It’s A Good Idea, Why Don’t We Do That?

Chip and PIN technology in credit and bank cards is coming to the United States slowly but surely. While it won't completely eliminate credit card fraud, it is much more secure than existing magnetic stripe technology.

Chip and PIN technology for credit cards is coming to the United States slowly but surely. While it won’t completely eliminate fraud, it is much more secure than existing magnetic stripe technology. (picture credit UniBul)

It’s A Good Idea–Why Don’t We Do That?

As someone who travels frequently on business, oftentimes out of the country, I’ve run across different methods of doing things that make me wonder, “Why Don’t We Do That?” back in the United States.  One prime example is the use of chip and PIN (personal identification numbers) credit card technology found all over Europe and the rest of the world.

According to travel expert Rick Steves,  “Today, outside the US, the majority of all cards are chip cards. These “smartcards” come with an embedded security chip (in addition to the magnetic stripe found on American-style cards). To make a purchase with a chip-and-PIN card, the cardholder inserts the card into a slot in the payment machine, then enters a PIN (like using a debit card in the US) while the card stays in the slot. The chip inside the card authorizes the transaction; the cardholder doesn’t sign a receipt.”

If you happen to be traveling and your American-bank-issued credit card is rejected by a chip-based system, you can ask the proprietor to swipe or manually enter your card. But there are some places that simply can’t accommodate a chipless card, forcing you to pay cash. Steves (@ricksteves) also mentions that U.S. banks are reportedly going to require “smartcards” with chip technology by the end of 2015. However it is possible to ask your bank or credit card company for one now if you will be traveling to Europe or elsewhere. In addition to enhanced fraud prevention, chip technology makes everything easier on everyone using the system. Another neat aspect of the “smartcards” is that when you are in a restaurant the machine is brought to your table for processing. Your card never leaves your sight, which is another safety and fraud prevention benefit. Yes it will cost money to switch everyone over to “smartcard” technology but surely the security benefits will eventually outweigh the costs. As a Forbes Magazine article  (@Forbes)made clear in early 2014,  it seems crazy that the United States is one of the last countries to convert to a chip-based payment infrastructure. What do you think? Are there other “good ideas” you’ve seen that should be embraced sooner rather than later?  

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