Go Back  Fodor's Travel Talk Forums > Destinations > Europe
Reload this Page >

Interesting NY Times article on smart chip credit cards and travel

Notices

Interesting NY Times article on smart chip credit cards and travel

Old Oct 3rd, 2009, 01:25 PM
  #1  
Original Poster
 
Join Date: Aug 2003
Posts: 1,933
Likes: 0
Received 0 Likes on 0 Posts
Interesting NY Times article on smart chip credit cards and travel

Just in case you didn't see it, the NY Times had an article about chip versus magnetic strip credit cards and travel in Europe today.

http://tinyurl.com/ydc48rf
jpie is offline  
Old Oct 3rd, 2009, 01:57 PM
  #2  
 
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes on 0 Posts
Ah ha...the good old USA contrary minded, as always, with such things as joining the 21st century in the use of metric measures (too bad if the rest of the world has), Farenheit temperatures (too bad the rest of the world uses Celsius), paper money for a trivial amount such as $1 (too bad the lowedst euro and sterling bank notes are for 5 units of their currenchy) which would save the Treasury millions in replacing worn out paper money, different frequencies for the gsm and other mobile phones causing Americans to have to get tri and quad band phones, finger printing visitors to the country even from countries supposedly our allies (incidentally, this might have played a role in rejecting Chicago for the olympics although few mentioned it)....oh yes so good to be part of a global community here in the good old USA.....
xyz123 is offline  
Old Oct 3rd, 2009, 01:59 PM
  #3  
 
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes on 0 Posts
...and of course, to finish the thought, in the use of chip and pin technology. As the article indicated, it ain't coming here......and the time will come when USA credit cards will not be accepted outside the USA. We'll see what the banks say then.
xyz123 is offline  
Old Oct 3rd, 2009, 01:59 PM
  #4  
 
Join Date: Oct 2005
Posts: 67,131
Likes: 0
Received 32 Likes on 7 Posts
A pretty badly researched article IMO.

1) Poor ms. Hope Einstein was not the best example to illustrate the issue. Withdrawing $/£ w/ an ATM card has nothing to do w/ chip/pin credit cards. Mixing apples and oranges

2) Taking travelers checks isn't a good substitute for credit cards or ATM cards

3) We mostly understand using kiosks can be a problem -- but train tickets etc can still be purchased at any staffed window.

4) Bringing a lot of cash is silly/unnecessary

5) Oh great - Travelex is creating a new card to "help" us. Not! It would just be another instrument to snatch extra fees from unsuspecting tourists.
janisj is offline  
Old Oct 3rd, 2009, 02:00 PM
  #5  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
I think the most true statement in the entire article is this:

"But realistically, it’s not a huge problem, and there are ways to work around it."

At worst, you might want to keep an extra EUR200 in cash, but that is about it.
travelgourmet is offline  
Old Oct 3rd, 2009, 04:12 PM
  #6  
 
Join Date: Jan 2007
Posts: 1,652
Likes: 0
Received 0 Likes on 0 Posts
>

One more nuisance to add to that list: having to be repeatedly interrogated by the bank just to send a simple little wire transfer.
MademoiselleFifi is offline  
Old Oct 3rd, 2009, 04:22 PM
  #7  
 
Join Date: Aug 2006
Posts: 2,026
Likes: 0
Received 0 Likes on 0 Posts
I have NEVER had a problem using either my debit cards or credit cards in Ireland, Italy, Germany, France, England, Scotland or Iceland. That doesn't mean it can't happen, but for me, no big deal. Yes, I've even rented cars in both Italy and the UK using my debit card instead of the credit card.

If a merchant or whatever does not want to accept my payment type, then I'll go somewhere else. Just like in the U.S.

And as to the U.S. being backwards technologically, just where do you think the chip design comes from that allows you to communicate on this board. Which operating system are you using, if it ain't Linux, then gee it must be American. Like that GPS navigator? Well, guess who designed and put up the sats to make it work.



dave
daveesl is offline  
Old Oct 3rd, 2009, 04:40 PM
  #8  
 
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes on 0 Posts
Dave...I didn't use the word backwards...I used the word contrary minded....
xyz123 is offline  
Old Oct 3rd, 2009, 05:00 PM
  #9  
 
Join Date: Feb 2005
Posts: 9,017
Likes: 0
Received 0 Likes on 0 Posts
xyz123, I could have said all that but they would have called me names. Nice, thanks. Did I mention the good thing about the "crisis"? It's not just that everybody seems to realize the truth, but 1.5 liters of Pepsi are down to 0.44€ at Lidl over here and Coca Cola is closely following them. .

Yeah, if they don't want the cheap stuff (clothes etc.) in the US, it's o.k. to ship it here. . It has become shoppers paradise right here in Bavaria in just a few months. Maybe what metrices they use in North America isn't important at all. . Can that be? ;-)
logos999 is offline  
Old Oct 3rd, 2009, 09:47 PM
  #10  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
It isn't about being contrary. The US simply doesn't have as many problems with card fraud. This was noted in the article.

Also important to note is that the burden of fraud usually falls on the merchants, not the consumer or bank. Accordingly, most consumers are not going to get worked up over this.

