Heimdall

<i>"My only complaint about use of credit cards in Europe is the continued stupidity of making people sign for small purchases, say less than €50 or £50 or whatever."</i>

Not true! Europeans have contactless cards, which you merely wave at the terminal for small transactions (under £30 in the UK), no signature required. For whatever reason, American companies have never adopted contactless technology. I have my American CC set up for Apple Pay, and just hold the iPhone near a terminal that accepts contactless payments.

xyz123

Heimdall...good point. I do have android pay as well as Samsung pay but never use it. I find it easier to use the card. Contactless just hasn't caught on here and the banks really haven't pushed it. But on the bright side, mastercard is working on cards that will have to be activated by fingerprint controls

thursdaysd

"My only complaint about use of credit cards in Europe is the continued stupidity of making people sign for small purchases, say less than €50 or £50 or whatever. "

But none of the locals have to sign anything. Be thankful they process your card at all.

xyz123

thursdayd...not true. In the UK some cards are issued to handicapped people that are chip and sign. Why should I be thankful they process my card at all? Visa and mastercard merchant agreements require them to do so and besides which, the merchants do not assume any risk for chargebacks for fraud when one uses a chip card whether it be signature or pin.

Heimdall

I mainly use Apple Pay so I don't have to sign when using my American cards. I keep my shopping list on the iPhone, so already have it out when I reach the supermarket till.

In Britain, people worried about security can request debit cards without the contactless feature, but few do. My one British card has contactless payments, which I use on the London underground. Last time i tried to use Apple Pay on the tube it didn't work.

chartley

Like other posters here, I have always been surprised at the reluctance of American banks and card issuers to adopt the chip and pin method of card verification, since it seems to offer a simple, secure and elegant solution to the problem of fraud. Even if the individual is not personally responsible when fraud occurs, the cost has to be absorbed somehow, and it is bound to be the public which collectively pays.

On two occasions during a recent visitb to California, we were asked by merchants to enter our pin rather than sign, which came as a surprise. But to show how uncertain these things can be, only this morning I was`asked by the cashier in an Italian Co-op supermarket to sign on a pad rather than input my pin. It is as well that he did not check my signature, as I never remember to sign the back of my card. The rest of Italy seems happy with chip & pin, however.

Chip & pin became the norm in the U.K. just over 11 years ago. Although arrangenents are possible for people with certain disabiities to sign rather than input their pin, such transactions are very much a minority.

I found the following report online, written in 2016, after ten years of chip & pin becoming the standard. It inevitably presents a positive picture, but some of the figures quoted are interesting and persuasive.

xyz123

Charley...as I said it's always the bottom line. The US banks make a fortunate on their plastic card operations. They don't want to do anything to jeopardize their position in the market. I am sure they have researched this matter very thoroughly and it still comes up, at least to them, the cost of converting to pin preferred cards as opposed to signature based is greater than the amount lost to fraud on lost or stolen cards. Several banks, such as USAA did try to go in the direction of pin preferred cards several years ago and discovered most consumers considered the pin to be a bigger pain than just signing or going out the door without signing which is the norm here for small purchases and so that people might be less likely to use their cards than the signature preferred cards. That's it and that will always be it. The bottom line. Until the banks can be convinced they will lose more due to fraud if they convert to pins, I am afraid nothing will change.

Heimdall

Xyz123, the USAA chip & pin cards were primarily for military personnel stationed in Europe or those who frequently travelled overseas. Unless you specifically requested one, you were issued a card with magnetic stripe only.

For a brief period USAA chip & pin cards worked exactly like European cards, but when USAA converted to chips, all the old chip & pin credit cards were replaced with chip and signature. I'm still upset about that!

xyz123

Heimdall...USAA began issuing chip and pin mastercards when they began offering masgte rcards and you're quite right. You had to specifically request a pin preferred version. At the time, absolutely next to nobody in the USA who used the pin feature. Within a year, long before they converted their mastercards to visa cards, all new mastercards being issued did not have that option any longer. I found that out as I was one of the first to request the pin preferred mastercard and used it all through my European trip in 2013. Before leaving in 2014 as my card had been somewhat damaged, the new replacement card they issued was not pin preferred and when I called them, first they denied they had made a change as the csr's know very little about these things, but ultimately were forced to admit they had indeed stopped issuing new pin preferred cards for "competitive reasons." But they did not de-activate the pin preferred cards that had been issued so those people like yourself were grandfathered in until the cards expired. Last year, they made the decision to convert all their mastercards to visa cards and those visa cards being offered are signature preferred with pin capabilities. At first there was some sort of snafu between the bank and visa and many of the new cardholders reported problems at some kiosks. That has been corrected. For those interested in the double talk and rationale of some of these decisions might find this discussion interesting:

https://communities.usaa.com/t5/Bank...ure/td-p/87787

The answers of the USAA reps are very interesting to say the least. Again, the overwhelming majority of consumers in the USA who don't travel outside the country really don't care all that much. As I have kidded around with people so many times, many Americans are taught from birth about American exceptionalism but I think that means Americans take exception to mny things done elsewhere such as maintiaining the archaic imperial systems of weights and measures, retaining paper money for trivial amounts such as $1 (which costs our treasury millions every year) and some other things I will leave out so as not to start political arguments. Their refusal to embrace chip and pin is just a further example but there's very little any of us can do about it.

