I did read all that. I’m all for creating a public way around the corporate payment networks.
What I mean is, one could just create a public charge card network that works the same way, with the same infrastructure that Visa, MasterCard, Discover, American Express, Diner’s Club, etc all use. All that would change are the fee structures everyone pays. I don’t see the need to reinvent the wheel here.
What I mean is, one could just create a public charge card network that works the same way, with the same infrastructure that Visa, MasterCard, Discover, American Express, Diner’s Club, etc all use.
Visa and co. mostly don’t work on modern mobile phones. Digital euro strives to replace apple pay and google pay as well. Visa and co. also have lot of redundant functions like payment by credit, solvency assessment, cash back rewards, travel points and purchase protections. Digital euro doesn’t have that and as a consequence, it doesn’t need to intrude into customer’s privacy as much as credit card companies do. Nor does it incur the vast costs associated with credit recuperation on banks.
Visa and co. mostly don’t work on modern mobile phones.
Never had a problem. Not sure what that means
The networks don’t do credit, or cash back rewards, points and the like. That’s not Visa and friends. Those are offered by the banks who back the accounts. Debit cards don’t have those options and work exactly the same as far as the charge network is concerned.
The public network doesn’t have to worry about any of that. People could use it with credit, debit, or charge cards whatever they wanted.
Visa and co. mostly don’t work on modern mobile phones.
Never had a problem. Not sure what that means
It means that you can’t transmit card details to a terminal through NFC. In general, Apple, Google, Xiaomi and co. push their own payment solutions (Apple pay, Xiaomi pay) and block use of NFC by other parties.
The networks don’t do credit, or cash back rewards, points and the like. That’s not Visa and friends. Those are offered by the banks who back the accounts.
I was using a short-hand language with the assumption that You understand that we are not talking about technological implementation. So to unpack my statements for You: Visa and co. mandate that banks and other financial providers implement credit, cash back or customer protection. ECB in their proposal of D€ does not mandate such functionality. In fact, the current proposal prevents implementation of such features. In sum, D€ is a different financial scheme than credit card schemes by Visa and co. and D€ is the less costly (not mandatory implementation of credit, cash back etc.) and more privacy-oriented scheme of the two.
Debit cards don’t have those options and work exactly the same as far as the charge network is concerned.
You listed AmEx previously and AmEx doesn’t do debit cards. So I assumed You want to talk about credit card networks. Visa and Mastercard’s “debit” cards are deferred-debit cards. Specification of D€ is more akin to prepaid cards. So again, there are differences and I’m not sure what kind of “public network” You are arguing for.
In general, Visa and co. provide in parallel a large set of (often competing) financial transaction tools. Mostly, they haven’t invented anything, they just try to stay relevant in the rapidly evolving environment of financial-transaction providers. Especially, in case of digital wallets they are lagging behind. ECB can’t afford that.
I was using a short-hand language with the assumption that You understand that we are not talking about technological implementation.
That’s the confusion. I’m only talking about technology.
I’m not seeing much of a reason to build an entirely new set of tech for this payment system.
Nearly everything you mention can be done with the same existing tech the other card networks do. You only need different contracts for the connected banks, retailers, and customers.
The closest you mention to a reason for new technology is the phone based NFC payments. That could solved with their own NFC payments app. That could be done by just making a new NFC wallet app, which would be great! But doesn’t require a whole new currency and payment network protocol.
That’s the confusion. I’m only talking about technology.
You’re contradicting yourself. Visa and co. don’t own technology. As you wrote, the implementation is left to banks and financial providers. You need to decide whether you want to discuss banks’ software implementation or the schemes designed by Visa and co.
That could be done by just making a new NFC wallet app
You can’t just build an app that uses NFC, like you build an app that uses a phone camera. You need special agreements with Apple (or Google) to access their NFC chip. Visa and co. don’t have such agreements which makes their schemes limited and unattractive compared to D€.
Visa and co. don’t own technology. […] the implementation is left to banks and financial providers.
That’s exactly backwards.
The store POS system doesn’t connect directly to every individual bank that issues a card. They connect to Visa’s server which authenticates the transaction. They’re the network in the middle of the system that everyone else connects to. The banks just provide the account to transact from.
You can’t just build an app that uses NFC, like you build an app that uses a phone camera.
Then how is this new Digital Euro supposed to do NFC transactions if they can’t use the NFC?
They connect to Visa’s server which authenticates the transaction. They’re the network in the middle of the system that everyone else connects to. The banks just provide the account to transact from.
That’s incorrect. Using push-up messages, the authentication is done in bank’s authentication app. If using SMS authentication, the SMS with code is sent and signed by bank. Visa and co. provide a bit of infrastructure and the messages between the processor and customer’s bank travel through their network, but this step is not essential for the transaction. For instance, processor could directly communicate with customer’s bank through ECB’s open banking API.