My suggestion to our European friends? Move somewhere with less crime.
travelgourmet is offline  
Old Oct 3rd, 2009, 09:51 PM
  #11  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
Oh. I also don't see the point of metric. Who cares what the rest of the world uses? The swithing costs are simply too high and there is practically zero real benefit to switching for the US. Besides, most Americans with a high school education learn metric. If they forget it, it is only proof that it isn't very necessary.
travelgourmet is offline  
Old Oct 3rd, 2009, 10:03 PM
  #12  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
One final note. Not all chip cards are created equal. I have a Swiss and a Danish card. I routinely encounter problems using the chip outside the home country for each card. It is a nice idea in theory, but there is currently a very Balkanized system.

The challenge in the US would be creating a compatible system on a level the Europeans haven't attempted. Not being able to use a New York card in California wouldn't be acceptable to most. Yet this is the system that has taken hold in much of Europe.
travelgourmet is offline  
Old Oct 3rd, 2009, 10:10 PM
  #13  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
Sorry for so many posts. One thing noted here has me puzzled. What does the price of Coke have to do with the economic conditions in the US?

You do realize that it is brewed (is that the right word) and bottled in the local markets? Indeed, the formulation sold in europe isn't available in the US. The price of Coke is much more driven by local conditions and global commodity prices.
travelgourmet is offline  
Old Oct 4th, 2009, 01:30 AM
  #14  
 
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes on 0 Posts
travelgourmet....Without meaning to be disrespectful to your opinion, the attitude of who cares what the rest of the world thinks is one of the things that is not really so great about the USA to word it as nicely as I can.....the fact is that we do live in a global society and would have to admit there are some things other do better than we do and the metric system is by far one of them. Why do we burden our kids with having to know there are 5,280 feet in a mile? Or how many pints make up a quart or a gallon? Really, it makes no sense...but it's easy to know 1000 meters make up a kilometer...simply move the decimal three places over...2000 meters is 2 kilometers...there done. Celsius temperatures make more sense than Farenheit...water freezes at 0 and boils at 100...there done. if 99% of the rest of the world uses metrics, wouldn't it be easier for our citizens when travelling to be in tune with everybody else? And as for costs, well Canada converted within recent memory and their highway system from coast to coast is very large....it's done with (yes I know smaller population and all that).

But to get back on topic, yes for the most part right now it's not a big problem as long as you stick to the usual touristy places. But some have reported of running into problems in some rural places and I would find it much more difficult to travel if I couldn't use credit cards...rarely do I have much more than 15 or 20 euro or pounds in hand at any given time...I don't like to carry or pay cash...the only way to travel is with credit cards. What if the eu (and they are becoming more and more powerful in many regards) that as of Jan 1, 2012 only chip and pin cards would be accepted. You can say they would never do that but stranger things have happened.

Finally, I will say that there are things the USA banking system can learn from other countries. One of the sources of credit card fraud (and it does exist in the USA except the profits from credit cards are so large that they simply fold their credit losses into higher fees and interest rates) are clerks who steal credit card numbers. I hate when I go into a restaurant and pay with a credit card they often take my card into some back room to swipe it and bring me the receipt to sign. Because of chip and pin, in most European countries, they now bring a little portable terminal to your table. The card never leaves your sight. Even if it's an outdated magnetic strip card, they do the thing right in front of you. This should be required in the USA too in order to help protect consumers against some credit card fraud. But it isn't going to happen.

In these respects, it would be better for our citizens in the long run to join the rest of the world.....at least IMHO.
xyz123 is offline  
Old Oct 4th, 2009, 01:58 AM
  #15  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
A few thoughts.
1) I agree that metric is more elegant. I just disagree that it provides significant efficiency gains. In the absence of such efficiencies, what is the point? Doing it just to be like everyone else isn't a very compelling reason. As long as there is a standard and people know what the units mean. To use your example: I don't know how many feet are in a mile, but I know, intuitively, how far a mile, foot, yard, etc are. Ditto for cups, pounds, quarts, etc. That 1kg is 1000gm does not really make shopping at the store or cooking more efficient.

2) I think you misunderstand who bears the risk of credit card fraud in the US. If a merchant accepts a stolen card, then the banks simply don't pay the merchant. Accordingly, the drive for chip and pin will need to come from them. The problem, of course, is that the merchants don't own the processing network, so they would need to provide a compelling financial case for the banks and cc companies to invest in the new system.