Heimdall

Hi xyz123, thanks for that link to the USAA Member Community. I added my 2 cents worth to another thread on that forum when the chip & pin cards were replaced. Fortunately I never had a problem withdrawing £ from ATMs like some of the posters on your link.

I have been a USAA member since 1966 when it was just an insurance company for military officers. Later I started using the banking and credit card services, and on the whole have been happy, but customer service has deteriorated since then.

Fortunately I also have a British chip & pin card for those situations when the USAA card doesn't work.

xyz123

Hi Heimdall...according to the link there had been difficulties when the new visa cards USAA blamed on a link with visa not recognizing their pins (which are online pins first). My question to you is how often recently have you had any difficulty using your new USAA visa card at kiosks and the like? I would suspect, although I'm not trying to defend the situation, very rarely.

Heimdall

Hi xyz123, I use my Barclaycard with chip & pin when in doubt, so haven't tried the USAA credit card in kiosks or where I may have to enter a pin. Since I live in the UK, I also have a British credit card, and have a choice of which one to use. I get 1.5% cash back with my USAA card, so use it for nearly everything else.

Of course I use my USAA debit card for withdrawing cash from ATMs, and that has always worked faultlessly.

Centralparkgirl

And in Italy - Is a chip card without a pin still accepted? And if so, is it accepted at gas stations?

xyz123

Centralparkgirl...Despite the naysayers here and my person preferences, the answer is a resound probably but...

If you're read through the thread, every merchant signs an agreement with visa and mastercard that he or she is supposed to accept all valid cards but the networks do little to enforce these rules so you may find some merchants especially at kiosks and train stations where there is no attendant who blatantly refuse to follow these regs under the mistaken belief they are liable if a fraudulent card is presented. Also while some here characterize the US system as primitive, actually in certain respects the system here is more advanced as the use of offline technology, where the whole idea of the chip originated is unnecessary here as our communication system is far better developed. But of course that won't do you any good if your card doesn't work for lack of a pin, I would agree.

But the solution is obvious and I've changed my mind on this. Get a card with pin capabilities just as a backup. Among the institutions you can look at are Barclays Bank USA which issues the arrival card both with and without an annual fee. Of course the benefits of the card with the $85 fee are somewhat better but both have pin capabilities and this is your back up card. Or take a look at Pentagon Federal Credit Union. They have a new card which pays 1.5% on every purchase, no foreign transaction fee and that goes up to 2% if you open what they call their Access America checking account. The card has no annual fee. If you have no connection with the military, I assume you're from the USA, you can join this credit union by joining another organization as spelled out on their web site. It's a good card with good rewards but again it need not be your primary card.

I know it's not the short answer you would have preferred. Again, the chances are excellent your card lacking a pin will work almost everywhere in Italy but nobody can guarantee. I hope this helps.

Nonconformist

"the mistaken belief they are liable if a fraudulent card is presented."

In Europe they ARE liable.

chartley

Centralparkgirl

My experience with credit and debit cards in various parts of the world is that you should seldom rely on them always being accepted. What may work at a Mariott hotel in a capital city could wel be useless at a rural fuel station on a Sunday afternoon when you have to use a self service pump and the instructions are in a language you don't understand.

My advice would be to travel as well prepared as possible, with cards that conform to international standards, as well as alternative cards and sufficient cash if nothing is accepted

And things might still go wrong.

xyz123

Nonconformist...you will have to prove that to me. I have read the manuals of both mastercard and visa and they don't put the onus on the merchant; especially when using a chip card in a card is present transaction. In the USA, the implementation of chipped cards was that merchants whose equipment is not emv compliant as of 01 October 2015 will bear responsibility of a card with a chip is presented and they use the magnetic strip. If you can cite specific examples where merchants are liable in card is present transaction that is verified by signature, I will apologize. But I don't think, as long as merchants don't bypass the chip as, unfortunately many do here that merchants bear the responsibility. If I'm wrong, I'm wrong but I don't think that's the problem.

