Talking with some people involved in unattended gas stations this morning, there is a belief by the gas station owners that they will reduce their fraud levels by not taking mag-stripe transactions.

This is a merchant decision which flies in the face of their agreements with their acquirer.

http://usa.visa.com/personal/using_v...avel_tips.html

Call Visa and report the merchant. It is only with good feedback to the card organisations that this kind of merchant behaviour will be removed.

http://www.mastercard.com/us/persona...iolations.html

Or post a report on the MasterCard website.

Visa can raise a "compliance complaint" against the acquirer, with whom the merchant has an agreement. Repeated compliance failures can result in fines to the acquirer or the merchant, or the merchants card acceptance agreement being terminated.

See the Visa rules link I posted earlier (International Rules, Volume II, Section 3).

While this might be what's being stated by a US card issuer (and I can't find it online), I suspect this is targetted at the 90% of cardholders who do not travel internationally, and perform transactions at their local stores.

Can I suggest the following:

- In the US, Point of Sale for credit cards (or when you choose the credit card account) use signature as the main form of cardholder verification for face-to-face transactions
- In the US, at certain types of retailers, for small transaction amounts, no signature is required
- In the US, using an ATM for cash or balance transactions, a PIN is always required (regardless of the card type)

Outside of the US, the following applies:

- Using an ATM for cash or balance transactions, a PIN is always required (regardless of the card type)
- Some certain types of retailers, for small transaction amounts, allow no signature
- In many countries, signature is the main form of cardholder verification for face-to-face transactions for mag-stripe cards
- In countries where chip infrastructure is present, PIN is becoming the main form of cardholder verification for face-to-face transactions
- In some countries, where the domestic cards have PIN for use at point of sale, PIN is the main form of cardholder verification for face-to-face transactions for mag-stripe cards. In these PIN countries, merchants should be aware of what actions to take when an international cardholder does not have or know the PIN for their card.

The main issue for me is that there are merchants all over the world who take it upon themselves to refuse payment by certain cards because they think it will reduce the risk of not getting paid. Staff training is a secondary issue.

Report these merchants to your card issuer or using the details above.

More reporting will lead to better information at a Visa/MasterCard level, and will in turn lead to better enforcement and compliance.

FWIW, last fall in Japan the Shinkansen kiosk wanted a pin for my corporate visa card. I entered "0000" and the transaction went though. So, yes, I believe that you can make up any number if using a US mag stripe card.

On some machines that does indeed seem to work.
On other machines, you can wait for it to time out.
On others, it won't work at all.
On the best machines (IMHO), it will recognize you have a chipless card and skip the PIN.

Isn't the consistency great?

Just to add another data point (in case this would help someone who's traveling to China). I used discover card in China this Spring at a large chain superstore. After the card was swiped, they asked me to enter a PIN then press enter. I simply pressed "enter" alone to bypass the PIN, then signed for the receipt. The transaction went through just fine. I had heard from another source that entering "0000" could also work but didn't try that with my discover card. I have not used an US issued Visa or Mastercard card in China, so cannot comment on whether skipping the PIN would work for V/MC over there. I can test this again using my Schwab Visa during my next visit to China.

aidanc,

While I appreciate your detailed responses and sharing of your perspective for compliance and promote standards, the fact that matters most to us as the individual consumer is that international travelers to EU could very well be stranded in Europe and your long term view does not provide any real help in such situation now.

On the other hand, don’t you think this actually presents a profitable business proposition for an EU financial institution to offer prepaid cash cards that are compatible with chip & pin to international travelers? For example, the PIN can either be fixed (default to 0000 where a customer assumes his/her responsibility for safe keeping) or customized (with a small fee, perhaps).

I'm not subscribing to the "sky is falling" with chip+pin / mag stripe acceptance. I've always found that you need to carry cash in Europe. There are too many interesting hole in the wall type place that don't take credit at all to bypass. Stick a couple or 3 50 euro notes in your wallet as backup and have fun.

I just don't get what is so hard about someone from the US issuing a card with the correct chip for chip/pin. Regardless of whether US merchants began migrating to chip/pin you'd think someone could at least start offering the cards. Many merchants started on the RFID bandwagon after AMEX and Citi as well as others started issuing cards or fobs. It seems like only McDonalds and a few other merchants consistently take RFID payments though.

I think what is hard are all the expenses an issuer would have to undertake to "make it happen". For starters there will be an increase in cost of issuing the card itself. Then the costs in upgrading their backend systems to support the chip+pin infrastructure. Encoding the data for the chip, the verification of the pin "signature" as part of the sales transaction, etc... Just testing the upgrades to the infrastructure would not be a trivial exercise.

And at the end of the day, the issuer isn't going to make any more money on making these upgrades. Sure, there might be some benefits of less fraud in Europe, but that would be it.

All this would be coming at a time where the card issuers are taking huge losses as people are defaulting left and right. The timing sucks.

