Digital Euro Expected To Launch By 2029 After EU Backing (euronews.com) 96
The European Parliament's economic committee has backed a digital euro designed to reduce Europe's dependence on US-controlled payment networks such as Visa and Mastercard. The ECB-backed currency is targeted for launch by 2029 after a full parliamentary vote and negotiations with EU member states. Euronews reports: Under the proposal, consumers would be able to hold digital euros in a dedicated wallet, subject to a holding limit that has yet to be determined. The system would support both online and offline payments and is intended to offer a high degree of privacy, with the ECB unable to directly identify users from their payment data.
The ECB would provide the underlying infrastructure, while commercial banks and payment service providers would offer digital euro services to customers. Financial institutions are expected to be compensated for their participation in the scheme, while merchants will pay fees that are expected to be lower than those associated with current card transactions.
How that compensation should be structured remains one of the most contentious issues ahead of negotiations with EU member states, according to three sources familiar with the discussions. [...] The European Parliament is expected to formalise the committee's position during a plenary vote in Strasbourg in early July. Negotiations with the EU's 27 member states would then begin, with lawmakers aiming to reach a final agreement before the end of the year.
The ECB would provide the underlying infrastructure, while commercial banks and payment service providers would offer digital euro services to customers. Financial institutions are expected to be compensated for their participation in the scheme, while merchants will pay fees that are expected to be lower than those associated with current card transactions.
How that compensation should be structured remains one of the most contentious issues ahead of negotiations with EU member states, according to three sources familiar with the discussions. [...] The European Parliament is expected to formalise the committee's position during a plenary vote in Strasbourg in early July. Negotiations with the EU's 27 member states would then begin, with lawmakers aiming to reach a final agreement before the end of the year.
CBDC, and so it begins (Score:3)
How soon until all other cryptocurrencies and cash are outlawed?
Re:CBDC, and so it begins (Score:4, Insightful)
Whatever it is, it's not soon enough. We don't need a system used exclusively for illegal purposes and money laundering while burning through a metric fuckton of energy to provide no economic or social value what so ever. Fuck crypto.
Re: CBDC, and so it begins (Score:1)
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As soon as cash is gone, taxes are going to be hiked because economic activity can't escape into the grey zone so easily.
Re:CBDC, and so it begins (Score:4, Interesting)
As soon as cash is gone, taxes are going to be hiked because economic activity can't escape into the grey zone so easily.
Logically the opposite: as soon as cash is gone, taxes are going to decrease because economic activity can't avoid paying taxes by escaping into the grey zone so easily, and hence the people formerly dodging taxes will start paying their share.
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As soon as cash is gone, taxes are going to be hiked because economic activity can't escape into the grey zone so easily.
Logically the opposite: as soon as cash is gone, taxes are going to decrease because economic activity can't avoid paying taxes by escaping into the grey zone so easily, and hence the people formerly dodging taxes will start paying their share.
I love your optimism; however, government spending grows to whatever amount is available and then shortly thereafter exceeds it. Taxes will grow until it is no longer possible to tax anymore.We will never get quite that far because the system itself will collapse before it can take everything.
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As soon as cash is gone, taxes are going to be hiked because economic activity can't escape into the grey zone so easily.
Why on earth would that be your logical conclusion. World wide there's no link between tax rate and cash prevalence. Also logically taxes exist to balance budgets (yeah yeah we know how well that works in many countries), cash provides a means to avoid paying taxes which puts upwards pressure on the tax rate. So it follows that if the ability to skip paying taxes is removed then the pool of money becomes larger for the same tax rate so the tax rate can be reduced.
Of course in practice it doesn't follow that
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Lets go with the UN number. There are 195 nations in the world. We can argue there are more but the odds of getting any good data out of the ones the UN does not even recognize are low.
A good deal of those, all EU members for example are shall we say less than independent in their ability to determine tax rates at least for certain types of taxes.
Check writing has been around in various forms as long as there has been banks, but as far as day to day transactions go, ie not weekly payroll and major purchase
Re:CBDC, and so it begins (Score:4, Insightful)
Biggest concern will be privacy issues.
It's bad enough that the major payment processors have any say so about what their cards
can be used to purchase and how much leverage they have in what services can be tied to
their cards. ( Think the adult entertainment and / or firearm industries )
Now, you introduce a system where the government will get a snapshot of every single
purchase you make and can easily evolve into a permissions model where your purchases
must only be those that are approved by your government in question.
