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Emily Starbuck Crone

Americans need chip-and-PIN cards for overseas travel

Nearly two years ago, I blogged on this site about some of the financial challenges I faced while on a two-week trip in Europe. Other than pay toilets and the large minimum amount required to use a credit card, an issue I frequently encountered in France was the lack of acceptance of American credit cards on the metro ticket machines.

Americans need chip-and-PIN cards for overseas travel Chip-and-PIN cards, which are popular in Europe, hold a very special place in Emily's heart.
If you wanted to buy a bus, subway or train ticket from one of the automated machines, you had to use either euros or a chip-and-PIN credit card, which are standard in Europe. You could use an American card if there was an attendant at a booth, but there often wasn't one present.

Chip-and-PIN credit cards feature an additional layer of security. They work differently from the traditional magnetic swipe cards; rather than being swiped, they are inserted into a reader and the user enters a PIN number, much like they would for a debit card. They are so widespread in Europe that, if you use an old-school swipe card there, they heavily scrutinize you.

Although chip-and-PIN cards have been the norm in Europe for some time, no issuers in the United States made this type of card, until recently. We wrote about the launch of the first American one, issued by the United Nations Federal Credit Union, but there's no word about when one will be available to the general public. This makes traveling to Europe with plastic a frustrating endeavor for Americans.

Jim Bruene, publisher and founder of NetBanker, a finance and banking blog, wrote a recent  post about this very topic. He discussed the modern Velib bike-sharing program in Paris, which allows anyone to rent a bike through automated, unmanned kiosks throughout the city. You can subscribe to the service for 5 euros a week or 29 euros annually, and that gives you the first 30 minutes of any ride free. You're charged hourly after that. The catch? They only accept credit cards and debit cards, and you guessed it -- they only take chip-and-PIN style cards.

Bruene spent a week in Paris last summer and really wanted to use these bikes, but wasn't able to because the style of card he had. He observed many tourists try and fail, not understanding what the problem was. (Jim later found out that all American Express cards do work with these machines, but it was too late.)

In his post, Bruene argues that financial institutions are missing an opportunity to "pick up market share among well-heeled international travelers." He suggests the creation of a prepaid chip-and-PIN card that would be much like the modern day travelers' check, and it could be distributed online for widespread use. I completely agree -- that would be such an asset to American travelers going abroad.

Bruene also mentions that Canada is in the process of converting to chip-and-PIN cards, so I hope American issuers are gearing up! If not, we may find ourselves only able to pay with cash overseas.

What do you think? When will America convert to chip-and-PIN cards? What should we do until then?

16 Comment(s)

Emma S said:

As a firm believer in the Chip and PIN system we have over here in the UK, I think that the sooner the same technology is implemented in the US, the better.

UK consumers are at higher risk of their card being used fraudulently if they lose it or if it's stolen while in the US because the card can be swiped and the signature forged.

Don't get me wrong, the Chip and PIN system is not without its flaws but it is much safer than the old one.

However, I don't think America will convert because it's probably cheaper for card companies to cover the cost of fraudulent use than it is to replace all their issued credit cards.


Edward said:

I had huge problems traveling to Romania with American credit cards. At first I thought it was just me, but the people I met from Canada who did not have chip-and-pin and an Australian had similar problems. There really needs to be a way to get a chip-and-PIN card for Americans. A pre-pay situation would work fine - if it were available. Unfortunately all my research has pretty much found that it is not. Too bad. Whatever credit card company/bank offers these first in the USA will get my business (barring any absorbent fees). I don't travel to other parts of the world much, but I do enough that not having this technology is a problem.

BTW: In some places of Europe, you will need a PIN even with a mag-stripe card (that apparently is different from the cash advanced PIN), so for any readers that may be traveling, soon, I'd recommend contacting your credit card company in advanced before any overseas travel to see if you can get one.


SIR ANTONY JACOBS said:

TRAVEL TO EUROPE 2010

I am in Paris France today waiting for my flight back to the good old USA. I am a Brit by birth and a USA citizen by choice. I am retired and I decided to take a long break to Europe to celebrate my retirement.With my wife

We book Business Class on Delta and our trip out was not all it should have been. Weather delays and Lost luggage.

We arrived in Paris at CDG with a car booked for 3 months and all sorts of plans.
Our biggest problem was credit cards, at one stage we were wiped out of Euros because our credit cards do not have chip and pins on them. It got so bad on the freeways we would offer 2 or 3 cards, none were any use. We were down to our last 3 liters of gas(3/4 Gall)

I had a reserve 50Euro note and needed it twice over. I explained in the gas station in French that these cards are America and if you swipe them in another older credit card machine, it would work, this associate saw my plight and swiped it, thank god it worked. We still had to contend with the freeway tolls.

The first toll we arrived at some 180 kilometers south of Paris and 260 Kilometers north of Bordeaux the bill was just over 30.00 Euros, I gave my American Express Delta card, it was declined, I gave my Holiday Inn Visa card it was declined. The tollbooth attendant refuse to swipe any more cards or Swipe through the swipe bar so clearly visible, he just wanted cash. Out came my emergency 50.00 Euro bill.

We now travel to Paris and we again had to pay another toll this was 21.00 Euros, Yes you guessed right we were short, well in another bag I had some coins. We got to Paris with a few Euros less that 4 and no cards that worked and could not buy any food, luck would have it we had paid our hotel in advance and have eaten and drunk only what they offered. To be honest this Holiday Inn is very good.

