percysmith

I've been discussing w/ my visitor about them too. We have Paywave and Paypass here for a couple of years, but they're no match for Octopus in terms of acceptance and convenience of use.

However since there isn't Octopus/Oyster in Syd, he said Paywave's getting quite popular. I don't like having to wait a receipt for a bottle of water tho.

1 Jan 2013's the changeover date right?

My parents will probably go back to cash rather than learn their PIN.

GRALISTAIR

Every time I gome home to England, I forget they are all Chip and Pin there. Is this going to be standard all over the world soon?

STS-134

What is wrong with the US on this issue? I think the US should be leading the world in technology (especially since the US is the home of Silicon Valley and of Visa, Mastercard, and AMEX headquarters). Why are we lagging instead?

Redhead

It already is. The US is the oly major market without chip

kebosabi

You should start visiting other countries other than the US or the UK. Both of our neighbors also use Chip-and-PIN now. Many Canadian gas pumps are being converted to take only chip cards and require mag-stripe cardholders (Americans) to go inside and do it manually with the gas station attendant.

The same reason why everybody else uses the metric system. We like to be different.

Jokes aside, it's has to do with cost and the chicken-or-the-egg issue. Banks don't want to issue them because it costs more money to make them and they see no point in it because no merchants in the US uses them. From the merchants' perspective, they see no point in spending the extra money to upgrade their terminals if no issuer issues such cards.

Of course, these excuses can easily be rebuttal by the fact that the US issuers can just issue hybrid cards on a per-request basis which has both the EMV chip and the magnetic stripe as the rest of the world has been doing. Why wait for the merchants to change when they can just issue one single card that retains the mag-stripe for the US use and the EMV chip for foreign use?

This is why British, German, Canadian, and Japanese cardholders have no problem using their cards over here because even though they've migrated to EMV, their cards still are backwards compatible by retaining the mag-stripe along with the EMV chip and some even incorporate the contactless feature into one single card. If a British VISA cardholder visits New York, they have no problems using their cards over here or in the UK because their cards still retain the mag-stripe along with the EMV chip.

Our cards OTOH, only has the magnetic stripe so it only works by swiping and signing. Hence when an American VISA cardholder visits London, we get shafted because our cards only have the mag-stripe. It works fine in the US, but once we step outside our borders, we face problems.


And the excuse from the merchants perspective is also easily rebuttaled by the fact that those terminals have an end-of-life; a machine will have to be eventually replaced anyway. Makers of terminals are making all-in-one POS terminals that can handle magnetic stripe, EMV chip and the contactless. When the old terminals have to be replaced, the newest terminals will already have terminals that handle processing in three ways. From the POS makers perspective, it won't make sense to make a terminal one for America, and another one for the rest of the world, it's cheaper for them to just make one terminal that can be used all over the world.

ajnz

The rhetoric in this thread is amusing.

I travel to Europe fairly regularly with a variety of credit cards from different issuers and issuing nations. It's only recently (within the last two years) that all of my non-US banks have got around to issuing EMV cards. In the past two years I've still had no issue with European merchants accepting magstripe based cards, with the exception of two places: Netherlands train kiosks and Vienna metro kiosks, the latter of which have changed to only accept EMV since some time in May. Everywhere else has managed with the magstrip cards just fine.

What used to amuse me was using a chip+signature card in the UK which thoroughly confused people; or when I attempted to use chip+signature in New Zealand prior to chip card rollouts there (which is still not fully complete, and many merchants are disliking the slow processing of the chip cards).

The Sydney airport train kiosks can read magstripe cards since they can read non-chip enabled Australian EFTPOS cards just fine. I suspect the PIN they want is the common PIN for credit cards used in Australia and New Zealand, something that Australia only embraced circa 2007-2008 vs. New Zealand -- and certainly the kiosks worked fine for me in March with mag-stripe cards.

cbn42

You don't consider China, India and Australia to be major markets then?

cbn42

I don't think it's rocket science, even if you have never done (or seen) it before. If you have a machine with a magnetic stripe reader, and the card has a magnetic stripe, anyone with basic intelligence should be able to figure out how to swipe it. Most readers have a diagram showing how to orient the card, and an arrow showing which way to move it.

In Australia, they don't use checks because bank websites have a function that enables you to send money directly to anyone's account (at any bank in the country). Americans have never seen anything like this before, and yet I was able to do it with no trouble, just by using my common sense. I am not in the banking/finance field.

My feeling is that merchants in the UK don't want to process swipe and sign transactions because they are concerned about fraud, and so claiming they cannot do it is a convenient excuse.

kebosabi

Sure that's fine because you're not restricted with time or are annoying other people while you're doing it.

Cashiers are different. Minimum wage earning cashiers are given a goal to process as many people as quickly as possible and to attend to other matters like the next person in line or fill up the other person's beer or whatever.