( Especially in the UK where mean comments on the internet are enough to get you arrested )
On a whim, they can simply turn off your digital account and you have zero recourse to do anything
about it if cash isn't an alternative. See how willing you are to attend a protest or demonstration when
facial recognition tags you, suspends your accounts and leaves you with nothing until you report to
the local magistrate to discuss your recent participation in the aforementioned protest.
Cash will always be king when it comes to the right to privacy.
Re:CBDC, and so it begins (Score:5, Interesting)
As the summary notes, it is designed so that transactions are anonymous to the ECB. Likely that means pseudo-anonymous, in that identity could be determined with some effort, but that goes for cash too. Fingerprints, serial numbers, CCTV everywhere...
The goal is to provide a replacement for cash, because cash is expensive to manage. The government has to physically create it, and replace it as it wears out or the security needs updating. Businesses have to count it and transport it to the bank, and can be victims of counterfeiting. One of the reasons why many of them prefer card payments, even with the fees, is due to the overhead of handling bank notes and coins.
To do that, it is going to have to be genuinely as private as cash is. Believe it or not, the EU isn't all about surveillance, and privacy is considered an important right. Remember that the EU created GDPR, and some member states like Germany go even further with strict privacy laws.
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If you actually believe any of that I have bridge to sell you.
Collecting finger prints, logging serial numbers, and finally correlating any of that with other data sources means at the very least getting hold of the notes to make some comparisons. You are talking about a high friction high cost effort that generally speaking can only be employed against someone already being watched.
Digital currency on the other hand means we are few SQL joins from tracking any token thru the economy as far as one might wi
Re:CBDC, and so it begins (Score:4, Informative)
It doesn't use SQL, or require any kind of central server. Transfers can be made P2P locally, completely offline. Details have not been finalized yet, but it will likely be similar to how stored value transport cards work. The card has a serial number, but is fully capable of making offline transactions in which only the transacting terminal/card details are recorded, and only on the devices involved in the transaction. It's likely that phones will have the wallet functionality built in, as they do for some transport cards like Suica.
So if you were arrested with the card on you, they could check if you used your card to travel, or if you transacted with a specific other card, as long as it was within the card's memory (typically 20 transactions). If the card wasn't on you when they got to it, they would need to prove it was yours.
In privacy terms it is a little less private than handling money, but only a very little. Buying transport tickets will have you on CCTV anyway, and most people already use cards. You could give the card to someone, effectively transferring the balance to them.
Or just not use it if you are that concerned. For most people it will be a huge upgrade compared to having VISA/Mastercard track them all the time. While they won't get the same protections that VISA/MC offer, I think it's likely that retailers will probably sign up to similar terms to encourage use, since it ultimately saves them money. If not, terms could be added to local laws.
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Honestly if they just crack down on the money laundering it goes away overnight.
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If youre a privacy purist worrying about your ability to keep your transactions totally private, well, I respect your right to hold your own opinions but you
There is very little need (Score:1, Flamebait)
Bank-transfers are fast, cheap, efficient in the Euro-zone. A "Digital Euro" has no real uses. My take is this is some politicians desiring to appear "modern".
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My take is this is some politicians desiring to appear "modern".
Really, that's all there is to it, do you think?
Okey dokey.
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Your fake superiority and arrogance is simply one thing: unbecoming.
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"unbecoming", eh?
You should use the word 'fake' sparingly, you really should.
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I did not expect you to understand my comment. Oh, and look, you did not. Well.
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Oh sure, it was very deep, no doubt. Easily missed.
Re:There is very little need (Score:5, Insightful)
Bank-transfers are fast, cheap, efficient in the Euro-zone. A "Digital Euro" has no real uses. My take is this is some politicians desiring to appear "modern".
The idea is not to replace or compete with SEPA: it's to try to replicate some nice aspects of cash in a more and more cash-less society especially for day-to-day transactions.
A cash-less payment currently needs to involve a private financial institution somewhere in the transaction. This is because the central bank only issues cash. This "digital euro" supposedly will allow for cash-less transaction only involving government institutions instead of private ones.
Of course the question is whether you trust more a government institution than a private one and whether this will open the door to an eventual phasing-out of cash down the road...
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Europe is not gong cashless. Some politicians dream of it, but it is not going to happen.
Re:There is very little need (Score:5, Interesting)
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Europe is not gong cashless. Some politicians dream of it, but it is not going to happen.
Completely cashless is likely not going to happen any time soon, but more and more people pay cashless most of the time. I don't even remember the last time I paid something with cash myself.
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Oh, some groups of people are ging cashless, no doubt. But that is quite different from a whole society doing it.