Actually, in most our cases, the machines just time-out when we were trying to figure out what to do. It never dawned on us that we could punch in a fake number. I only learned about that when my frield told me his experience in Scandinavia. His question then became: If a fake PIN number would work, then it actually makes the process LESS secured, as the attendant did not bother to ask for his signature, nor verify his ID. In other words, if your CC is lost in Europe, it can still be used this way in places where supposedly only Chip and PIN cards are accepted. LESS SECURITY - is his conclusion. I would like to hear inputs on this debate - supposedly the chip+pin makes the cards in Europe less subject to frauds than the mag cards in US - but if the readers would simply accept a mag card with a fake PIN, then the merchant would just accept the transaction w/o verifying signature / ID, how could this be more secured?

Another data point, friend's friends travelling in Spain, some merchants actually asked them to produce their passports when they made payment by credit cards. But not every merchant did that. FWIW, they are from China.

^^^ That is what I call Theory versus Reality.

Who would have time and energy to take down the restaurants names and addresses and whatnot, keep the information with you, then report to Visa / Mastercard upon your return from several weeks criss-crossing several countries in Europe?

Be Realistic - which traveler in his right mind would bother to do that?

I literally threw away outdated papers - hotel / car reservations, sightseeing notes, boarding passes, train tickets, etc etc as we left each city, to reduce clutter and weight. You would be surprised how heavy it became, the stack of 23 hotel reservation print-out!

The RFID is not secured from what I have read.

The costs of converting to chip/pin cards are quite high - not just the cost to replace existing cards, but the cost involved in the transaction processing systems. It is the latter that is the main roadblock to convert to the chip/pin system. Remember, in US, only AMEX & Discover are closed networks, i.e. they own the processing systems. Visa and MC are open networks and are very fragmented - there are many players in the field, at every step of the transaction.

I suggest you google the subject on the credit card POS transaction processing - you would be surprised by how many players involved in that few seconds for your charge to go through, and eventually reaches the issuer of your card, i.e. your account.

Another reason is, the US issuers do not have incentives to convert - the domestic US market is much larger than all the European countries added together. Just ask yourself, what is the % of US cardholders travel to Europe each year? There is simply no justification for the estimated costs involved.

I believe that 'all Europe' has a larger (something like 20% larger) gross product than the US.

However, the US may have a larger volume of credit card transactions than Europe, where many still use cash as the primary payment method.

I've been burned by this chip-and-PIN/ magnetic card problem, and I expect our US card issuers to implement a solution before my next trip to Europe in 2010. The problem will worsen if not addressed soon.

Thanks for this information -- The Cash Passport is available in Euros and sold at retail locations -- Too bad it appears not to be a true pin Card.

As far as I know, we are on a Credit Card forum, not on a forum discussing the GDP. Shouldn't it be obvious, the US Market mentioned here, refers to the market for Credit Card Usage?

At many (but not all) gas stations in the US with automated at-the-pump card machines, when using a credit card you are asked to put in your 5-digit ZIP code (mail code). Of course, the equivalent of ZIP codes is not all-numeric in other countries (starting with Canada). So not only can't this method work for cards issued outside the US, it's also less likely to be a "backup method" for swipe cards that someone in Europe would think to implement for fraud prevention at unattended gas stations ("check if it's a US-issued card, if so ask for ZIP code").

Btw, because it's the ZIP code, not the PIN, that's used to verify identity at automated card machines, no one in the US tends to know their credit card PIN number. (In fact, I don't think all credit cards come with a PIN; if you don't have the authority to do a cash advance on that card, the credit card issuer never gives you a pin!)

It may or may not be true, but the impression that most people (who haven't read this thread) tend to have is that if they were to use a PIN for a credit card at a US merchant, it would be treated as a cash advance.

It is the case that some merchants will treat your credit "purchase" as a cash advance for somet types of transcations. For example, buying money orders at the post office (since a money order is equivalent to cash). FlyerTalkers are more aware of this than anyone else, because they are always looking for ways to churn cash through creidt cards to earn more miles/points. (The latest loophole they've found is that the US Mint will sell presidential coins at face value, with free shipping, online via credit card treated so far as a purchase. But the fact that people are gooing wild over this shows is because it is the only loophole left where you can buy money or money-equivalents with a creidt card and have it treated as a purhcase intead of a cash advance.)

And, in turn, stuff treated as cash advances doesn't earn miles/points, plus starts charging interest from the moment of the transaction. While stuff treated as purchases is subject to a "grace period" where if you pay the balance in full within a certain number of days after the card statement closes, you never pay any interest.

So people (especially FTers) hate to have even a chance of a transaction being treated as a cash advance rather than a purhcase, and are aware that merchants are albe to do both.

You can still use the cards, though. 00000 or 99999 usually work for non-US cards. Sometimes entering any 5 digit number will work for those cards.

Very few gas stations in the US are fully automated (i.e. no human attendant). So if you try 'pay at the pump' with a non US card and the 00000 or 99999 option doesn't work, simply go inside and pay for it the old fashioned way (give your card to the cashier).