Once given a card they have never seen before, it's easier for them to say "sorry we don't take these, please pay in cash" rather than taking the time to try to figure out how to do it. In their eyes, the 1% American with the mag-stripe is an anomaly that isn't worth their time to figure it out. Again it comes down to "you're not our major client so sucks to be you, please pay in cash and welcome to ______."


Again, it comes down to generation gap. Older generation Australian grandmas and grandpas are less likely to have computers and would less likely to even understand the web thing so they still cling to use cheques. "They don't use checks" is a point-of-view from your standpoint only. I'm sure a lot of Australians these days don't use checks anymore, more so like less and less Americans writes checks these days either due to online banking (and yes, we do have a system of depositing money directly into another person's bank account). But the same minority rule still applies in both the US and Australia, "they don't use checks" is not 100%; there's still a small (but sizeable amount) of people that still write checks.

But that doesn't mean that 100% of the younger generation of Australians would understand processing checks when they are given one either. I'm sure back in the 1970s and 1980s, writing checks at the grocery store in Australia was a common thing. I'm sure it's not nowadays so the younger cashiers in Australia in 2011 today would not know how to accept them even if it's possible to do so. So what's a 19 year old Australian kid working at Woolworths gonna do if he has to be the unfortunate cashier when 87 year old Australian grandpa Joe hands him a check for his goods?

Probably:

A. Umm....Mr. Manager to checkout stand number 3 please. Mr. Manager to checkout stand number 3 please... (people waiting in line grumbling)
B. Sorry sir, we don't accept these anymore. Do you have cash?
C. Please step aside so I can process "real" customers


The same thing applies with mag-stripe versus Chip-and-PIN. Generation gap; younger kids just don't know how to do them. Sure it's pretty easy and you can figure it out how to do it if you try. But alas, the cashier is just a minimum wage earning part-timer who's main job is to keep the flow of things smooth and quick as possible. He/she ain't gonna take the time to figure out how to do it moreso if there are other people waiting in line. It's just easier to say "we don't take these anymore." And if you create a fuss about it, they could care less; they're not making a career out of being a cashier, and they could give a rats ... from an American whose not their main clientele. Go ahead and give us a bad review on Yelp or whatever, your voice is going to be silenced out by the 99% of Brits/Aussies/Canadians/etc who are satisfied with us anyway, and I'm only working here part-time anyway. When you come around next year or whenever you decide to visit here again for business or pleasure, I won't be working here and you'll continue to repeat this .... over and over again until your banks starts issuing them.

Furthermore, complaining this to VISA, MC, or AMEX back home doesn't do much good either. In theory, your complaint is supposed to create some sort of action to punish these merchants that don't accept the mag-stripe. The reality is, VISA, MC, or AMEX aren't nuts to revoke the license of the merchants when they reap millions in profits from the credit card charges from 99% of the clients who are satisfied with Chip-and-PIN just because the 1% American who couldn't use his mag-stripe was shafted.

Unfortunately, in the global world of credit card transactions, American cardholders are becoming the 1% as the rest of the world's cardholders gradually moves to becoming the 99% by issuing EMV. Mag-stripe works fine in the US, but the moment we start using them abroad, we begin to have problems. And the rest of the world could careless; they are the 99% now.

jamar

China's mandating that UnionPay move to chip+PIN by 2015. Two banks have already issued me chip cards (debit- my Chinese credit cards are all magstripe-only; also, the standard-for-China six-digit PIN on my JCB card means I have had trouble with it at kiosks that otherwise take mag-stripe cards because they expect a 4-digit PIN, but that's a story for another thread). Frankly, I wish the US would do the same.

Believe it or not, in the US pretty much every merchant that takes Discover has blithely swiped my JCB card without so much as looking at it. Now, my UnionPay cards are a different story, due to the PIN (as mentioned above, it's too long for certain terminals to handle)

STS-134

I don't buy the chicken-and-egg theory. Europe at one point had to have had the same problems. How did they overcome it over there?

Cost? Why did the European banks start issuing EMV cards, while American banks still haven't? Those chips, if they're anything like the cost of SIM cards, probably cost between 10 and 50 cents each. Even if they're not used for years, who cares? In other words, it doesn't cost much more than mailing the card to the user. And, if it reduces fraud, then it means that the bank doesn't have to eat as much of those costs, which can easily be $500+ per incident. That alone would cover the cost of over 1000 EMV chips.

Nor does any of this explain why US card issues have been putting RFID chips into cards for years now. That requires merchants to upgrade their POS equipment, but unlike EMV chips, it has major security issues. In other words, the "PayPass" or "Blink" or whatever they call those chips in credit cards, are junk. But surely there's a cost associated with putting that junk in there? (I surgically removed mine from my credit cards due to the security risks).

reft

If my card lacks chip and pin, if lost/stolen, it's less useable in a chip and pin country. So, there may some security improvement there. I wouldn't think that's why the banks aren't doing it, but who knows?

