VISA Gold etc)

Ever since 3-D Secure (2FA for CC transactions, beyond the CCV code), you have been liable for any transaction that was validated by it. Your bank may still do a chargeback as a courtesy, but that's not guaranteed.

> Europeans being so scared of debt is so funny.

I've never understood this mentality. It's like walking through a dangerous neighborhood knowing that you have excellent health insurance. If you get stabbed, you'll probably recover very well, but why take the risk?

I can understand going into debt to buy a house, but I can't understand going into debt to buy a can of tuna. Why take an unnecessary risk?

Credit cards serve the same purpose as loans: they allow you to make a purchase in advance of expected income. There’s a reasonable civic argument that this kind of loan should be tightly regulated to stop people from ruining themselves, but the basic economics work fine for millions of Americans who pay their credit cards on time (or otherwise consider a balance acceptable given their purchasing plans).

(I don’t think the fraud distinction you’re making is as stark in practice: in the US, you’re less exposed to fraud with credit since it’s the creditor’s money, not yours. Reversing a debit transaction in the US is somewhat more involved, albeit for not-good reasons concerning the US’s aging financial infrastructure.)

Paying with credit card gives you at least some leverage when a merchant doesn't hold their end of the deal. Good luck getting your money back with iDEAL (it's not possible right now).

I assume you never really interacted with the credit card world? E.g. most banks in Germany will give you a credit card that automatically deducts the outstanding debt at the end of the month, you can't really collect debt over time.

In addition I can deposit money on my credit card, so effectively I never have to be in debt if I don't want to. I just have to charge it up which is done in like 3 seconds in the banking app. It can even be automated.

Lastly credit cards with bonus programs definitely exist in Europe. Cashback variations are the most common ones, but all kinds of programs exist. E.g. Eurowings has one https://www.eurowings.com/de/ihre-vorteile/kreditkarten/uebe...

The way I understand it the Digital Euro doesn't compete with Wero. It's a way for the European Central Bank to emit money in digital form. In theory that doesn't require bank accounts, and can support offline transactions. It's a pretty different concept, more like a new form of money.

Wero, SEPA, and the digital euro are complementing each others

Large entities (companies right?) take that very serious. Its the other way around, small companies might not be aware of.

Nonetheless, i have seen in a very small company that we changed the behaviour of a camera which then only turned on when the action expected it and not before.

And in a very big company you alway have to fullfill it as a product standard.

I 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).

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.

We just don't have that much fraud instead.

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)

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

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.

And even when you have a credit card, it might act like a debit card (every payment shows as debit in your banking app, even if you really pay on the 10th of the month or something).

Slowly coming to a close in the US also.

Some places already of course not accepting Amex, some places not accepting Visa Infinites (CSR, Venture, etc).

The future of banking is direct. The days of free rewards at a loss are gone as premium US cards are nearing the $1,000 AF mark for luxury coupons.

I'm in Europe and I can't say this is the case at all. I've never heard anyone express such an idea.

Reminder to all commenters that Europe is not a single homogeneous country and somewhat diverse in various things, including payments and finance. Credit cards are definitely a thing in many European countries.