I and my wife found a bank, yes a bank that took our cards and we are now fine for cash.

When will our banks offer us this service, what made us crazy some places swiped the cards and would work, some freeways would work and most cash stations worked.

Warning!! Keep a 50.00 Euro note or morefor an Emergency; you are more than likely to need it.


Kevin F said:

Having the same problem traveling to the UK from the USA.

The automatic machines for buying tube tickets in London do not accept non Chip and PIN cards. So you either queue up (the tube station at Paddington where the Heathrow Express stops has particularly long queues at the wrong time of day) to pay manually or if there is no attendant on duty or you do not have the cash - you walk!

Also an increasing number of smaller shops or places away from the tourist areas are very suspicious of non chip and PIN cards or do not know how to deal with them. The one reason I use my Amex card is because of its wide availability internationally, but in Europe its rapidly becoming a joke. Amex need to wake up and do something. Maybe I should get a UK based Amex card - they do support Chip and PIN! Crazy.


Bob said:

We still have generally been able to use our American credit cards at most locations in France, with a few notable exceptions: non-attended gas pumps, automatic ticket machines at train stations, and toll machines. Plus bike rental machines in Lyon. But now, Travelex has just launched a prepaid chip and pin card in either euros or pounds. Definitely a great idea. The rate may be slightly higher than if you simply used your credit card, but it is probably worth getting. On our last trip I noticed that more and more gas pumps are non-attended.


s said:

To make a reverse point - it's hard to pay for petrol/gas at a US pump with a credit card: they want me to enter my ZIP code to confirm the card, and of course, not living in the US, I don't have a ZIP code. Sigh. So the sooner we have a common system (Chip & PIN seems good to me) the better.


Eric said:

To not provide chip & pin cards for travelers to Europe, when they knew that this was coming for years, is just another example of how the US banking industry fails its customers.


Randy said:

For those that might stumble across this older thread, note that TravelEx offers a prepaid "cash passport" chip & PIN Mastercard. I do not work for TravelEx, but have a trip planned to Europe next month, and am aware of the issues I might face at gas pumps and tolls. Hopefully this will work. And yes, USA card issuers have to provide this technology for travelers!


Dan Hendry said:

Just got back from a three week trip to Austria, Switzerland, Italy and Germany. Every bank, gas station, restaurant, hotel, parking machine and shop was able to take our American credit cards and atm cards. Not once did we have a problem. Took a TravelEx pin and chip card that was rejected several times at banks, The exchange rate wasn't that great. Thought the pin and chip discussion is just a lot of hype!!!


allie said:

I am a Canadian now residing in the USA. I recently returned from a vacation to Canada. I have a Canadian Visa with chip & Pin, which I used everywhere I went. I was surprised that even small stores and pizza delivery drivers carried these chip & pin credit card units; yet, this technology is not available with our USA credit cards.


J.G. said:

The reason it is taking so long for EMV cards to come to the U.S. is that credit card companies have been willing to tolerate mag-stripe related losses. Switching to EMV would cost U.S. issuers about $3 billion, according to one estimate, and merchants would have to pay not much less to upgrade their point-of-sale equipment.

Now that Visa has made it mandatory for all U.S. processors to support acceptance of chip-based transactions by April, 2013 (http://blog.unibulmerchantservices.com/nfc-ascent-pushes-visa-to-speed-up-adoption-of-smart-credit-cards), the dynamics have changed completely. The banks have no option but to build the infrastructure, so once that's done, they might as well start using it. After all, if the U.K. chip-and-PIN experience is anything to go by, switching to it would result in hundreds of millions of dollars in savings from lower fraud losses. U.S. banks would certainly take the windfall if it comes their way.


Phil said:

Returning from the Low Countries, I was fortunate that ABN AMRO ATMs accepted magnetic stripes cards. But for how long more? A one day trip to Brussels Belgium confirmed that magnetic stripes is a bygone technology to put along with your cassette recorder. Problem is the patent on the chip was French and the US finance industry delayed its adoption doing limited tests for its upper crust clientele. No retail in Belgium or the Netherlands would take the stripe as all use daily and securely the chip for millions of daily transactions. The United Nations has the chip card. A suggestion, far from banishing it why not make each of us a world citizen and give us United Nations status hence we can apply for a UNFCU chip card to gain a few pounds buying these Belgium chocolates or loosing them on those beautiful Dutch bikes...


Michael said:

I don't understand your next to last paragraph. Canada is part of "America". I guess you meant the "United States"????


Farooq Latif said:

This is my third time to the USA.However, I do feel chip and pin is the best solution.But unfortunately ATMs cannot retain your card like in the uk.America will soon follow up when banks issue chip and pin cards.Chip and pin last longer and wear out less.


Joy said:

I am a US citizen and will be opening a Canadian bank account to access a chip card while traveling in Europe. Luckily I live less than 2 hours from Vancouver Canada so it is a small inconvenience. I do wonder at the odd absence of smart cards for US citizens. I just want to be able to spend money overseas without hitting walls using a magnetic strip card. I'm sure there is a simpler solution. But for now a foreign country can handle my funds.


Philip said:

US banking system is at least 10 years behind Europe and this is just another example. Swipe cards can be used in most places in Europe, although you usually have to tell the payee that they need to swipe the card. I have had some awkward people refuse to take my card and one nightmare experience stuck in Holland with no way to pay a restaurant bill when my bank conveniently decided to block my ATM card at the same time so I had no cash either. My bank has told me several times that they are trialing chip & pin cards and would get me one but they never have.


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