In Argentina we have Mercado Pago which is basically this.

It is not the same. Mercado Pago is a product from Mercado Livre and charges at least 0.8% per transaction.

Transfers from a bank to another and between banks and/or digital wallets (like MercadoPago) are free and almost 99% of time instant in Argentina

The transfer system is like that due to government regulation

If you transfer between accounts is free.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank

It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share.

I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.

About half of the world population has access to some sort of QR based payment system nowadays.

India has UPI, China has Ali and Wechat pay. Almost everyone in these two countries can go weeks without having to use cash.

In South East Asia, Vietnam is leading QR payments. I live in Ha Noi, and I only carry VND equivalent of $15-20 with me, and it sits in the wallet for ages. Everything from gas stations to restaurants to street vendors to even paying taxes, you do it from a QR code. There is no wallet, the money is directly debited from the account.

Thailand, Singapore, and Indonesia have similar systems. In Indonesia, a couple of "super apps" had their own wallets, but merged with QRIS a few years back, a lot of Indonesian people can now pay with QR codes, even across wallets and bank accounts.

South America and Asia has already started to replace card payments with the QR payments. Rightfully so.

Europe (41 countries) has instant SEPA.

SEPA is a banking infrastructure layer and it is not consumer focused. Also, only ~60% of European banks adopted it. While Pix was mandatory for all banks to adopt and 80% of Brazilian population already used it.

In Spain we have Bizum. You can send money to any phone number. It's instand and, as I understand, it works on top of SEPA.

Never understood why it’s tied to a phone number. I don’t like to leak mine just for silly payments.

Pix resolved this by allowing email, phone number, tax ID or random generated key as an identifier.

All banks in Euro (currency) countries have adopted SEPA. You might be thinking of SEPA Instant Payments, which is more recent and adotopion isn't universal yet.

I believe the Singapore, Malaysia and Thailand ones are linked too, I noticed last time I went over to Malaysia that they could accept the Singapore PayNow payments too.

>" the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank"

I am not sure it is a better proposition if one looks at staggering amounts of debt caused by credit cards

You don’t want to spend money you don’t have? Congrats, your credit score is trash and now you can’t rent a house (let alone buy).

Do you mean via credit cards, or on the whole, including a mortgage? We have a mortgage, but have made all but 1 or 2 credit card payments in 20+ years - we forgot to pay a $50 bill once, IIRC. Outside of the mortgage, we've never spent money that wasn't already in our bank account - not even "it's coming in our next paycheck". Our credit scores are fine.

I mean just credit cards generally. You have to play the MasterCard/Visa game or else lenders won’t rent to you. I’ve been denied many rental properties I could very easily afford because “oh someone else applied and their credit score was over 800”

Only in the US, building Credit isn't as important in other countries AFAIK.

You're not forced to use credit cards irresponsibility to benefit from the credit score boost they provide.

Sure, but you have to play the Visa/MasterCard game. We allow them to rule the country so much that if you’re not an active customer of theirs you can’t get a roof over your head. I don’t think any other company in the world has that much power.

That's only in the US. The few other countries that have credit scoring mostly have negative scores (basically, a lender can check if a prospective borrower has failed to pay loans/taxes/etc. previously). And it is only restricted to lenders.

It's a much better system than the dystopian American one where prospective employers and renters check your score, which is built based on a ton of relatively private information, to determine if you're worthy of renting or working. And people have to game the system by minmaxing credit cards to be able to have the chance of renting or even working. It's utter nonsense that doesn't serve anyone other than the credit card companies and credit score bureaus.

You can pretty trivially set credit cards to auto-pay and use them as debit cards, with the only difference being a delay in any overdraft penalty.

Sure, if you overspend you get heavily penalized, and that's not great, but you don't have to spend a dime of interest to build a respectable credit score.

Again, you’re being forced into playing the Visa/MC game.

There are other ways to build credit, credit cards are just the easiest and most convenient.

