Europe though, yeah they’re killing it.
I'm German, so I'm basing my statement on almost 34 years of living here. In case you want some more details from an actual bank, read this [1].
Basically, we don't need credit cards, not even for renting cars, because we have robust regulation and our own national cashless payment schemes plus SEPA. Direct debit is just fine for us.
Yes, but not necessarily MasterCard/Visa debit cards. Germany's Girocard for example is a national debit card scheme that does not use any of the American grifters. Unfortunately, it's being phased out in favor of MC/Visa because the EU fee cap on national schemes is much lower than for MC/Visa and so banks can make more money off of you.
We're just standing by and watch our dependence on American grifter megacompanies larger every day.
I also see more people paying with their phone/smartwatch than any physical card these days.
I have never encountered even that. My debit card also works great for in-person payments in the US, with the only exception perhaps being rentals.
This is not true.
International payments are a huge huge goddamn mess and I do not envy anyone who has to deal with their peculiarities.
And even for those who have credit cards, they are "pay in full at the end of each month" cards, not American-style revolving credit cards. And stuff like the "cashback" cards of Americans, that's also not very common here since the "cashbacks" are actually paid for by the merchant on top of the interchange fee - but there's an EU law that places a hard cap of IIRC 1% on the merchant fees, so there is barely any way for banks to incentivise people to use credit cards.
And on the bank side, here in Europe we also don't really have that "debt holders can just sell off defaulted debts" thing, so banks can't offload the risk of defaults to someone else. And if that's not enough, we also got very strict laws on who can get approved for a credit card and for which limits - stuff like 20 year olds with 20, 30k of credit card debt are truly rare unless the parents of said young people are rich enough to back such a massive CC limit.
Strong disagree, being able to withdraw cash at corner stores or pay with cards directly beats having to guess how much cash you need to exchange beforehand. And a number German banks have offered free credit or debit cards for decades.
> And even for those who have credit cards, they are "pay in full at the end of each month" cards, not American-style revolving credit cards. And stuff like the "cashback" cards of Americans, that's also not very common here since the "cashbacks" are actually paid for by the merchant on top of the interchange fee - but there's an EU law that places a hard cap of IIRC 1% on the merchant fees, so there is barely any way for banks to incentivise people to use credit cards.
True but that doesn't affect their usefulness as payment methods - EU customers can largely pay with "credit" cards just fine.
o_O
That's because micropayments are still fucking annoying to do on both sides of any transaction:
- credit cards: cheap-ish at scale (2-5%), but users don't want to give random apps their CC details and integrating with Stripe/Paypal/whatever has the cost of UX flow break due to account details and 2FA compliance bullshit. In addition, every service paid-for by CC has the problem that only people with a CC can pay for it (so people in countries like Europe where "classic" bank accounts prevail are out of luck, and so are people in countries deemed too poor and/or fraud-affiliated are locked out entirely), and you gotta deal with tax and other regulatory compliance around handling payments as well. Oh and people will try to use your service to validate stolen payment credentials because a 1$ charge (especially for a well known service like Whatsapp) is most likely to be ignored by the accountholder even if fraudulent in nature, which in turn will lead to issues with chargebacks or, worst case, getting dropped entirely by the payment processor.
- in-app purchases: expensive (30% cut for the platform provider), serious headache to do when a significant chunk of the user base doesn't run phones with properly licensed Google Play Store (e.g. Huawei who aren't allowed to embed Play Store on their phones)
- bank transfer: possible, but restricted to the economic zones where there's enough customer base to justify the expenses of setting up a local company with a bank account (i.e. US, EU, India, possibly China), and transaction fees from the banks may end up being >>50% of the transaction's face value at such low amounts
- crxptxcurrency: even more of a hassle for customers to acquire, questionable legality / KYC issues, no realtime authorization due to mandatory waiting time for mining to confirm transactions
- pay by phone bill, premium numbers: possible, but need bureaucracy in each country, fraud / "my kid did it" complaints will run rampant, premium number calls are by default blocked in most if not all modern phone contracts ever since the early '00s and "dialer" fraud malware, difficult to associate with customer's phone number in the backend
In the end, if you truly want to capture a global audience with microtransaction payments, be prepared to deal with a loooooooooooooooooot of bullshit just to get started.
Long story short, we desperately need a global government effort to standardize payments at low fees. There's absolutely zero reason why banks and other intermediaries should be allowed to skim off more than 5% of any kind of transaction. ZERO.