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An Aside

By Stephen Lubben

Payment systems are not usually my beat, but returning from a conference this morning, I was again subjected to the continued stubbornness of the U.S. credit card companies regarding "chip and pin" technology, so it seems like a good time to rant. 

I arrose at 6am and made my way to the Luxembourg RER station, to catch the train to the airport. The ticket machines at this station do not accept cash -- not even coins -- and they are the older type, which means they also don't accept U.S. credit cards because we don't have a "smart" chip in our cards. Once again I was stranded at a European train station by this issue -- the last time was in Amsterdam, where, ironically, my INGDirect debit card was rejected.

Of course this is hardly the most pressing social issue of our times. But it also presents something of a puzzle, since the effect has been to encourage me to bring more cash and not rely on my debit or credit cards when I travel. Other than train stations, this typically fixes the problem, but in a way that seems unlikely to be optimal for credit card issuers. The technology is hardly the issue -- my building's laundry room has been using similar cards for years, so that can't be it. And if the issue is the cost of providing the necessary equipment to US merchants, why not let frequent travelers have the option to at least have the cards so they can use them abroad?

One credit union is doing just that, but I can't figure out a way to become eligible for membership. Meanwhile, the rest of the US banks continue to annoy their customers and encourage us to leave our cards at home.

Full post as published by Credit Slips on September 25, 2010 (boomark / email).