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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 do

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.

mothballed 3mo ago
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 3mo ago
  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 3mo ago
    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 3mo ago
      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 3mo ago
  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.
- krzyk 3mo ago
  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.
- poisonborz 3mo ago
  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.
- wongarsu 3mo ago
  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
- izacus 3mo ago
  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 3mo ago
    These insurances are the greatest sales trick of all time: Banks selling you something they're legally required to provide for free already.
- polytely 3mo ago
  can you give an example of being defrauded? I don't really know what people mean when they say that.
- Muromec 3mo ago
  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 3mo ago
    > 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.
amarcheschi 3mo ago
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 3mo ago
  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 3mo ago
    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 3mo ago
  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 3mo ago
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.
- padjo 3mo ago
  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 3mo ago
    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%.
    - padjo 3mo ago
      Honestly shocked its as high as 40%. I assume that's by value not transaction count.
    - rsynnott 3mo ago
      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.
- rsynnott 3mo ago
  > 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).
l23k4 3mo ago
Most people in the EU use debit cards, they additionally use direct debit specifically for utilities, gym memberships, etc.
lxgr 3mo ago
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 3mo ago
  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 3mo ago
    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 3mo ago
      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 3mo ago
    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).
- 3mo ago
illiac786 3mo ago
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.
- freediddy 3mo ago
  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.
  - l23k4 3mo ago
    They might be talking about a girocard https://en.wikipedia.org/wiki/Girocard https://en.wikipedia.org/wiki/Girocard
  - illiac786 3mo ago
    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.
  - rsynnott 3mo ago
    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.
- verzali 3mo ago
  That is not correct. You may be thinking of a prepaid card or something like vpay. Debit cards are accepted practically everywhere.

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.

mothballed 3mo ago

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 3mo ago
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 3mo ago
  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 3mo ago
    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 3mo ago
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.
krzyk 3mo ago
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.
poisonborz 3mo ago
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.
wongarsu 3mo ago
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
izacus 3mo ago
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 3mo ago
  These insurances are the greatest sales trick of all time: Banks selling you something they're legally required to provide for free already.
polytely 3mo ago
can you give an example of being defrauded? I don't really know what people mean when they say that.
Muromec 3mo ago
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 3mo ago
  > 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.

amarcheschi 3mo ago

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 3mo ago
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 3mo ago
  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 3mo ago
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 3mo ago

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.

padjo 3mo ago
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 3mo ago
  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%.
  - padjo 3mo ago
    Honestly shocked its as high as 40%. I assume that's by value not transaction count.
  - rsynnott 3mo ago
    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.
rsynnott 3mo ago
> 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).

l23k4 3mo ago

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

lxgr 3mo ago

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 3mo ago
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 3mo ago
  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 3mo ago
    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 3mo ago
  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).
3mo ago

illiac786 3mo ago

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.

freediddy 3mo ago
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.
- l23k4 3mo ago
  They might be talking about a girocard https://en.wikipedia.org/wiki/Girocard https://en.wikipedia.org/wiki/Girocard
- illiac786 3mo ago
  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.
- rsynnott 3mo ago
  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.
verzali 3mo ago
That is not correct. You may be thinking of a prepaid card or something like vpay. Debit cards are accepted practically everywhere.