Credit Card Isolationism

October 21, 2008

Sometimes it feels that there’s a conspiracy to keep U.S. citizens from leaving the country or even wanting to. In addition to the obvious news media blackout and cultural isolationism (e.g. denying entry visas to world performers), there are passport processing delays, sky-high airfares, a weak dollar, and now… our credit cards don’t even work in Europe.

A year ago in France I had no problem except at train ticket kiosks. But two weeks ago, I was able to use my Citibank Mastercard at only three vendors during a one-week visit. And those had to be convinced to try. I called Citibank and a helpful supervisor explained: Europe now requires all credit cards to have a chip (a gold square embedded in the plastic card) and a pin. These are credit, not debit, cards, and you securely enter the pin at the point of purchase. (The supervisor said she wasn’t informed of this issue until customers started calling in.)

A Boston Globe article and this other good article confirm that I am not alone.

The Citibank supervisor searched her list for a card with a chip and pin that I could get, but found none. According to the Globe article, there won’t be any for a while:

“It would be costly to change all the transaction terminals in the US,” says Don Rhodes, director of risk management policy at the [American Bankers’ Association], “and right now the industry doesn’t seem to feel the level of fraud justifies it.”

Great. To the already compromised reputation of American travelers, we can now add “backwards” and “unable-to-pay”. I wish I could threaten these credit card companies that we travelers might just get used to life without credit cards. But I’d be lying. I want one, and I want it to work everywhere I go.

Addendum 10/22/08: Here’s a more detailed article in the Globe about the debate over the costs and benefits chip-and-pin card deployment. Why can’t the credit card companies offer U.S. consumers chip-and-pin cards with the magnetic strip without immediately updating the U.S. transaction terminals? When in the U.S., the magnetic strip is read, and when in Europe, the chip-and-pin is read. The cynic in me suspects there is no good reason for not doing this, while the idealist in me looks forward to a good explanation, which I will share should I come across it.

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