Cut the BS please. I do not have to use CC when I do not have money and still have perfect credit score. Personally I do use my CC only when there is no other option and I pay it off immediately after making a purchase. My credit score is perfect and I've never spent using CC more than I have on my account.

You’ve been playing the Visa/MC game for 20+ years to achieve a perfect score? You might then agree they have an overly large amount of influence in life?

I did not play game to achieve a score. came naturally. As already said I only use CC when there is no other option.

But yes I do agree that Visa/MC are an abomination and I would prefer them to die. Along with the idea of credit score.

I am in Thailand. Fraud is a much smaller issue because it’s a push-based system. You cannot withdrawal from someone else’s account just by knowing the number, unlike with credit cards.

What about fighting charges? In the US, if I flag a charge on my credit card it's immediately cancelled and they deal with it.

How does that work?

Not well is my guess. You best treat it as a cash equivalent, because it's a push method.

They way it works I don't receive a charge like you do with visa, the merchant presents a code, you scan it when your bank app and then the bank app asks if you want to send # of money to [merchant name], if you don't want to pay it then you don't approve the transfer in your app on your phone.

However after the fact there's less options, I've never gone through

Bundling consumer protection with the payment system was always a bad idea. Payments need to be instantaneous and free.

The returns/refunds can be handled offline by a mutually agreed facilitator that does not have a monopoly on the payment system. You can also have a legal mandate that all internet purchase, for example, should employ such a service, that charges a market fee and is then liable for making fair decisions.

It is not a bad idea. This is how it is supposed to be. My bank offers this even with Mastercard. I have to approve transactions when paying online. It's instant, I finish checkout, and then I receive the push notification asking me to confirm the transaction. I don't know if I would ever use CC in a country where banks don't allow this.

That is authorising the transaction and it makes sense for the card issuer to handle that. It's proving that it's "you" using the card and you really intended to pay for that thing.

The case where you have a dispute with the merchant (i.e transaction is authorised but problem is 1 layer up - reality is wrong!) is different. You paid as intended but the thing you wanted didn't happen. Right now those are bundled together.

Sometimes this is handled by marketplace (think aws, vs paypal/ebay and their balance of favouring merchant vs consumer) but overall (e.g. consider shopify who are basically uncontactable in case of merchant disputes) I don't think the payments system makes this very clear. It could be made clear who has the responsibility for resolving merchant disputes and this could be a more explicit point of difference in service offerings.

P.S. There are a LOT of details in this specific idea, some consumers are bad actors and are never happy, some merchants likewise are bad actors. Resolving these issues without disclosing sensitive information is extremely difficult. But largely processors are sort of punting on it in various ways when common sense resolutions seem possible. Like if a consumer has 50k transactions with 0 chargebacks and they initiate a chargeback, it's probably a merchant problem. This argues for collapsing the layers but channel-specific resolutions have the advantage of being able to look for delivery signals and other specific mechanisms of performance. Figuring who is right in the world is a hard problem in general. Possibly the Stripe Elite will correct me here since this is the Hard Problem of payments. Which can be solved well enough with statistics. Payments has a whole lot of Hard Problems which seem easy at first, it's a great area.

Now you are just confusing consumer protection with having a secure online payment system, which credit cards are not and never will be. The entire "transaction approval" shtick is just a bandaid for passing a static password around in clear text, your credit card info.

Consumer protection deals with chargebacks after the payment was made and the products/services are not delivered to required standards. This gives enormous power to credit card companies against merchants and enables obscene rent extraction against consumers who don't require it, yet still pay 2-4% more on everything they buy, even with other payment methods.

Consumer protection can still be separate in this case. That's not a problem at all. The only reason it is not prevalent in these countries yet is because they in general have lax consumer protection laws. But this can easily change. The unified payment interface does nothing to exclude it.

That's not really what I asked.

What happens if a fraudulent charge happens?

If payments are always approved by the payer with their PIN / FaceID, then the idea of a fraudulent charge is just undefined.

Like you hand cash to someone. The transaction is done at the moment money changes hand. You don't get to call someone to snatch the money back to you against the payee's will.

