Not only germans use the german system. When other Europeans go to European institutions that are placed in Germany, we can't use electronic payments. A system established 34 years ago should not be an acceptable excuse for a subpar service.
It is a shame (and quite fraud-risky!) to go on a taxi and have to wait 5-10 minutes for the taxi driver to carbon copy your credit card details in the invoice (now he only needs to memorize 3-4 digits for the security number), whilst in the same country Uber, and other similar services that provide immediate payment facilities with no open handling of sensitive data, have been banned.
The system was developed in those 34 years, both on user visible features (EMV card with chip&pin in 2004) and invisible (SEPA Cards Clearing, implemented in 2015). The latter allows any SEPA based participant (and those outside, apparently there's some interest in Brazil) to handle clearing of transactions compatibly. That should allow card based SEPA Credit/Debit Transfers (which draws from 34 years old ELV a lot).
Merging incompatible banking systems takes time, but IMHO that's better than just layering another rent seeker or two (the credit card company, plus potentially Stripe) on top.
Offtopic, but:
> whilst in the same country Uber has been banned
Maybe they should have read up on the local regulations instead of spouting their usual nonsense about fighting the taxi cartel? (nevermind that the biggest player in that space is Uber itself)
A cursory reading of the relevant laws got me three different ways to try to establish a legal setup in which they could have proved their contribution to the public transport system for a couple of years (after which that could be extended or be made part of the official playbook). But it sometimes looks like reading laws is a fireable offense at Uber.
I've also noticed that not many people pay contactless, even when the terminals support it... and the cashiers tend to assume that the card is not contactless for some reason.
The merchant fees are part of the total cost, so lower fees provide a competitive edge to the merchant. (the listed price also contains VAT, so you pay what's on the sticker, not like in the US)
Aldi (a discount grocery chain) didn't accept _any_ cards for a long time to avoid these extra costs.
In short: the German market situation is rigged in favor of cash, which is "free", which is hard to compete with when you're selling credit card services for a living.
But in general, even if technically possible, not a lot of businesses accept visa or mastercard - be it that the bank does not provide the service, or that they charge extra, it is not available.
Luckily PSD2 will soon open the space to more players.
So we can use our debit cards for buying tickets for trains, concerts, cinema, money transfer, paying Internet shops, charging pre-pay phones,...
All without paying ATM taxes, regardless of the bank of origin.
So the majority of people, if they aren't traveling abroad or buying Internet stuff on foreign shops, don't have any need for credit cards.
As much as I like cards, I also prefer paying for stuff with cash.
In Portugal it is illegal to buy an expensive computer, or high-end computer monitor, or a high-end TV with cash. Similar thing in France.
Imagine yourself throwing a dinner party in a restaurant with 10 guests and they eat and drink so much that it comes to a point where it's illegal to pay that dinner with cash. Ridiculous.
It is clearly a measure created to prevent tax evasion, which in Portugal is a real issue (as in most Southern Europe countries, I'm Italian) http://www.theportugalnews.com/news/may-2016-portugal-named-....
Since, as your parent says, in Portugal cashless systems are convenient are efficient, I don't really see the issue, aside from your personal preference.
It is clearly a measure created to prevent tax evasion, """
this shows the extent to which the banking system has brainwashed us, when 2 people cant conduct a large transaction directly without an intermediary and it seeming 'suspicious'
If you lived in a country where every other week you see in the news some politician caught on camera while pocketing corruption money, you probably would have another viewpoint.
You'd think.
I bought a house in Japan and I had to pay my deposit in cash, approximately US$10,000. Walking around with that much money, I've never been more paranoid in my life.
http://www.kalzumeus.com/2014/11/07/doing-business-in-japan/
A few questions:
1. Are you sure it’s illegal?
2. From what value does that apply?
3. How is that enforced?
4. More importantly, who is in trouble if they do so, the buyer or the seller?
https://www.dn.pt/dinheiro/interior/pagamentos-em-dinheiro-v...
* The article is from August 22nd 2017.
* It prohibits cash payments for anything (not just electronics) from 3000€ on.
* For non-residents, the limit is expanded to 10000€, or equivalent in a different currency.All the benefits from credit cards really come from the fact that you're paying with credit: - Travel a lot? They sure accept Visa. - Want to pay some street vendor? Square is only possible because they don't need to dial your bank directly.
Also the fee per transaction might be cheaper on debit cards, but the cost to acquire a debit card reader from your bank is still high. That's why virtually all larger vendors do accept debit cards in Germany, only smaller businesses are cash only (from my perspective).
The real advantages of credit are spending money you don't have, and points/cashback.
On some banks there are bank accounts with automatic credit, up to a certain limit of expenses.
My friend owns a retail business, and acquired a debit card reader for it. I was surprised at how cheap it was (ISTR 50€ -- certainly below 100€). He's quite happy with the bank's tech support, too.
I like having the option to to buy now and pay later at the same price point as paying right now.
Since bank transfers are immediate now (unlike in the past when monthly batching was cost effective) and most credit cards in Germany are managed by the banks and coupled to bank accounts, they could just reconcile all transactions immediately (and even reject those that overdraw too much).
In such a situation, credit would become a risk adjusted premium feature and you'd have to calculate if it's worth it (vs the bank's regular interest rate on overdraw).
Plus, according to the OECD Germans have somewhat higher household savings (relative to household income) than Americans, so the liquidity might be comparable without using credit.
If I have expenses of 100K a year, without access to credit I have to make 100K a year without fail, or I am insolvent. With credit, I can make 100K one year, 0 the next and 200K (+ whatever interest I need to pay for Year 2) in the final year. The optionality is more than worth whatever interest and surcharges I encountered by using credit in Year 2.
Lest you think this is insane, this is how I bootstrapped my last business.
And yes, it's probably a privacy nightmare, I agree. But at least you can make this choice in here.
That's because we had our own system established in 1984 (ELV, electronic direct debit based on the EC cards mentioned elsewhere). From a German point of view, a credit card is a downgrade.
- The system covered all German banks (private banks, public banks = Sparkassen, credit unions) because they got their act together and set up a single standard.
- It had lower fees than credit card transactions.
- Pretty soon the card was included with bank account fees, while credit cards cost extra.
- It worked with a magnet stripe and automated electronic clearing in a time when credit cards were merely a slight convenience over manually writing a check which needed to be mailed around the country (you do know why credit cards have name + card number embossed to this day, right? Check out credit part imprinters).
All that made it more attractive to merchants, and credit card companies weren't used to competing in a market that already had a big incumbent.