Do I need a chip card in Africa?
Dear Cashing In,
I'm traveling to Africa soon. Is a chip card important? -- Jo Ann
Dear Jo Ann,
It depends partly on which part of Africa you're visiting, but it's a good idea to bring a chip card, especially if you plan to travel between regions. Adoption rate of EMV technology throughout Africa was 77 percent by the end of 2012 and continues to expand. EMV stands for Europay, MasterCard and Visa, the international standard for the enhanced-security, embedded-chip payment system now in use in Europe, Canada, Mexico and many other parts of the world.
MasterCard and Visa began shifting fraud liability to ATM owners and merchants in Africa in early 2006 and have long since completed the shift for all points of sale. (In the U.S., the card issuer is still liable for fraudulent transactions.) That led to a rapid migration to the chip-card system, but there are still parts of the continent that default to the magnetic-stripe cards we use (for now) in the U.S.
If you're going to South Africa, a chip card will definitely work best and help protect you from credit card fraud, a growing problem in Africa. South Africa has been on the EMV train for years. By late 2008, more than a million MasterCard-branded EMV cards had been issued there and more than a quarter of all point-of-sale devices were upgraded to accept them.
On the other hand, you would be fine with a conventional magnetic stripe card in East Africa for the next few months. EMV technology is on its way there as well, however. In fact, Kenya may beat the U.S. in migrating to embedded-chip credit cards. MasterCard announced a plan in July to join forces with Nairobi-based Paynet Group, East Africa's largest card processor, to speed up the switch from magnetic stripe to EMV cards.
Paynet has been training bankers on the benefits of chip-and-PIN cards in order to migrate to EMV before a March 2014 deadline set by the Kenya Bankers' Association. Credit card use has grown rapidly in Kenya over the past two years, with the value of transactions increasing more than 74 percent in 2012 -- and credit card fraud has grown with it.
Financial institutions in the region lost an estimated $17 million to fraud between April 2012 and April 2013, according to statistics from Kenya's Banking Fraud Investigations Department. Paynet execs expect migration to the superior encryption of chip cards to sharply reduce fraud in East Africa, as it already has in much of the world.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
Published: October 1, 2013
- How to get double cash back at Costco – How to get double cash back at Costco with executive membership and the Costco Citi Anywhere Visa ...
- You splurged for the Chase Sapphire Reserve card. Now what? – Use the card's points and perks before that $450 annual fee kicks in again ...
- Making the most of flexible airline rewards programs – Several programs allow transfers to airlines and hotels, and there may be more possibilities than you realize ...