Then how is this new Digital Euro supposed to do NFC transactions if they can’t use the NFC?
Through regulatory effort. As part of WERO initiative it is already being discussed how EU will force Apple and Google to open their NFC chip. Visa and co. may piggy-back on that effort, but crucially, the regulation will be designed to facilitate implementation and adoption of WERO and of D€ and not the use and adoption of debit cards.
I did read all that. I’m all for creating a public way around the corporate payment networks.
What I mean is, one could just create a public charge card network that works the same way, with the same infrastructure that Visa, MasterCard, Discover, American Express, Diner’s Club, etc all use. All that would change are the fee structures everyone pays. I don’t see the need to reinvent the wheel here.
Visa and co. mostly don’t work on modern mobile phones. Digital euro strives to replace apple pay and google pay as well. Visa and co. also have lot of redundant functions like payment by credit, solvency assessment, cash back rewards, travel points and purchase protections. Digital euro doesn’t have that and as a consequence, it doesn’t need to intrude into customer’s privacy as much as credit card companies do. Nor does it incur the vast costs associated with credit recuperation on banks.
Never had a problem. Not sure what that means
The networks don’t do credit, or cash back rewards, points and the like. That’s not Visa and friends. Those are offered by the banks who back the accounts. Debit cards don’t have those options and work exactly the same as far as the charge network is concerned.
The public network doesn’t have to worry about any of that. People could use it with credit, debit, or charge cards whatever they wanted.
It means that you can’t transmit card details to a terminal through NFC. In general, Apple, Google, Xiaomi and co. push their own payment solutions (Apple pay, Xiaomi pay) and block use of NFC by other parties.
I was using a short-hand language with the assumption that You understand that we are not talking about technological implementation. So to unpack my statements for You: Visa and co. mandate that banks and other financial providers implement credit, cash back or customer protection. ECB in their proposal of D€ does not mandate such functionality. In fact, the current proposal prevents implementation of such features. In sum, D€ is a different financial scheme than credit card schemes by Visa and co. and D€ is the less costly (not mandatory implementation of credit, cash back etc.) and more privacy-oriented scheme of the two.
You listed AmEx previously and AmEx doesn’t do debit cards. So I assumed You want to talk about credit card networks. Visa and Mastercard’s “debit” cards are deferred-debit cards. Specification of D€ is more akin to prepaid cards. So again, there are differences and I’m not sure what kind of “public network” You are arguing for.
In general, Visa and co. provide in parallel a large set of (often competing) financial transaction tools. Mostly, they haven’t invented anything, they just try to stay relevant in the rapidly evolving environment of financial-transaction providers. Especially, in case of digital wallets they are lagging behind. ECB can’t afford that.
That’s the confusion. I’m only talking about technology.
I’m not seeing much of a reason to build an entirely new set of tech for this payment system.
Nearly everything you mention can be done with the same existing tech the other card networks do. You only need different contracts for the connected banks, retailers, and customers.
The closest you mention to a reason for new technology is the phone based NFC payments. That could solved with their own NFC payments app. That could be done by just making a new NFC wallet app, which would be great! But doesn’t require a whole new currency and payment network protocol.
You’re contradicting yourself. Visa and co. don’t own technology. As you wrote, the implementation is left to banks and financial providers. You need to decide whether you want to discuss banks’ software implementation or the schemes designed by Visa and co.
You can’t just build an app that uses NFC, like you build an app that uses a phone camera. You need special agreements with Apple (or Google) to access their NFC chip. Visa and co. don’t have such agreements which makes their schemes limited and unattractive compared to D€.
That’s exactly backwards.
The store POS system doesn’t connect directly to every individual bank that issues a card. They connect to Visa’s server which authenticates the transaction. They’re the network in the middle of the system that everyone else connects to. The banks just provide the account to transact from.
Then how is this new Digital Euro supposed to do NFC transactions if they can’t use the NFC?
That’s incorrect. Using push-up messages, the authentication is done in bank’s authentication app. If using SMS authentication, the SMS with code is sent and signed by bank. Visa and co. provide a bit of infrastructure and the messages between the processor and customer’s bank travel through their network, but this step is not essential for the transaction. For instance, processor could directly communicate with customer’s bank through ECB’s open banking API.
Through regulatory effort. As part of WERO initiative it is already being discussed how EU will force Apple and Google to open their NFC chip. Visa and co. may piggy-back on that effort, but crucially, the regulation will be designed to facilitate implementation and adoption of WERO and of D€ and not the use and adoption of debit cards.
The “transactions will be untraceable” thing seems to be new?
Oh! Yah, that’s plenty of reason. Though I have doubts.