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I believe you're right; in fact Sweden was almost cashless not too long ago, but they are going in the other direction again.
In the end I think things will work themselves out. People will vote with their feet and governments will follow.
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Sweden is a very interesting case. I think what they have is a result of mindless enthusiasm and not thinking things through colliding with reality. Reality always wins out in the end, but it can take some time.
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Go do a bank transfer at your local supermarket and see how far you get. Oh but thegarbz, we have debit cards! Yes we do, go look at which company is currently responsible for clearing debit transactions. Ever wonder why the Maestro logo looks so similar to Mastercard to the point where you question why they haven't been sued for trademark infringement?
The best bet you have right now anywhere in Europe of clearing bank transactions easily without the help of a US tech firm, is via Wero / iDEAL and those are
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I could have done that an hour ago. Yes, it would have been an actual, instant bank transfer and the only payment processor involved would have been a domestic one. I prefer to pay cash, but it is absolutely no problem doing things electronically with no US service provider anywhere in there.
I do not know where you get your information from, but as usual, it sucks.
Re: There is very little need (Score:2)
Ah, so does that work in all EU-countries? Or just in yours?
Re: There is very little need (Score:5, Interesting)
Ah, so does that work in all EU-countries? Or just in yours?
Instant SEPA support for retail payments is still fragmentary and relies on private financial institutions.
The idea with the Digital Euro is that it would effectively have "legal tender" status. The EU would definitely push for widespread adoption.
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Hmm. Maybe. Probably not though, because the cost may be prohibitive for smaller businesses, unless they are allowed to alternatively accept cash as well and refuse the digital version. But then the digital version loses most of its advantages.
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I could have done that an hour ago.
Extraordinary claims require extraordinary evidence. Please link me to the website of your supermarket so we can verify whether they accept SEPA transfers at point of sale. Also name the exact method of payment you used. Let's see if you're right, and if it's widely available throughout Europe. Balls in your court.
I do not know where you get your information from, but as usual, it sucks.
Real life, living it throughout all of the EU. The closest to a US company free point of sale system that is nationally accepted and widely available at normal points of sale is a Girocard and tha
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It works nicely in Switzerland with TWINT.
And Maestro is owned by Mastercard.
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(Not European, and not a banker.)
If the problem is American companies doing the transactions, why is the solution a 'Digital Euro' and not use an EU backed transaction processor? Why don't you keep using 'normal Euros' in 'debit-card like transactions' but have the processing be done by a more acceptable organization?
In short...what's the difference between a 'digital Euro' and any sort of 'digital monetary transaction?'
Is it the 'wallet?' Instead of having your money in a bank, it's in a 'wallet' (wher
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Hmm, the Summary does mention Offline payments. So I guess I need to read better.
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Actually, Maestro/V-Pay are usually only used for clearing international debit card payments as a co-badge and for national payments the national interbank systems take precedence.
And the only reason why Mastercard is responsible for Maestro (which, incidentally, is being phased out) is because they have aquired Europay back in the day.
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What is this "skim" you are talking about? An "Echtzeit-Überweisung" may, by law, not be more expensive than a regular SEPA transfer. For most private customers, SEPA transfers are free these days.
I am really getting tired of big-mouth no-clue people like you.
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Can you name these elites?
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You seem to be stuck in some paranoid delusion there. Get help.
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The digital Euro is anonymous. Bank transfers are not.
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Ok, crime-financing, money-laundering, and other unsavory uses may be a valid application scenario. Or not. Because, you know, the designers may have known about this little problem and taken it into account.
Oh, and look, that has happened: https://paytechlaw.com/en/digi... [paytechlaw.com]
Funny how doing some minimal actual research (30 seconds in my case) yields better insights than mindless belief.
You don't use Visa/MC for digital payment (Score:3, Insightful)
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You use it because you have no other choice. Time to take away their monopoly.
I don't know what's worse, VISA/... controlling your money, or the US government. But right now, both do.
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You use it because it's a layer between you and whoever you're paying. It lets you dispute charges. And you don't have to give anyone direct access to your cash.
Oh we don't need to pay someone for protection in the EU, we have this thing called consumer protection laws.
No no no no no (Score:1)
Re: No no no no no (Score:2)
You think the government doesnâ(TM)t already have access to all your CC and bank transfers if they care? On top of tour bank and the processor?
Sweet summer child.
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FBI caught the Jan 6th bomber by searching card swipes for a specific item purchased four years in the past. That should have alarmed people more than it did. They're hoovering up all purchase data from all retail and storing it indefinitely.
