US card acceptance abroad grows, even at kiosks
With chip cards' arrival, even without PINs, improvement reported
New tweaks to unstaffed kiosks overseas should help allay worries by U.S. travelers that their cards won't work while away from home.
In much of the world, as an anti-fraud measure, cardholders enter a PIN when using credit cards. Almost all U.S. credit cards, in contrast, are not configured with PINs. Even as U.S. banks replace traditional magnetic stripe cards with EMV chip cards, they are choosing not to offer PINs and instead seek to verify a transaction with a customer's signature.
In the past, this has caused problems for Americans trying to use their credit cards overseas, especially at payment kiosks increasingly common in parking garages, tollbooths and train and bus stations. Often the kiosks ask for a PIN. If you didn't have one, the machine would not process the transaction.
Travelers' woes are diminishing, as card companies have devised ways to work around that technological mismatch. According to Visa, 96.9 percent of all foreign transactions with Visa chip cards are now approved. That's better than cards that lack chips and have only magnetic stripes, which are accepted 91 percent of the time, Visa says.
The fear was for naught. ... It worked everywhere.
Secret shoppers report improvement
At unattended kiosks, about 90 percent of transactions conducted by a Visa team of secret shoppers who inserted their cards at terminals in Denmark, France, Italy Spain and the U.K. went through. That's up 63.5 percent two years ago, Visa says.
The improvement comes after Visa mandated in July 2015 that unmanned terminals begin accepting transactions using foreign chip cards, even if those cards had no PIN associated with them. "We've seen a really significant increase in positive acceptance," says Stephanie Ericksen, Visa's vice president of risk products.
It is unclear if MasterCard made a similar change. A MasterCard spokeswoman said she was unfamiliar with any recent company guidelines on unattended terminals. However, some industry analysts said they thought both major card networks had created the rule, and a new customer advisory on Chase's website says "unattended kiosks that accept Visa/MasterCard should now accept payment with or without PIN according to their new guidelines."
The MasterCard spokeswoman said she had no data on MasterCard acceptance overseas.
Still, the perception that U.S. chip cards have trouble abroad persists, even as the vast majority of transactions work.
"There's a lot of word of mouth out there, and it's taking time for the early negative experiences where there were problems -- particularly with unattended terminals -- to be overtaken by the new reality," said Julie Conroy, research director with Aite Group, in an email.
Before leaving on a 10-day family trip to France in September 2015, Chicago lawyer Jen Aronoff called her credit card company to see if she could get a PIN for her Chase Southwest Airlines Rapid Rewards card, since she had heard that European card readers accepted chip cards with PINs. Chase told her she didn't need one, she says.
"I thought, 'I have a chip, but I don't have a PIN, so what am I going to do? Is this going to work?'" she says. She recalled a trip a few years earlier to Austria, when a train conductor with a handheld card reader seemed confused when she handed him a card with a magnetic stripe to pay for a ticket.
But when she went to France, she encountered no problems paying, even at machines in parking garages and in the Paris metro. "The fear was for naught," she says. "It worked everywhere. I was relieved at that."
Improved, but not
Still, not every U.S. card will work abroad all of the time. Ericksen says Visa is working to ensure that vendors comply with the new directives on accepting chip cards and to educate consumers.
If you are in some far-off location where no tourist has been before, then local customs and practices could create confusion.
Philip Andreae, vice president of field marketing with Oberthur Technologies, which provides expertise to banks on chip card issues, says commonly traveled tourist areas are most likely to accept U.S. cards.
"If you are somewhere that tourists go, your chip-and-signature card is going to work," he says. "If you are in some far-off location where no tourist has been before, then local customs and practices could create confusion."
Merchants who are unfamiliar with U.S.-style cards that don't come with PINs could be confused and not know how to work their card processing equipment properly. Or U.S. card holders might not know how chip cards work or be able to explain the details of a non-PIN card to a merchant in a foreign country.
"None of these problems are technical," Andreae says. "Most of them are human."
To safeguard your travel plans in case your credit card transaction is among the small percentage that won't go through while you're overseas, follow these simple strategies:
- Have a backup card and cash. Don't rely on just a single card. Consider carrying a second one. And have sufficient local currency for peace of mind, in case both cards don't work.
- Ask your bank for a chip card if you don't have one. Banks have issued more than 200 million chip cards, and more are on the way, but there are still hundreds of millions of cards that lack a chip. Some issuers will allow you to request a card with a chip.
- Remember how to use a chip card. The main difference between chip cards and those with only magnetic stripes is that chip cards must be inserted into the card reader and left in place for several seconds. If using an automated machine, this is the technique you'll need.
- Bypass the PIN request. If you are prompted to enter a PIN at an unmanned machine, you might be able to get around that request by pressing the "enter," "continue" or "cancel" button.
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