undefined | Better HN

0 pointsTuna-Fish6y ago0 comments

What I don't really get is why American payment systems insist on including some way to pull money out of an account, which therefore requires massive amounts of trust.

The way the European system works is that there is one possible operation; the owner of an account can move money from their account to any other account.

If you want me to pay you rent, you provide me with a standard format bill, which includes your account number, the amount, the date to pay by, and an optional reference number (for use of the recipient to tell what I was paying for). To pay, I input those into my banking app (or more likely, read the barcode on the bill with my phone), verify that everything is correct, and press a button to transfer funds.

The point is, I don't have to trust you to do any of the banking right. I have paper trail from you in form of the bill you provided (which confirms that the numbers I used are correct), and from my bank that the transfer was initiated on a given day at a given time. There cannot be any error that I didn't make.

0 comments

dmurray6y ago

> The way the European system works is that there is one possible operation; the owner of an account can move money from their account to any other account.

This isn't true at all. The direct debit system allows any participant to withdraw money from your account, providing just your account number and a claim that you authorised them to do that. You never have to directly tell the bank anything, and in many cases you can't even opt out of the process or deny access to an individual withdrawer through the bank.

The banks are meant to limit access to the direct debit program to companies they trust, and cut off access to bad actors, and make whole customers who were debited in error or by fraud. How enthusiastically they do this depends on the bank and the local regulator.

glogla6y ago

Not sure where you're from, but here direct debit requires setting up "direct debit agreement" by the owner of the account, that specifies account number the debit comes from, how often and maximum amount.

So you setup something like "account 123 can debit up to 100 EUR monthly" and the bank enforces that.

w1nst0nsm1th6y ago

You're required an ID card (in most country in europe, a digital id) to prove your are the owner of the bank account and in case of a procuration, you still have to prove you id and you need the procuration itself which contains reference of id card of the account owner and other details.

You could theorically withdraw money from an account by faking the procuration, providing you know the id details of the account owner, but you are still required to present your id card which contains a digital photo of you to prove you are who you pretent to be.

Fake id are maybe common in the us thanks to your broken SSN system but in europe, digital id cards are centralised from the moment you're registered as human being at your birth and banks have access to that system when they check your id.

Any attempts to withdraw money from your account leave a trace, and in case of fraud, you would be quickly with the cops on your trail.

Symbiote6y ago

Don't generalize all of Europe (or the European Economic Area) unless you are confident that you are correct.

The UK and Denmark don't have identity cards. At least in those countries, there is occasional fraud. The banks will fix it (at least in the case you describe), but it can happen.

j / k navigate · click thread line to collapse