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I know they combed through store info to catch him but I'm not seeing anything about the items being purchased 4 years ago.
indirectly identify? (Score:1)
is intended to offer a high degree of privacy, with the ECB unable to directly identify users from their payment data.
So ECB can indirectly identify users from their payment data, or some non-ECB entity can directly identify users?
I have a hard time imagining they wouldn't have a way to accomplish this as they wouldn't want the system to become a tool for human trafficking, Russian oligarchs, drug cartels, terrorists, etc.
Am I just being paranoid?
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Yes, exactly. The "directly" makes it clear that there'll be no privacy when they want to track everything "indirectly" later.
It's all so tiresome.
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Each system with monitored exchanges allows indirect monitoring with varying degrees of efficiency. You don't need full transparency like Bitcoin to do datamining. If I withdraw a million from my bank account and some time later you deposit a million this may be a hint who paid whom. With the large volume of transfers (and probably also high-volume transfers) it is no absolute indicator, but monitoring the suspect accounts some more time (and using past data) you can get a pretty good idea what happened. Wh
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Not at all paranoid.
Cash is already tracked to some extent- e.g. which notes (serial#) were drawn from what ATM, when and where. But it's incomplete.
Certain small cash transactions are still anonymous. And anonymous transactions are bad.
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The system should become as anonymous as cash. If you associate cash with human trafficking, you have the same trafficking problem cash has (in your argument).
Goodbye money (Score:2)
I know! Let's make it so you can blacklist those funds on the blockchain and then they're not spendable. That solves the problem. And you know what, once that system is in place, let's vaporize all the mone
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No blockchain involved.
FAFO (Score:3)
... designed to reduce Europe's dependence on US-controlled payment networks ...
So the US tech and financial sectors' acquiescence to Trump and his administration's Fascist ways are coming back to bite them. Good. "The more you tighten your grip, Trump, the more countries and income opportunities will slip through your fingers." (Apologies to George).
That said, I don't trust the European "commercial banks and payment service providers (who) would offer digital euro services to customers" - mostly because 'bankers'. Another Star Wars quote comes to mind: something or other about altering the deal...
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And Already It's A Loser (Score:3)
To be sure, the idea of offline transactions and privacy tickles my pickle. But, you know it's going to be a mess, to the point that they'll have to restrict balances and transactions to levels that make it virtually useless..
Then there is the 3 years to start rolling it out? Maybe? It's a sad situation to watch the huge potential drain into the crapper.
Meanwhile, India has it's Unified Payments Interface(UPI) [wikipedia.org] based digital transaction system. The customer(payer) scans a QR code for the vendor's(recipient's) account number, types in the dollar(Rupee) amount and hits send. DING! transaction complete and confirmed for the recipient. [therevolverclub.com]
It's a fantastic system. Completely FREE. Instant. Pervasive... Ofline transactions are limited and sure, for transactions beyond a certain size, it has to be tied to your bank account. But, that's a good thing! No lost wallets, no transferring in and out. No middlemen or transaction charges. No stupid restrictions. Think Apple or Google Pay, but FREE, instant and pervasive! The EU could buy/license that system and be rolling in time for Christmas. But, no. They're going to take their time and fuck it all up.
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We have free and fast direct bank transfers in the UK too, some (mostly Asian) restaurants only accept cash or let you transfer the amount directly to their account presumably to avoid the visa/mastercard fees!
All that's needed is a open, universal way to do this more streamlined and the Indian UPI thing sounds like just the ticket!
Aside: Why is a digital currency needed--it's completely unnecessary and unrelated to creating a competing payments network:https://en.wikipedia.org/wiki/European_Payments_Initia
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We have an equivalent of UPI being rolled out in the EU already in the form of Wero (something which the Netherlands has been using since long before the UPI system was introduced). Works much the same way, it's just not very prevalent at the point of sale.
But neither UPI nor Wero have anything to do with what is being discussed, which is an *offline* system. No India doesn't have an equivalent, and there's a reason the EU is investigating this while also rolling out Wero bloc wide in parallel.
Two solutions
No. (Score:2)
Wero is different.
Wero is not government owned/operated/funded. It is also not free. It is not anywhere close to being pervasive, at least not so far. And, while it is very fast, it's not instant like UPI.
Wero is more akin to the Zelle system in the U.S. UPI is head an shoulders above the rest.
P.S. UPI does do offline as well. But, transactions are limited in size because their delay opens the window for fraud. UPI is definitely intended to do online transactions.
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Nothing is free. UPI isn't either. Whether it is paid for with a surcharge, implemented in the product price, or funded by your taxes it is being paid for by someone.
