As the rest of the world wraps its migration to EMV/chip-and-PIN technology, Americans traveling overseas are running into mag-stripe disadvantages.
This week, travel reporter Michelle Higgins of The New York Times writes that U.S. cardholders traveling abroad are getting turned away by some merchants, since mag-stripe readers are quickly becoming things of the past in every corner of the globe except the United States.
Though EMVCo., which oversees and spearheaded the EMV shift, has said from the beginning that all chip cards and readers would continue to also read mag-stripes, many merchants are reluctant to accept mag-stripes, since they can be held liable if card information is skimmed or compromised. And because magnetic stripes are relatively easy to copy compared with chip-and-PIN technology, accepting mag-stripe transactions potentially opens the door for fraud.
The problem is that most U.S. consumers have not been informed by their financial institutions about potential transaction problems when traveling overseas. Most, in fact, have no idea what EMV or chip-and-PIN technology is.
Twenty-two countries, including most of Europe, Mexico, Brazil and Japan, have adopted EMV technology, according to the Smart Card Alliance. About 50 other countries, including China, India and most of Latin America, are in various stages of migrating over the next two years.
Last year Canada began rolling out chip-and-PIN cards and plans to stop accepting mag-stripe cards at ATMs after 2012 and at POS terminals after 2015.
