I have to admit, I’m perplexed about something….. why aren’t Chip and PIN cards catching on here in the USA? A few things have given me hope in the last year or so.
- Chase indicated they were finally going to move to Chip & PIN
- There were lots of fun-filled data breaches at major retailers (Target, Home Depot)
- Barclays came up with a half measure, Chip & Signature default but Chip & PIN “capable” with the Barclay Card Arrival Plus
- In October 2015, the liability for fraudulent purchases shifts from the banks/card companies to the merchants IF they do not have the capability in place to accept chip cards
Then, the reality of a Wall Street Journal article published today sat in – “Why New Cards May Fall Short on Fraud Control” (subscription required). This snippet from the article stood out most. “J.P. Morgan Chase, the nation’s biggest card issuer, had initially planned to issue chip-and-PIN credit cards in 2014, but the bank put those plans on hold after testing them with consumers, according to a person familiar with the bank’s strategy. The bank has issued millions of chip-and-signature cards.”
Chip and PIN is the standard in most of the world at this point, and not surprisingly, most of the world’s credit card fraud has shifted to the USA as we sit around and wait. I suppose I shouldn’t be surprised in a country where so comparatively few people possess passports as a percentage of the population and therefore aren’t exposed to Chip & PIN card usage in other countries, but I have to admit…..I’m disappointed. (Image courtesy of Shutterstock.com)
It isn’t lost on me that a massive investment in charging infrastructure is required to make the shift to Chip & PIN, but I really thought that by now, most of the banks and a solid cadre of consumers would be on board. I suppose I have no better example of the shift in perceptions required to move Chip & PIN forward than this. There’s a Wal-Mart I’ve shopped at in the past that literally will not accept a swipe from a card that has an EMV chip embedded. Over the holiday, I visited a small Wal-Mart in a place that shall remain nameless, and just plopped my chip card into the chip reader out of habit. The cashier looked at me like I had eight heads. After staring at it for a few moments with nothing happening, I just removed the card and swiped it. The transaction processed in seconds. We have a long way to go between now and October.
-MJ, January 5, 2014
[…] Why Aren’t Chip & PIN Cards Catching on in the USA? […]
Not everyone seems to get it, but Jay’s right: the issue is the automatic kiosk thing at places such as train stations, gas stations, toll plazas and parking garages. Flyer Talk has a Wiki on that topic that’ll make your head spin.
Still, my experience recently in France is that chip-and-signature cards will sometimes work in some kiosks so long as — and this is the key part — you pray really, really hard before inserting your card. And even then you might be out of luck at CDG.
I’ve read somewhere (can’t find a reference now) that the US is going to Chip and Signature for what Ryan mentioned (not wanting to memorize another pin) and also not wanting to re-train people on how to use their cards (e.g. dip if there’s a chip, swipe if not). Both contribute to people using a different card (or card abandonment). As fraud isn’t as high here it’s not as big of a concern for US issuers.
That said it’s still difficult to get a chip-and-pin card for EU travel (e.g. automated kiosks).
I tried to use my chip at both a bagel shop in NYC and a Nordstrom Rack who had chip-enabled POS card readers. In both instances, the merchants told me that chip-based payment functions were not enabled and I was forced to swipe.
Why have the reader if you’re not going to use it?
Aaaawwwww…. I can’t believe she looked at you like you had 8 heads.
….maybe 7 but definitely not 8!
I have noticed brand new POS terminals at Walmart as well, but no demand to use the chip reader with chip cards. Sam’s also now has chip reader POS terminals and does not allow you to swipe chip cards. Sadly, no PIN requirements yet, default is chip and signature.
I think the way it works now is that once Apple says it will offer a chip and pin card then it will become a innovation and game changer which must be had by all.
The criminality starts with the bankers who launder money for offshore holding companies and drug lords. They look the other way on Bernie Madoff until he gets caught. Then pay a measly penalty for billions and trillions of their fraud. Remember the days when we sent crooked bankers to jail? I do, it was the S&L scandal.
So who cares about apple stealers?
On my way to work this morning, an interesting listen on talk radio regarding the chip-and-pin cards. The news snippet cited the reason that in testing, credit card issuers discovered Americans didn’t want to memorize yet another PIN. They saw it as too big of a barrier. If you have a regular card in the your wallet next to a chip-and-pin, if you struggle to remember the PIN you’ll just simply grab the regular card instead. The reasoning made sense to me. As I thought about it more too….I’d be in big big trouble if I had to memorize PINs… Read more »
The author seems confused.
Chip and pin is a form of communism pure and simple.
It’s like potholes in the roads. Don’t waste OUR money filling them in you red swine. We’re better dead than red.
What do you expect from 300 million people who think that freedom to shoot each other with a gun is far more urgent than roads without holes and secure credit.
Remember this is american consumer capitalism at it’s best:
“It doesn’t matter if it’s shit, so long as it’s cheap shit”.
1. Chip and PIN cards are not much, if any, safer than a signature card.
2. The liability shifts from the bank to the cardholder. I prefer leaving liability for fraud with the bank.
Language from usa.visa.com. “Visa intends to institute a liability shift in the U.S. for domestic and cross-border counterfeit transactions effective 1 October 2015. Visa’s global POS counterfeit liability shift policies are designed to encourage EMV chip card issuance and acceptance in participating geographical regions, effectively creating a more secure environment for transactions within and between each participating Visa region. Note: The liability shift encourages chip transactions because any chip-on-chip transaction (i.e., a chip card read by a chip terminal) provides dynamic authentication data, which helps to better protect all parties. With this type of liability shift, the party that is… Read more »
Under an executive order last year, all US Federal agency credit cards (travel credit cards, fleet cards, and agency purchase cards held by Fed employees for official use) must be converted to Chip and PIN by 2016. This will ultimately encompass upwards of 4 million cards. Hopefully this will be a help in pushing things along.
Over the weekend, I started received chip replacement cards for all of my American Express cards.
I would love to have a card that used chip & PIN. Sadly, my credit cards do not even offer this as an option, which I find pathetic.
Chip & signature is a joke.
I was shopping at a brand new Dick’s Sporting Goods just outside of San Francisco with a chip reader-equipped terminal and of course I ended up having to swipe afterward. The cashier mentioned that he worked in downtown SF before and was familiar with European customers with chip cards. The only places I’ve been to that use the chip reader are the city owned parking garages. The cashiers there seem to be very familiar with chip cards.
That’s very nice to read about. I live in Brazil, but visit the US regularly and every single time I buy anything using a credit card there, I get surprised that you still have very poor safety about credit card use. In Brazil (a much less developed country), it’s been at least 3 years I don’t see a card being swiped, unless as a key to a hotel room.