European Credit Card Standard Leaves Americans Stranded

You arrive at a chaotic foreign train station, teeming with travelers, maybe just off a plane and jet lagged. You go to a machine to buy your ticket for a local train. But after you go through all the steps and insert your credit card, the transaction cannot be processed. You try again, maybe with a different card since on top of everything else, the machine does not take cash. Thankfully, a lone window is selling tickets, but it has a long line that you are forced to join and you miss your train. This exact scenario happened to Jim Burke, a frequent traveler who was stuck in Europe when the Eyjafjallajokull volcano caused travel chaos in 2010 and problems with credit cards are increasingly happening to Americans not only in Europe but throughout the world.

Why? We are victims of a little discussed phenomenon – EMV credit cards, the standard of cards also known as chip and pin that relies on an embedded secure computer chip rather than the old magnetic stripe. This standard is now being implemented throughout Europe and most other countries around the world. The response from American banks? So far they have been slow to even acknowledge the problem and the result is leaving travelers stranded. So where can I get a chip and pin card? (Scroll to the end for updated information 10/13)

US Credit cards have been basically the same since they were introduced in the 1950s – you get a card in the mail, carry it around, hand it over to a cashier to be swiped, then sign for your purchase and go on your way. But outside the U.S., that is all changing. This is in large part due to fraud – in the U.S. credit card companies monitor each transaction as it happens, allowing them to stop fraud at its initial stage. In Europe, transactions are generally monitored at the end of the day, so it has been extremely difficult to catch a fraudulent purchase at the point of sale. So the chip-and-pin card was introduced, the security computer chip preventing card cloning, and the pin ensuring the recipient is using his or her own card. The standard, however, is not being implemented here and getting a card that will work seamlessly in Europe is nearly impossible. The result is America has fallen behind nearly the entire industrialized world and our credit cards are increasingly turned down abroad.

It’s not hard to find an American with a travel tale involving failed credit card transactions. Kristina Peters, a teacher and education consultant from Omaha, Nebraska, had multiple issues with her debit and credit cards in both Ireland and the U.K. She says some staff were helpful, but others were “curt” and that the entire situation was “somewhat unnerving at times.” She was not aware that the EMV standard had been implemented. Nor was Zola Oxley, who attempted to make a purchase at a clothing store at Utrecht’s Central Station. She handed her card over to the clerk, who handed it back without even swiping it, saying it would not work. Zola completed the transaction in cash but many other people just walk away, causing retailers and credit card companies to miss out on sales and associated fees.

Even worse, as places like Europe and Japan increasingly turn towards automation, Americans are unable to use machines to get gas, buy a train ticket, pay tolls or even get something to drink. Last year, I tried in vain to use a credit card at a 24 hour gas station in Italy since it was after hours and no attendant was on duty. Luckily I had enough gas to make it until the stations opened the next morning but it’s not difficult to imagine a traveler caught with an empty tank and a credit card that can’t be processed.

The store experience varies widely, with some staff not knowing how to use an American card and others expressing frustration or disapproval when pushed to swipe the card. Patience and persistence is the order in these situations, since American cards can in fact be used in the new machines – employees just need to insert it and follow the instructions since all machines are required to work with American cards. The attitude, however, of staff being made to complete the transaction can be extremely unpleasant.

Restaurants used to dealing with American cards will have an easier time but places off the beaten tourist track may not understand how the process works and take some convincing to run the cards. Hotels and airports don’t have this problem as of yet, but the European Payments council (EPC), which is in charge of implementing the new standards in Europe, has indicated they may ban magnetic stripe cards in the next few years. That would be a disaster for American travelers.

All this adds a level of uncertainty and stress to trips meant to be enjoyable and rewarding. In recent years, traveling has become more difficult, with packed planes, security alerts and uncertainties around the world. Unfortunately, Americans can also now look forward to problems with their credit cards not being accepted.

To learn more about this problem and help change banking policies, visit GetFluenc.com

Where to Get Chip & Pin cards:

Update 1/15: American credit card companies are now introducing chip cards BUT they are not chip and pin but chip and signature. Since signatures have proven useless in combating fraud, this is a curious half-measure. Reports are pin numbers will follow but for now travelers will have to sign receipts abroad. At least the chip cards will work, eliminating that awkward problem with magnetic stripe cards not being read.

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