For online purchase, for example, buyer pays the marketplace (e.g. taobao.com) to temporarily hold the money -> seller ships the goods -> buyer confirms goods are received -> marketplace pays seller. If there is a question, you take it to the marketplace to sort things out according to marketplace & seller policy. Either way, the payment provider doesn't concern itself with any of this - it only routes money according to payer's request.

It does not work as seamlessly as CC w.r.t chargebacks.

What a lot of folks do is they pay for most purchases with UPI but try and ensure there is some kind of "undo" button somewhere for large purchases. If I am making a purchase on a shady website, or making a large purchase, I will pay using CC so that I can chargeback and the CC company will deal with it. However, even if I am buying a laptop or whatever on Amazon, I know that amazon will deal with returns and stuff properly, so I would just UPI it. There is also the matter of credit card offers and points and what not. If there is a good discount then CC is used.

What happens when it's so easy and people start abusing this system?

May be related: Discover refused a charge back from when Walmart sold me invisibly unusable food in a sealed container and was creating bureaucratic hoops to return it. They told me that they blanket deny all charge backs for food.

In the Netherlands, possibly more of Europe, you can do a chargeback ("storneren") on automated deductions, which can be used in the case of conflicts, e.g. a company withdrawing money from your account even though you cancelled a subscription.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

This is the entire value proposition of credit cards and is what undergirds the issuer (bank) justification for interest rates assessed. To be able to defer card-holder immediate payment for some period of time and/or to put the onus of proof-of-purchase on the merchant instead of the card holder.

The last point is non-trivial when considering debit or debit-like networks result in funds being transferred during settlement (often performed daily), thus making the customer responsible for proving they did not perform the transaction post hoc.

> AFAIK some places already have it, like Thailand and Malaysia.

Also Vietnam (Napas247), Singapore (PayNow), Philippines (QR Ph), Japan (lots different systems), China (WeChat/Alipay, I think?), Russia (SBP), Belarus (ERIP, in a sense), and the whole of EU (SEPA transfers).

One problem is, most of them don’t really work for you if you’re a foreigner. Moreta (YC S24) is doing something in SEA, and I’ve seen another service for visitors in India, but I think exchange rates wouldn’t be too good (compared to something like Wise, maybe on par with regular banks though).

https://moretapay.com/, https://ale.sh/r/moreta (affiliate link)

https://wise.com/, https://ale.sh/r/wise (affiliate link)

The EU is also now pushing WERO

https://en.wikipedia.org/wiki/Wero_(payment)

That's a commercial service backed by some European banks. It's not at all comparable with a non-profit service like Brazil's Pix.

The closest EU equivalent would probably be the planned digital euro, but the banks are fighting tooth and nail to prevent that.

Not only that - ECB, EU Comission / Council also supporting it.

Though, most of the shares belong to major EU banks, yes.

Isn't that (and its predecessor iDEAL) basically a layer on top of SEPA transfers though? (not that that's a bad thing)

Kind of, but with easier UX - because a SEPA transfer, which is free and instantaneous, still requires the sharing of a bank account number, while Wero works with QR codes, phone numbers, etc. They're also planning to expand it to NFC payments and online payments.

You can make a QR code for SEPA transfers: https://www.europeanpaymentscouncil.eu/document-library/guid...

(One of many generators you can try: https://qrcode.tec-it.com/en/SEPA)

Doesn’t seem to be supported too widely though :(

Oh that's neat. FWIW the camera on my android phone doesn't understand that QR code, but my banking app does.

India has UPI (Universal Payment Interface) for instant free transfers. They are working with Singapore to integrate their payment systems so that people will be able to send remittances instantly across the countries.

Yeah, and some of SEA payment modes already do cross-accept each other actually.

Fairly sure QR code based payment systems are pretty common outside of the western world since China popularized it. You cam even hook your credit card up to something like Alipay and get by with minimal extra fees.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

Rewards is another big one and the reason I personally prefer to use credit cards where possible.

