"It didn’t go unnoticed in Frankfurt that Visa and Mastercard suspended operations in Russia in March 2022 after the invasion of Ukraine……Thirteen of the 20 countries in the euro have no domestic card scheme. You use an international operator, or you pay in cash."
It hasn't gone unnoticed that the US is threatening to invade an EU country's (Denmark) territory, either. Would a future President Trump or President Vance threaten to shut down European financial infrastructure if it opposes an annexation of Greenland? Who knows, but better to take away that opportunity for leverage.
The plan is that you can link it to your bank account or open a special account at post offices throughout the EU. There will be phone apps for payments and digital Euro debit cards. Visa/Mastercard & Apple/Google Pay typically charge 3% fees; the digital Euro will have none. That will ensure it is speedily adopted by retailers and quickly supplants the US providers. Also worth noting its technology will be 100% European only, leaving zero vulnerability/leverage to non-Europeans.
Digital euro: what it is and how we will use the new form of cash - The European Central Bank is determined to break the US grip on card payments
Ah man, I was kind of excited until it said European-only.
I thought maybe I'd be able to build a till from scratch without purchasing a software suite from IBM written in the 80s.
Right now the best I can do is accept Crypto on such a machine.
I mean, you absolutely could make a till but you still have to hook it up to a payment provider like Adyen, Stripe or a terminal that handles the payment.
I mean, it's gonna ultimately have to work everywhere
People don't like having cards they can't use when they travel
It's not gonna happen right away, but I don't see how it doesn't end up that way
Edit: although reading more it might not be equivalent to the existing kinds of cards as it seems to be a debit only provision (i.e. potentially lacking a lot of the protection you get from using a credit card as your main purchasing card). Will be interesting to see how this evolves
A lot of people don't even own credit cards here, so that isn't really a massive problem.
A credit card that only works domestically is not a deal breaker. Most of the time, people don't travel abroad. So, using a more advantageous card (more perks, less fees, etc.) domestically makes sense.
Domestic providers are a thing in several countries which are smaller than EU. Some of them don't operate internationally so this news isn't that weird
What makes you think this card will actually have more perks or that anybody but merchants get anything here? I get roughly 3-4% in rewards, a $100 travel voucher every year, free dash pass and Lyft memberships. My perks might not be for everyone but there are a ton of good cards out there and this seems to offer the end user few reasons to care.
Are you in the EU? My understanding is that those rewards are not available in the EU due to their much lower transaction fees. Admittedly, I'm not in the EU, so this is second hand knowledge.
No, of that's the case then it's less of a difference.
For what it's worth, the rewards they give are taken from merchants commissions. It might be great for the cc owner, but it's not very fair
Yes I understand. But fairness rarely changes consumers behavior.
It’s a public service for people in the EU and businesses operating in the EU paid for by EU taxpayers. So I doubt it will be rolled out outside of the EU. It still cost money to operate the service eventhough it is provided for free. If it ever gets to work outside the EU it will probably only be for people that have EU residency. No way they want to subsidize the transactions for people from outside of the EU with EU tax money.
If it works and grows, the service could be SOLD to foreign entities
It's DoA unless the EU mandates or coerces end users. There is absolutely zero incentive for anyone but the merchants as far as I can tell.
No fees is a great incentive
For merchants.
Yeah, for the merchants. If you were about to pay for €200 of groceries and had this card and a Visa card that gave 3% back, which would you choose to use.
So merchants counter by the EU card getting a 4% discount over credit just like many do these days for cash. It’s easy to beat the rewards rate.
Some people have preferences based on morality and values rather than a pittance of insultingly low rewards.
Yep, with you there but people are people. They will see those rewards and go for it. It is the same reason why the JC Penny campaign to remove flashy sales and discounts and just price items lower failed.
Merchants and banks, and you bank may very well incentivise you
Ironically it's EU rules that prevent merchants passing card fees onto customers