The chip and pin dilemma

Credit cards, not a PIN in sightChip and PIN, a security feature used on all European credit cards, as well as Mexico, Brazil, and Japan, continue to cause trouble for American travelers. No, not the chip and pin itself, but the lack of this technology on U.S. credit cards.

As credit cards have been rolled out as the default payment method anywhere from grocery stores to automated kiosks, and carrying a credit card is safer than a roll of cash, travelers have become used to relying on their cards rather than the local bureau de change. But this convenience is limited for American travelers, as many of those automatic transactions now require the card to be Chip and PIN enabled.

This makes buying train tickets, filling up on gas, paying for parking, or even buying a snack a more involved process than necessary. There are even some ATMs that require Chip and PIN now, which must be a very negative experience when arriving late in a country and without any local currency.

Besides automated vending, the mag stripe only credit cards that American travelers carry are sometimes refused in convenience stores or even restaurants. Most times, this is down to the vendor's ignorance that using the magnetic stripe in the terminal will work, or some mis-conceptions about fraud liability. A frequent reason cited in the U.K. is that "the vendor will be liable for any fraudulent transactions" carried out without a Chip and PIN enabled card.

In these instances, ask the person to swipe the card anyway, as it will work 9 times out of 10. If you're straight-out refused, feel perfectly comfortable in taking your business elsewhere.



There are 2 options to get around the problem:

The first is to carry cash around, but because of the security risks that can be involved, I'd not recommend having much in bills and coins.

Second is an upcoming product from Travelex, who offer a pre-loaded Chip and PIN card for American travelers, which can hold up to about $9,000 in local currency such as British Pounds or Euros. Unfortunately, this product isn't even launched yet...

So cash it is, for now. And send a letter to your bank complaining about having trouble using their credit card when abroad.

Photo credit: Andres Rueda

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Comments are closed


Ordered newest to oldest.

Very good to see that Chip & PIN looks to be on the way then. You bring up some useful background as to why the U.S. banks dragged their feet.

Jack on 28 October, 2011

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 (, 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.

J.G. on 27 October, 2011

Well, if American banks could finally get their systems updated to Chip and PIN credit cards, the problem would go away. However, as there's no real movement towards the more modern system, it'll be a long time yet...

So carry cash for travels!

Jack on 30 July, 2010

are there really only two options: cash or travelex. i cannot believe that...


Christian H. Leeb on 27 July, 2010



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