Rewards exist because credit card transaction fees to merchants are very high, though. Europe put a limit on those fees and no credit card rewards exist here.

Sure, but for those of us in North America, it's still a draw. That said, I can see that the consumer would potentially be better off if fees went down, prices dropped, and rewards went away. But that's probably not a realistic future.

The unfortunate reality is that even if fees disappeared tomorrow, most merchants would just keep the current price and pocket all the extra money as profit.

Interesting you're saying that, because my usage model is: US credit cards w/reward points, in Europe. The cards I use have no currency exchange fees, and very good transaction rates (€ to $), so other than the unavoidable (majority of my money being in the US) ups and downs of value of $ vs € (great up to six months ago, degrading since the arrival of the new admin in the US) I get the best of both worlds, i.e. European lower COL, and rewards and services (e.g. car rentals and insurance, flights, hotels, etc.) from use of US credit cards.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.

> Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.

No, because it's free, there is no high transaction fee to pay for those rewards. And that's ultimately better.

India has UPI. China has something. It is only a good thing that this should spread everywhere.

There is UPI too in India, pix also sounds decent! Pardon me but I think pix is open source too which is nice too !

Haven’t the Eurozone and presumably many other places had this for quite some time now? Or is Pi. somehow better than SEPA?

Pix, UPI, etc are nationally silo'd and have little risk of spreading around the world. They took over their respective countries because they were government backed and mandatory.

The US has its own version of this: government backed, 24/7 instant settlement payment rails (called FedNow). It released in 2023 but adoption is slow because it's not mandatory. Banks are especially slow to support "Requests for payments", which might compete with card networks for retail purchases.

It's the banks, not Visa / Mastercard, that make the most off credit card fees. Visa / Mastercard take .1-.2%, the bank takes ~2%.

The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud. Irreversible payment rails are a nightmare for consumers who are used to chargebacks being built in to the payment rail, and banks are skeptical of exposing such rails to consumers because most of the time the banks are required to make good when the customer is defrauded.

> The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud

I'd certainly dispute the former part. Strong, in a subset of cases. But chargebacks are still, ultimately, a he-said-she-said a lot of the time, and it's very easy to find abuses of it. Not to mention, merchants who blanket ban and revoke access to purchases because of even legitimate chargebacks. There's little recourse for that other than arbitration, generally, if that.

The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud.

This has nothing to do with instant payment. Lets say $1000 is lost from your checking account due to fraud then is it covered by visa or mastercard? consumer protection there is different.

With SEPA or UPI it is irreversible but it is the same like you ACH transfer. If you do a mistake then it is irreversible.

Some people here talk about Amex, VISA or mastercard giving free damage insurance on purchase of consumer items like phone etc. That is not consumer protection. That is more like one gets this free insurance for paying yearly fees or maintaining account.

Another reason for fraud is the use of magnetic stripe based card readers.

UPI & RuPay are not mandatory, they are completely optional.

Citizens and travelers in India can pay by cash, card, UPI or NetBanking to make offline or online payments. A new or existing customer or a Bank can randomly get (and can anytime request for a replacement card) to Bank to get the ATM/Debit card as RuPay, Visa or MasterCard card. So RuPay card is optional too.

But nevertheless, the technology stacks behind UPI and RuPay have been built to be so versatile, scalable and robust that they now account for 85%+ debit & payment transactions in the nation! India is rapidly heading towards a cashless economy!

Due to the interoperability, scalability and resilience in the technology stacks for UPI & RuPay, these brilliant solutions are now being sought after by other nations, who are eager to buy and leverage these tech stocks to implement their own branded payments systems that will replace Visa, MasterCard, Amex, etc. in those nations.

e.g., UAE has tied up with NCPI (Indian government organisation that implemented and manages UPI & RuPay) as a tech license deal and UAE has already started its own implementation of RuPay, which it has branded as Jaywan. So the Jaywan Debit cards are alternatives to debit cards from Visa, MasterCard, Amex, etc. in the UAE.