A quick google for "Chip and Pin security" does turn up some criticisms of the system. So Chip and Pin isn't perfected either. It does nothing to improve card holder not present (CNP) transactions. CNP's are growing both in the area of online services and shopping, and fraud.

EMUE may be a better solution, and perhaps the US will leapfrog C&P and go this way: http://www.emue.com/ It probably has it's own problems, such as not getting broken when you sit on your wallet and I don't know if the security researchers have started to try and break this one, like they have C&P.

Waiting for the next gen technology is a legitimate business move. Don't know if this is why they are waiting, but it may be the case.

STS-134

But what Chip & PIN would cut down on is the ability to skim cards, so long as the transaction is encrypted between the CARD and the BANK'S SERVERS. It would go a long way toward eliminating crap like this:
http://abcnews.go.com/US/luckys-supe...ry?id=15123679

People could still steal the entire card and use it for a CNP transaction, but they wouldn't be able to just skim numbers with a device placed on the card reader and use those. CNP transactions also have the disadvantage that for online shopping, you have to ship the stuff somewhere. When the people actually try to pick up the stuff they bought, that's a good way to get caught.

reft

http://www.theregister.co.uk/2010/02...rity_unpicked/ suggests a couple of bright lads in Cambridge England found a way to fake C&P.

But agreed, C&P could help cut down on magstripe skimming, but the bad guys will just change modes as long as there is an incentive to do so. The same thing applies to counterfeiters of currency.

But some do get away with it. The items are shipped and gone before people catch up to it. If it was guaranteed they'd get caught, no one would commit that crime anymore.

kebosabi

The main reason is because the financial system in the US is very different from Europe.

First let's start off with the basics. There are three parties whenever a transaction is made: you (as the consumer), the merchant (the seller), and the bank.

1. You buy the goods at the store
2. The store accepts the credit card which in turns pay a percentage of the fee to the bank
3. and the bank sends the store a check

Sounds simple enough, right? Now the difference is when fraud hits.

When fraud hit in Europe, banks are/were liable for the cost. If Mary Limey Jane has her Barclay's VISA card skimmed for 500 GBP at Harrods, Barclays has to eat up the 500 GBP loss. So, in the UK, the banks had a good reason to actively push towards switching over to EMV cards; they didn't want to continue eat up the cost of fraud.

Who got the short end of the stick when fraud happened in Europe:

1. Mary Limey Jane has her card skimmed
2. Crook goes on a 500 GBP shopping spree at Harrods
3. Mary Limey Jane calls in to say she didn't make that purchase
4. Harrods says we had no idea it was a cloned card
5. Barclays eats up the 500 GBP loss
6. Mary Limey Jane doesn't have to pay 500 GBP
7. Harrods is reimbursed by Barclays for the 500 GBP merchandise loss

In contrast, when fraud hits in the US, the banks don't take the hit, they actually pass down the reliability to the merchants. If Joe Yankee Sixpack has his BofA VISA card skimmed for 1000 USD at BestBuy, BestBuy takes the hit. Since the bank pays very little for fraud, why should they care whether if the card was used fraudulently? BestBuy owes Bank of America 1000 USD if it was used fraudulently. BofA is getting paid even if their customers' card was skimmed, so why spend the extra money to issue customers a more secure card?

Who got the short end of the stick when fraud happens in the US:

1. Joe Yankee Sixpack has his card skimmed
2. Crook goes on a 1000 USD shopping spree at BestBuy
3. Joe Yankee Sixpack calls in to say he didn't make that purchase
4. BestBuy says we had no idea it was a cloned card
5. BofA says sucks to be you BestBuy and asks BestBuy to pay back the 1000 USD check that they sent
6. Joe Yankee Sixpack doesn't have to pay 1000 USD
7. BestBuy has to suck up the 1000 USD merchandise loss

This is why some of the larger merchants like BestBuy, Target, and Wal-Mart are actively spending the extra money to upgrade their terminals to handle more secure cards nowadays. However, banks see no incentive to issue more secure cards because they're getting paid anyway whether it was a legit transaction or a fraudulent one so why bother? Hence the we have articles like Wal-Mart Claims Issuers Block Progress of EMV Cards in U.S., and the chicken-or-the-egg issue still remains. Some of the larger merchants do see an advantage to upgrade their terminals to protect themselves from fraud, but banks again could care less.


"US waiting to just leapfrog to next generation technology" still doesn't solve the problem of incompatibility. Even if the US goes straight to the next best thing, the rest of the world is not going to switch from EMV to the next gen overnight either so the issue of incompatibility still remains.

It's like

• The US still uses A
• The rest of the world has moved away from A to B, so the US cardholder which is still at A can't use B in the rest of the world
• The US sees that B is no good either and just goes from A to C
• The rest of the world is still at B, so the US cardholder which has moved to C still can't use B in the rest of the world

Doesn't solve anything.