What are cards and checks worth compared to the blockchain?- With the scarcity of cashwe are more and more numerous to pay for the majority of our purchases using Bank cards or by transfers while checks are still widely used by part of the population.
Risks of rejection of operations VS immutability of the blockchain
Few are those who are familiar with the intricacies of interbank procedures related to the execution of card and check payments. And if this is not your case, I can assure you that you are not doing any worse for it.
Checks and their risks – a means of payment that should remain on the bench
Let’s start this match by leaving the service to the minitel means of payment : the checks.
The check is a means of payment that some merchants still particularly like, as well as bank customers who have not grown up with the Internet. Unfortunately for all of us, each of us may have to use the check in certain situations (deposit check, vacation reservation, etc.). Even the government uses checks to distribute certain aid…
The fact that checks are free plays in their favour, whereas it is certainly the method of payment less secure who exist. Why ?
Firstly, when you deposit a check in your account, the bank advances you the amount before really ensuring the actual cashing of the check, which can still be rejected by the issuer’s bank.
And, if the check proves to be tainted with an irregularity after a routine check or hit by an opposition formed by the issuer, your bank will then redebit your account the amount you thought you had collected.
This can easily result in an unauthorized overdraft if you had used the funds as a result of crediting your account.
To better understand the problem, it is necessary to be aware that the number of checks issued each year in France (more than one billion) makes it impossible to control each title. What facilitates fraud on checks for small amounts on which, logically, banks do not focus the majority of their checks.
Let us now place ourselves on the other side of the spectrum, and agree that a payment made in cryptocurrencies is unlikely to be canceled except in very exceptional circumstances. Once the transaction is validated and confirmed, adding the following blocks to the chain makes the immutable transaction and it is almost impossible to go back on it.
The security of all payments made via the blockchain is increased.
Coming back to checks, a complete book of which would not be enough to list all the risks.
Car the checks can be issued in white or used by anyone has access to your check book, which obviously constitutes a significant risk if the bank does not systematically check the regularity of your signature.
A problem that is very opportunely solved by the use of the blockchain and the private keys that each user must keep preciously.
A fortiori, no more risk either with the blockchain of issuing an NSF payment, which can be just as tempting as it is disastrous when you can write a check for any amount (hello banking ban) .
With cryptos, you can’t send money you don’t havepoint final.
And we are not even talking here about the high risks of check diversion, which certain criminal organizations have made a specialty of.
In particular concerning the sending of checks to the taxes. Easily identifiable operation, and conducive to fraudulent maneuvers. Reason for the United Arab Emirates quickly looked into a system combining the practicality of the check and the security of the blockchain.
Because if a third party diverts the check and manages to fool the bank (which, as mentioned above, does not check all the checks), it is impossible, except to be revived by the initial beneficiary, to realize the diversion. Your account has been successfully debited.
Then engages a often long struggle with the bank to try to recover your funds even though you did not make a mistake… Did you say absurd?
Card payments, not a panacea
Payments by check are not the only ones concerned. A card payment can also be rejected.
You will be graced here with the 300 pages of General Conditions of Mastercard or Visa concerning payments made in France with foreign cards. Operations that often place the trader in a weak position.
Thus, a foreign customer can ask his bank to reject a payment made in France for various reasons which are sometimes difficult to answer. This possibility is source of risk and insecurity for traders. This is also the case when a vicious villain uses a stolen card.
If the 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 cancel a transaction made by mistake on the Bitcoin network.
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SEPA direct debits – the direct debit that does not always require your consent
To better understand the danger 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 the banks) can debit your bank account by simply providing your IBAN to his bank, which will not ask his client for the signed direct debit mandate because, as she does not know the signatory (you), she just can’t not verify the authenticity to sign.
And that’s how many people find themselves withdrawn under insurance or forgotten telephone plans or, worse, never subscribed, either by mistake of the creditor or his bank, or by malice (company created with the aim of taking the maximum possible accounts).
If you don’t follow your accounts carefully (which can happen when you have the prudence to have several banks), it is possible that these small withdrawals go unnoticed.
Oh, the regulations allow you to challenge thembut only within 13 months (article L.133-24 of the Monetary and Financial Code) following the debit date… afterwards, too bad for you.
Let’s go back to our dear blockchain and our “wallets”. These latter work on a simple principle. Your signature must come to approve all operations which pass or will pass through your account. When using a decentralized finance 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 this 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 which play on the fact that most people do not actually understand what they are signing on the blockchain, a point which has yet to be be improved to promote adoption.
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Bank cards – trust, but who?
Have you ever been seized with a doubt when calmly filling in all the information on your card when making an online purchase?
Have you ever thought that you were giving the keys to the kingdom and authorizing unknown and more or less serious companies to debit your account?
So of course, payments on the internet are more and more secure, and sites are now massively integrating strong authentication.
That said, providing all of this information means trusting a third party to avoid having you fleeced because anyone with this information can use your card on less demanding sites than the average.
If the banks agree to bear part of the fraudulent transactions, it is because the number of card transactions increases significantly from year to year and, with it, fees and commissions collected by banking institutions. There is no doubt that most exchanges that offer payment cards to their customers have noticed the financial windfall What are these costs.
Again, everyone will have to make a choice in his soul and conscience between safety and convenience of use.
With the blockchain, you can pay anyone, in the currency you want, without having to provide a third party (like Paypal, which now assumes the right to fine its own customers), all the information to debit your account.
Yes, that sounds basic, yet it’s a terribly substantial improvement when it comes to securing payments.
Between aging means of payment and new technologies, the choice seems obvious.
However, it would be futile to immediately bury our cards and our checkbooks. The blockchain is still too young and too complex to be truly understood and integrated 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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