UNFCU to launch first U.S. chip-and-PIN credit card

Longtime readers know that I travel often and have encountered many issues with credit cards and problems with money abroad. Most European countries now use chip-and-PIN credit cards, which involve an extra layer of security. They are processed differently and use different card readers.

While many institutions in Europe are still set up to accept payments from both old-school magnetic swipe cards and new chip-and-PIN cards, some don't. For example, two summers ago in Paris, I found that their automated subway ticket machines only accept euro coins or chip-and-PIN credit cards. Additionally, after spending a week in London in February, I found that Europeans don't trust swipe cards very much anymore; if you use them, you come under scrutiny. Everywhere I went, merchants kept asking me to sign receipts until it came close enough to matching the one on the back of the card.

When CreditCards.com learned that United Nations Federal Credit Union will soon be the first U.S. financial institution to issue a chip-and-PIN card, it was interested -- and I was ecstatic! UNFCU has told us that they will launch the card, which is compliant with Europe's EMV credit card standards, toward the end of 2010.

I wanted to learn more about this major development, so I contacted Elisabeth Philippe, Business Development/PR Manager for UNFCU. She answered several questions for me via e-mail.

CreditCards.com: Why has UNFCU decided to create a chip-and-PIN card?

Elisabeth Philippe: We saw a need to deliver a more convenient and secure payment option that our members and clients can use any time and anywhere they live or travel.

Approximately, 60 percent of UNFCU's members, who are the active and retired staff of the United Nations and its Specialized Agencies and their families, reside outside of the United States. Moreover, UNFCU members regularly leave the U.S. for deployments in other countries.

CCDC: What will the benefits be for consumers?

EP: The new EMV card provides greater payment card acceptance globally for UNFCU's members, who are perhaps some the most mobile in the world. Issuing these members a chip-and-PIN card is therefore a tremendous benefit. Many had started to experience difficulties with their mag-stripe-only cards when working or living outside of the United States.

While important for the global traveler, the new EMV card also brings a higher level of payment security to the domestic cardholder, which extends beyond mag-stripe technology.  
 
CCDC: Do you think chip-and-PIN will become the norm in the United States?

EP: UNFCU advocates a complete roll-out of this technology throughout the United States. Indications are that certain very large chain merchants in this country are making plans to implement chip-and-PIN readers.

CCDC: Do you have any additional comments on the new card?

EP: All UNFCU platinum cardholders will receive the EMV card, and other segments will have the option to upgrade. The program is anticipated to be implemented during the third quarter 2010.

Thanks to Elisabeth for taking the time to answer my questions. I can't wait until chip-and-PIN becomes the norm in the United States!