Traveling
abroad with credit card? You better bring cash
American travelers prepping for their late
summer (or increasingly common September) trip to Europe might consider the
above items as standard for their pre-departure list. But there's something
that they may not have packed, and that item has become quickly the norm as the
worldwide trend towards cashless consumer purchases continues to rise.
When it comes to the debatable necessity of
smart cards, some travelers
heading overseas are receiving mixed messages from their banks. To ensure that
his magnetic swipe credit card would work abroad, Daniel Hayes, an English
teacher from Fort Myers, Florida, called Chase Bank before his summer trip to
Europe.
"They said I could use the credit card
anywhere, or at least in 99 percent of places—there was no mention of chip and
PIN," Hayes said as he strolled along a shaded canal in Amsterdam's
tourist-packed Red Light District. Yet Hayes and his friend, David Thorpe of
Cape Canaveral, reported that their ability to use their credit cards while
traveling cross the European continent had been inconsistent at best.
Anyone heading abroad will likely notice that
smart chip cards are quickly becoming the worldwide standard. According to the
Smart Card Alliance, 99.9 percent of European terminals are chip-enabled. The
United States significantly lags behind other continents on EMV technology,
too: more than 86 percent of terminals in Africa and the Middle East are
chip-enabled. In Canada, Latin America and the Caribbean, that number is nearly
85 percent.
The phrase "chip and PIN" may draw a
blank for American consumers long accustomed to the traditional "swipe and
sign" credit cards, in which account information is contained on a
magnetic strip on the back of the card. Chip and PIN cards take advantage of
EMV "smart chip" technology: data is embedded within a chip, and
transactions are verified through a PIN, or Personal Identification Number.
Because encrypted chips are hard to counterfeit, smart cards enabled with chip
and PIN offer superior security to magnetic strip cards.
Contrary to appearances, American financial
institutions have long been aware of the merits of EMV technology. After all,
JPMorgan Chase originally developed it. One reason U.S. banks have been slow to
launch smart chip cards is their expense: EMV technology remains a pricier
option than the status quo of magnetic strip cards.
That's despite an upswing in well-publicized
credit card fraud crises that have recently swept the news, including Target's
notorious December 2013 security breach. In Target's case, the payment
information of more than 40,000 cardholders was compromised when it was
"skimmed" from the magnetic stripes on the back of the cards, leaving
some experts to question whether EMV technology might have prevented such a
debilitating assault on a secure customer data.
No chip?
No burger and chips
One country that has fully embraced the Chip and
PIN system is the Netherlands. While local businesses tend to take cash, they
are less likely to welcome traditional magnetic stripe credit cards. For the
Dutch, PIN-enabled cards are such a part of life that a relatively new verb has
firmly entered the lexicon: "pinnen" means to pay by PIN-enabled
card.
On a Thursday evening in Amsterdam this summer,
customers ordered exotic-sounding pumpkin and beef burgers at the Jordaan
neighborhood's popular burger joint De Burgermeester. Most paid with chip and
PIN cards; a few paid with cash. Sorry, the cashier apologized in perfect
English, no "American cards" taken. In the same neighborhood, De
Pizzabakkers, a popular local pizza chain, declined to take cash at all:
waiters circulated with hand-held portable electronic card readers. At the end
of their meals, diners paid table-side by inserting—not swiping—their cards and
entering a PIN. Tourists desiring to leave a tip at either Amsterdam
establishment must still bring cash—the card readers aren't set up to add tips.
Where should travelers headed across the
Atlantic expect to find chip-and-PIN cards required, yet without an alternative
to pay with cash?
Automated points of sale remain the most likely
culprits: think ticket machines at parking lots, rental kiosks, and public
transportation hubs such as subway, train and bus stations. In Amsterdam's
bustling Centraal Station, for example, this forlorn sight is familiar: the
tourist struggling to buy train tickets from an automated ticket machine. While
fluent English-speaking agents offer assistance at the ticket counter, many
frustrated travelers end up heading to the ATM to withdraw cash before
returning to wait in line: the ticket counters accept cash, but not magnetic
stripe cards. Continue reading...
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