How much are cards and checks worth compared to blockchain?- Me lack of cashWe are more and more numerous to pay for most of our purchases using Bank cards or by transfers while checks are still widely used by a section of the population.
Risks of transaction rejection VS blockchain immutability
Few are those who know the intricacies of interbank procedures related to making card and check payments. And if this is not your case, I can assure you that you are doing no worse for it.
Checks and their risks – a means of payment that must remain in the bank
Let’s start this match by letting him serve minitel payment tool : checks.
The check is a means of payment that is still particularly liked by some merchants as well as bank customers who have not grown up with the Internet. Unfortunately for all of us, each of us may need to use the check in certain situations (check deposit, vacation booking, etc.). Even the government uses checks to distribute certain aid…
The fact that the checks are free plays in their favor, of course it is payment method less certain which exist. Why ?
First, when you deposit a check into your account, the bank advances you the amount before the check is actually cashed, which can still be rejected by the issuing bank.
And, if the check is found to be tainted with an irregularity after a routine check or hit by an objection filed by the issuer, your bank will then debit your account the amount you thought you had collected.
This can easily result in an unauthorized overdraft if you have used the funds as a result of crediting your account.
To better understand the problem, it is necessary to consider that the number of controls issued annually in France (more than one BILLION) makes it impossible to check every title. What facilitates fraud for checks for small amounts on which, logically, banks do not focus most of their checks.
Let’s now put ourselves on the other side of the spectrum and agree that a payment is made internally cryptocurrencies there is little chance of cancellation except in very exceptional circumstances. Once the transaction is validated and confirmed, adding the following blocks to the chain does it immutable transaction and it is almost impossible to get back into it.
of SAFETY of all payments made via blockchain has increased.
Returning to checks, a full book of which would not be sufficient to list all the risks.
BECAUSE checks can be issued in white or used by anyone has access to your checkbook, which obviously poses a significant risk if the bank does not systematically check the regularity of your signature.
A problem that is very conveniently solved by the use of blockchain and private keys that each user must hold dear.
What’s more, there’s also no more risk with blockchain of issuing an NSF payment, which can be as tempting as it is disastrous when you can write a check for any amount (hello bank ban).
With crypto, you can’t send money you don’t haveperiod.
And here we are not even talking about the high risks of check diversion, which certain criminal organizations have made a specialty of.
In particular in relation to sending checks to taxes. Easily identifiable operation and favorable for fraudulent maneuvers. The case for the UAE was quickly supported a system that combines the convenience of control and the security of the blockchain.
Because if a third party diverts the check and manages to defraud the bank (which, as mentioned above, does not check all checks), it is impossible, except to be resurrected by the original payee, to accomplish the diversion. Your account has been successfully debited.
Then engage a often long struggle with the bank to try to recover your funds even though you did nothing wrong… Absurd you say?
Card payments, not a panacea
Check payments are not the only ones in question. A card payment can also be declined.
Here you will enjoy the 300 pages of Mastercard or Visa General Terms and Conditions regarding payments made in France with foreign cards. Operations that often put the trader in a weak position.
Thus, a foreign customer can ask his bank to refuse a payment made in France for various reasons, which are sometimes difficult to answer. This opportunity is source of risk and uncertainty for traders. This is also the case when a wild villain uses a stolen card.
If blockchain makes it possible to significantly reduce these risks, the immutability mentioned above goes hand in hand with careful execution and rigorous management of your operations.
No one will be able to come and help you reverse a wrongly made transaction on the Bitcoin network.
SEPA direct debits – direct debits that don’t always require your consent
To better understand the risk posed by SEPA direct debits (not to be confused with SEPA transfers), it is important to review how they work.
In reality, any company who has an authorization to issue SEPA direct debits (which are issued by banks) you can debit your bank account simply by giving your IBAN to his bank, which will not ask his customer for the signed direct debit mandate because, as she does not know the signer (you), she just can’t do not verify authenticity of his signature.
And so many people find themselves pulled under forgotten insurance or phone plans or, worse, never subscribed to, either through the creditor’s or their bank’s mistake, or through malice (the company designed to get the most out of possible accounts).
If you don’t keep a close eye on your accounts (which can happen when you have the prudence of having several banks), these small withdrawals can go unnoticed.
Oh, the regulations allow you to challenge thembut only within 13 months (article L.133-24 of the Monetary and Financial Code) after the debit date… then, too bad for you.
Let’s go back to our beloved blockchain and our “wallets”. The latter work on a simple principle. Yours SIGNING must come to approve all operations which pass or will pass through your account. When using a decentralized funding protocol (for example), you must first approve the use of your tokens (remembering to set an amount limit) and then validate the transaction again.
Once that is done, you can revoke these permissions at any time, which is always a good idea to do regularly to secure your wallet as much as possible.
This method of operation is much more secure, but it is also more complex and opens the door to scams that play on the fact that most people do not really understand what they are signing on the blockchain, a point that still needs to be improved. to promote adoption.
Bank cards – trust, but to whom?
Have you ever had doubts when you calmly fill in all the information on your card when making an online purchase?
Have you ever thought that you are giving away the keys to the kingdom and authorizing unknown and somewhat serious companies to debit your account?
So of course, online payments are increasingly secure and sites are now massively integrating strong authentication.
That said, giving out all of this information means trusting a third party to avoid being swiped, because anyone with this information can use your card on less-than-average sites.
If banks agree to bear a portion of fraudulent transactions, it is because number of card transactions increases significantly from year to year and, with it, fees and commissions collected by banking institutions. Undoubtedly most of exchanges that offer payment cards their customers realized financial windfalls What are these costs?
Again, everyone will have to do one election in his soul and conscience between safety and comfort of use.
With blockchain, you can pay anyone, in the currency you want, without having to provide a third party (like Paypal, which now gets the right to fine its customers), all the information needed to debit your account.
Yes, this sounds basic, however it is an extremely essential improvement when it comes to securing payments.
Between old means of payment and new technologies, the choice seems clear.
However, it would be a waste to bury our cards and checkbooks right away. Blockchain is still too new and too complex to truly understand and integrate into all payment operations. But those who are interested in it now will have an advantage in understanding the world of tomorrow.
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