It is not anywhere close to being pervasive, at least not so far.
Of course not, it's official rollout hasn't happened yet. The timeline is next year. But in the place where it came from it is universally accepted, and country wide adoption is rolling out in several countries right now (it requires bank level support, so the moment your bank has it then it's possible to use). And payment processors all over t
Privacy? Right (Score:2)
So...ECB will not be able to see transactions. Does the same apply to tax and police authorities? Intelligence agencies? Sanctions enforcers?
If not, it has clear disadvantages to cash - lack of tracking and having to explain every penny if those authorities decide to inquire (guilty unless proven innocent).
Reduce reliance on credit cards? (Score:3)
The EU made it illegal to charge credit card surcharges.
How is this digital Euro ever supposed to compete with credit cards which give "free" consumer protection through chargeback?
Good way to pay for porn I guess.
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It's transaction fees that are the problem with credit cards.
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Everyone else pays for the credit card users when surcharges are banned, so it's not their problem.
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The EU made it illegal to charge credit card surcharges.
How is this digital Euro ever supposed to compete with credit cards which give "free" consumer protection through chargeback?
Most transactions in the EU do not occur via credit card in the first place. In my country only 35% of people have an active credit card account, and I'd be very surprised if my experience with my friends and colleagues saying they only use credit cards when they go on holidays or require a reserved transaction (car hire, hotels, etc) is typical most of those 35% never use it. I keep my credit card in my passport wallet. I've never used it locally.
Now if you want to talk about Visa Debit, Debit Mastercard,
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The vendor's only real option is to refuse.
Card use is growing now in the EU, it was kept small by surcharges.
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Credit card use in the EU is growing. They are growing for reasons I listed:
- Cross boarder travel
- Online purchases
- Digital wallet integration
Even as more and more people have credit cards, they are still rarely used locally. Also for the second one, Online Purchases, you'll find credit card growth in that area stall with the rollout of Wero.
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Those are more reasons for their increased user count, not their increased usage. Which is pretty much completely caused by the removal of surcharges, otherwise the owners would only use them for foreign (online) purchase.
Of course the ball has started rolling now, even those which don't need it for foreign use are getting and using them now. Thanks to the removal of surcharges.
A completely predictable tragedy of the corrupt EU commission causing a tragedy of the commons. They delivered us into the jaws of
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I actually mostly pay with my credit card because a certain turnover is required for keeping the gold card free. But I am the exception, not the rule and it also probably varies a lot by the country.
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That'll vary by issuer. My gold card is free because of my income. My bank considered people with a certain sustained income for over 5 years (not wealthy, just a bit above average) a "preferred customer" and a free gold card is a condition of this. My wife got her gold card before being a preferred customer by taking out travel insurance with the bank.
But yes minimum use is one of those, and even in the EU there's value in having a higher tier credit card (we mostly like it for the travel cancellation insu
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It's a European system, while VISA and Mastercard are both American. That alone is a big benefit for Europeans.
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The EU made it illegal to charge credit card surcharges.
How is this digital Euro ever supposed to compete with credit cards which give "free" consumer protection through chargeback?
Good way to pay for porn I guess.
Oh goodie... another person who thinks their credit card is "free".
Clue by four, it's not, you are paying for it but you just don't know it (and will refuse to accept that fact even after learning it).
First things first, when you use your card the merchant has to pay a percentage of that transaction in fees to the banks and payment processors, the EU capped this at 1%, it can easily exceed 5% outside the EU and routinely goes to 3%. 3 cents out of every dollar goes to paying for your card, at least. I
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Why do you think I put in quotation marks? Merchants pay a lot more fees and costs from chargeback other than interchange fees, the cap is a patch on a gaping wound. We are probably already nearing a full percentage point extra expense for everyone on online purchases because of the surcharge ban. I'll pay for it any way, might as well benefit too. It's defacto free for me to harm everyone else for a small benefit, a tragedy of the commons engineered by the EU commission.
The surcharge ban was predictably id
So is it a debit card or credit card equivlent? (Score:2)
The whole point of credit cards is them handling people that rip your card off so it's essentially insurance. I don't think that the euro wallet would have the same equivalence of a credit card.
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We don't need to pay someone for insurance, we have consumer protection laws instead.
Yes I've had my debit card ripped off, and fraudulent transactions made on debit, and yes I got my money back.
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Nice, how do you do that? Didn't think that was possible. Doesn't that take a lot of work vs credit card?
Central Bank Currency (Score:2)