Sarastro

Not that it makes any difference at all, but the first USAA chip & PIN Mastercard that I received was just that, a chip & PIN card. It was not a signature preferred card. If you used it at any location with EMV equipment, you were required to use the PIN. As I live in France, I used the PIN on that card for every purchase I made here. USAA unfortunately replaced these with MC chip & signature cards and then they replaced everything with Visa chip & signature cards.

I believe that there are two main reasons why US banks were afraid of chip & PIN cards:

1. Because Americans carry, on the average, 6 cards in their wallet. If all 6 cards had different PINs some issuer´s cards were not going to be used as holders would probably only use the cards whose PINs they remembered. Someone could ask that his cards all be issued all with the same PIN but this would increase logistical costs of the issuer and diminish security for the user.

2. Chip & PIN cards are off-line cards. Cards had to be replaced to change the PIN. Off line cards cannot be easily canceled by a bank. Authorization for an on-line purchase may be withheld by an issuer at anytime.

It would be interesting to hear other opinions as to why the bulk of US banks has shunned chip & PIN cards.

USAA has lowered their foreign transaction fees on credit card purchases to 0%. However, they do not offer cash back on foreign purchases. Like Heimdall I have had a USAA credit card for decades, probably since they first starting issuing them, but I rarely if ever use it. For me, the best credit card available is the PenFed Defender card for three reasons:

1. Defender has no annual fee, no transaction fees.

2. Defender offers 1½% cash back on all purchases, foreign or US. PenFed´s other cards (as well as USAA´s) do not offer cash back on foreign purchases.

3. Defender has an off-line PIN

Admittedly, there are those who pay annual credit card fees to receive specific benefits which may be of interest to them. My objective is to obtain the lowest possible cost in using a card.

Having an off-line PIN is important for those making purchases at locations which do not have on-line capability. There may be few to no locations in the US without on-line capability but here, there are a number (in spite of what Visa likes to advertise). Some toll booths and most pay-at-the-pump fuel sales points do not have on-line capability. So far, my PenFed card has been accepted at every pay-at-the-pump location I have tried.

Heimdall

Sarastro wrote: <i>"USAA has lowered their foreign transaction fees on credit card purchases to 0%. However, they do not offer cash back on foreign purchases."</i>

That's news to me! My USAA Preferred Cash Rewards Visa card gives me 1.5% Cash Back on all my purchases, and I live in the UK. I just redeemed some Cash Back last week.
https://www.usaa.com/inet/pages/cred..._rewards_terms

xyz123

Sarastro...you nailed two of the arguments the banks have given me for the decision to go with chip and signature. While some here ridicule the idea people might have trouble remembering a four digit pin, if you have several cards and reach into your wallet it's an extra step mentally to match the right card to the right pin. However, just as important to the US banks as I noted above is cost. They resisted even bringing in the emv chip for a while because they simply looked on fraud as part of the cost of doing business and as long as fraud totals were small as compared to profits, they saw no need to go with the emv chip. As fraud became a bigger issue in the USA and more merchants outside the USA began refusing to process chipless cards, their hand was sort of forced to introduce the emv chip and we have what we have i.e. a hodgepodge of stupidity. Many merchants here in the USA have still not updated their terminals and still swipe despite the liability shift. Most restaurants here do not have the portable wireless terminals and our system of tipping at restaurants where they take the card to a backroom to run it and then have to manually adjust for the tip is a further ingredient for disaster. In the USA, it's rare to have a gasoline station where there is not an attendant to deal with those who don't want to pay at the pump. It is extremely rare to see a station lacking attendants here.

But I still believe ultimately the bottom line is the difference between chip and pin as opposed to chip and signature, at least for now, only comes into play if the physical card is lost or stolen and they will show you data that this is simply not a large enough problem here to override the costs, as you outlined, of implementing chip and pin. It's as simple as that.

Speaking strictly as a consumer, I don't care what cvm a particular merchant uses and in what order. To me, using a signature preferred card is simpler than a pin preferred card, not saying at all that it's a problem with a pin preferred card. As I said several times, in the USA today, most merchants with the full blessings of mc, visa and amex do not bother with signatures under $50. It is very rare in the USA that merchants, usually students with a summer time part time job, even bother to compare signatures where signatures are collected with the signatures on the card. A British friend of mine visited me, we went to the supermarket, he insisted on paying. The bill was something like $85. He said to me two things. He said he couldn't believe how low the prices were and when he used his UK card, they swiped it and nobody looked at the signature as we had a signature pad in the supermarket. He said what kind of security is there and I said, "none."

But the bottom line, of course, is that nobody need lay awake at night worrying about one's card being hacked. In the USA as elsewhere, we have zero liability for fraud. The banks do not want to d anything to discourage people from using their cards.