3) Even if th EU mandates chip and pin, this doesn't address the compatibility issues. Which system should the US cards be compatible with? If I can't use my Swiss card in Denmark, my Danish card in Switzerland, or either on Germany, isn't that a problem? Without an international system, you are still in the same place when you travel.
travelgourmet is offline  
Old Oct 4th, 2009, 02:13 AM
  #16  
 
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes on 0 Posts
To the contrary, while you are correct that for a while there were different chip and pin systems, the eu is indeed working on standardizing it...I think I once read British chip and pin cards would not work in French chip and pin terminals...that has long since been rectified. Requiring merchants in the eu only to accept chip and pin is not a stretch...while I'm not saying it will happen soon, it certainly could. And then we Americans would be up the creek without the proverbial paddle eh.
xyz123 is offline  
Old Oct 4th, 2009, 02:49 AM
  #17  
 
Join Date: Jan 2003
Posts: 14,384
Likes: 0
Received 0 Likes on 0 Posts
I'm not so sure that the incompatibility in Europe has been rectified. I was with some Scottish folks whose UK chip and pin cards would not work in a French terminal a couple of weeks ago.
Nikki is offline  
Old Oct 4th, 2009, 02:58 AM
  #18  
 
Join Date: Aug 2007
Posts: 25,797
Likes: 0
Received 0 Likes on 0 Posts
while you are correct that for a while there were different chip and pin systems

This is not past tense. My Danish card did not work in a chip and pin terminal last week in Germany.

The problem that the EU will face, of course, is that the cards and networks are run by the banks. In the absence of a truly pan-European retail banking industry, it is a difficult task to get everyone on the same page. They could try to force the issue through legislation, but that just seems like an overly expensive proposition.

And it still wouldn't make much sense for the US. Just how much demand could their possibly be for a product to use in selected European countries? I just don't see the point for any but a very small number of travelers. I mean, I live in Europe and wouldn't pay a dime more for a chip-and-pin card from my US bank.
travelgourmet is offline  
Old Oct 4th, 2009, 04:42 AM
  #19  
 
Join Date: May 2005
Posts: 2,121
Likes: 0
Received 0 Likes on 0 Posts
American banks do not adopt the chip technology because it's cheaper to continue to absorb the cost of fraud. European banks have adopted the technology as a matter of principle, irrespective of the cost of fraud. Fraud is higher in some countries than in the U.S., and lower in others. One sure thing is that the chip technology (which was invented in France, as I recall) greatly reduces opportunities for fraud.

Cards with chips are old news in Europe. The United States is decades behind. American banks don't care whether their cards are usable abroad or not, since that's only a drop in the bucket for them. European merchants are reluctant to swipe cards with magnetic stripes because of the high incidence of fraud with such cards (pickpockets love American cards because they require no PIN, just a forged signature that nobody ever checks).

The metric system is technically superior to the old system, and has been so for 200 years. It is unlikely that the U.S. will adopt the system to any real extent as long as it has a strong domestic market for goods. There are some isolated uses of traditional measures that would gain nothing from a conversion to metric and might actually suffer from such a conversion (bushels of wheat, barrels of oil, aviation and ship navigation, etc.), but the units would be useful for harmonization in other areas, and they are much easier to work with.

There are some other key areas in which the U.S. remains stubbornly backwards, such as cell phone systems. GSM was essentially worldwide years ago, with only a handful of exceptions, but the U.S. never adopted it. Then again, the U.S. is ahead in other domains, such as GPS—the competing European project is a joke.
AnthonyGA is offline  
Old Oct 4th, 2009, 05:20 AM
  #20  
 
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes on 0 Posts
I'm not a technology geek although there is some controvery as to whether CDMA as used by Verizon, the largest US cellular company, is superior in terms of coverage et al to gsm. Won't get into that and also both CDMA and GSM are 2g technologies; we've moved on to 3g and 4g so this will be interesting to watch. But one would have to admit that GSM is far superior for travelling as all you need do is unlock the phone (sometimes easier said than done true) and switch sim cards...can't do that with a CDMA phone. The other problem is the fact the two major US gsm carrier, T Mobile USA and AT&T, use different frequencies than most of the rest of the world....whether this is anybody's fault is open to question as I don't think anybody twenty years ago could conceive that by now every 10 year old kid in the world it seems walks around with his or her own cell phone and the thought of using cell phones internationally seemed like science fiction thinking. In that regard, when the European carriers settled on their frequencies, inthe USA these frequencies were already taken and being used for other things. It would have been astronomically expensive to switch the other things so that gsm carriers could use 900 mhz. and 1800 mhz...very understandable in this case and all that means is that manufacturer's simply had to come up with tri band and quad band technology which today is seamless.

But I do agree with the concept that the profits US banks make on credit cards are so humongeously large that the fraud being committed simply eats up a miniscule amount of the profits. Also, admitedly, chip and pin does little to stop the largest source of fraud i.e. that being committed on the internet. We indeed have worldwide commerce today...I order electronics all the time from ebay that are shipped from Hong Kong at very low prices.

But it's like everything else of course. Nobody likes change. I remember when I was a college student and my first visit to London in 1971. That was a very significant year in British history as the £/s/d system was scrapped in favor of decimalization of the currency. Many people fought it like the dickens.....why change....two months after the change people were wondering what took so long. The same would happen if the USA decimalized, so to speak, the archaic measurement system it uses. There would be a bit of moaning and groaning but within two months, people would be used to it and see the beauty in the simplification of conversions (after all, most of our soda bottles are sold in metric units i.e. liters...love those 2 liter bottles). But again deep inside many American brais is still the feeling of isolation makes the country superior.
xyz123 is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Do Not Sell My Personal Information

FODOR'S VIDEO