Saturday, December 5, 2015

My New Chip & Pin Card Works! (Well, Sort Of...)

I've blogged previously about the difficulty my wife and I had last year while traveling in Europe with our "Swipe & Sign" credit card (see American Travelers Abroad: The Chips Are Down). Briefly, the problem is that U.S. credit card technology is way behind most of the rest of the world, where the standard is the much more secure "Chip & PIN."  Transaction information is encrypted via the chip embedded in the card, and then rather than a signature that anyone can fake, a personal PIN number is required to complete the transaction.  An American traveling abroad can still charge things because most card readers there do have a swipe slot and will generate a paper slip to be signed.  However, this assumes the transaction involves face-to-face interaction.  Many point-of-sale transactions in Europe are at unattended machines that (a) only accept chip cards and (b) require a PIN. These include toll booths, gas stations, parking garages, and ticket machines for public transportation --- in other words, many of the venues tourists are likely to encounter.

After our difficult experiences last year my wife and I decided to see if we could get a chip and pin card for future travel.  I quickly found that several companies offered Chip cards, but they were not true Chip & PIN cards because they still required a signature.  Indeed, the first type is what American credit card companies are now distributing in the wake of several high profile data hacks, such as the Home Depot and Target debacles.  These cards, if used with a chip reader, are definitely more secure than the swipe cards they replace because they are harder to counterfeit and the transaction is more securely encrypted.  However, they may do you no good at all in the unattended purchase situations you are likely to encounter while traveling abroad.  Here is the description included with my new Chase chip card that I recently received:
You may be asked for a PIN, rather than a signature, when using chip card readers abroad.  If this happens, you may be able to cancel the PIN prompt and complete the transaction.  Just in case, it's always a good idea to carry local currency for payments at unattended kiosks that may require a PIN.
News Flash, Chase:  Many of those unattended kiosks won't allow payment with cash!

The card my wife and I settled on was the Barclay Arrival + which was touted as having true PIN capabilities and no foreign transaction fees. We received the card and set up a PIN, but of course we had no opportunity to test it here in the U.S.  Our first complete test abroad came a short while ago on a trip to Scandinavia, the Baltic States, and Saint Petersburg, Russia.  Here's my report.

When the chip was inserted into card readers it worked flawlessly everywhere.  Not once did a merchant have to swipe the card.  So far so good.  However, I was disappointed to find that in all face-to-face transactions I was required to sign the charge slip, rather than enter my PIN.

The real test came when we encountered unattended machines.  This occurred  when we landed in Stockholm and needed to buy tickets for the transfer bus from the airport to the downtown area.  In the arrivals area we found a collection of unattended machines selling train and bus tickets.  We stuck in our Barclay card and it asked for our PIN. I entered the number and .... voila! IT WORKED! Wow, we Americans had finally entered the 21st century in terms of banking technology!

Later we needed to buy metro tickets, which in Stockholm are available for sale in certain stores and from unattended machines located near the metro turnstiles.  I held my breath the first time we stuck in the card.  Bingo! -- it asked for our PIN and accepted it!  This happened several more times during the course of our stay.  In short, every time we encountered an unattended machine on this trip the PIN functioned perfectly.  What would have happened if we tried to use a Swipe & Sign or a Chip & Sign card?  Don't know, don't care.  I do know that last year in Europe we were unable to complete these transactions with our old credit card and it was a major pain in the butt.

Apparently the Barclay card's default is to require a signature, but if a PIN is absolutely required it will accept it.  This isn't as good as I had hoped, but it is certainly an improvement and probably the best we can do at the moment.  To the best of my knowledge, there is no true Chip&Pin card where the default is PIN available to Americans at this time (see Note 1 below).  If you know of one, please forward the information to me.

In preparing this blog I did some research on chip cards and immediately found that there is still a lot of confusion about them, especially the difference between Chip&Sign cards and Chip&PIN (with signature also, like my Barclay card).  I even found one forum in which a person with a Barclay Arrival + card claimed the PIN wasn't accepted abroad -- clearly false given my experience of a few weeks ago, as well as reports of other travelers.  At any rate, here is the best and latest assessment of true Chip&PIN cards available to Americans I could find, dated August 1, 2015:  MileCards.Com, "11 Chip & PIN credit cards with no foreign fees."

Happy travels!!
Related Blogs & Notes
American Travelers Abroad: The Chips Are Down
One Way That Chip Credit Cards Aren't More Secure
Note 1 -- I've come across a few unofficial reports of Chip & PIN cards from some credit unions that will ask for a PIN when read by the new readers now being distributed in the U.S.
Note 2 -- I've also come across an unofficial report that foreign chip readers are being modified to accept Chip & Sign cards from the U.S.  This seems doubtful to me -- or a least a bad idea if true -- because it lowers the security of unattended transactions.

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