Trips to Europe might get a bit more complicated for Americans if European financial institutions have anything to say about it. American Banker reports that the chairman of the European Payments Council, Gerard Hartsink, has suggested that once a switch by European financial institutions to the EMV integrated circuit card is completed in 2011, a recommendation could be made to stop accepting magnetic swipe credit cards. This news could bode poorly for American travelers, who often use their credit cards to both withdraw spending money in local currency and to make purchases while traveling abroad.
Rather than using magnetic swipe strips on the backs of credit cards to read customer information, EMV credit card chip enabled credit cards are inserted into a handheld device. The customer then types in a four-digit PIN to confirm their identity. Deemed more secure than traditional credit cards, EMV technology is set to become the new industry standard throughout Europe.
While Europe has emphatically supported credit card chip technology, and all financial institutions will be switched to it by 2011, America has lagged behind, with consumers and retailers still utilizing magnetic swipe credit cards. Herein lies the issue for American travelers: If European banks choose to eliminate their support for magnetic swipe credit cards (current handheld machines in Europe have the capability to accept them), American travelers may need to find a new way to pay for things while overseas.
While credit cards with chips are hard to come by in the US, there are other options. A few prepaid credit cards offer PayPass—a chip system used by MasterCard. The Exact MasterCard is a prepaid debit card that offers PayPass as well as direct deposit.
Evidence of trouble between the EMV and magnetic swipe systems is already creeping up for some travelers. According to EuropeForVisitors.com, newer self-service machines at railroad stations in France won’t accept magnetic swipe credit cards. In addition, those traveling with magnetic swipe credit cards may have to explain their use to smaller retailers, something difficult to manage if a language barrier exists. While problems are relatively small now, expect them to expand once the EMV switchover is completed in 2011.
If you’re planning European travel between now and 2011, you should still be able to use your traditional magnetic swipe credit card. However, a phone call to your credit card company may give your more insight, as these issues are certainly set to take center stage for them within the next two years.
