Chip and PIN Credit Card Processing

Foreign Travelers

People living in the United States who travel frequently overseas have found it difficult to use their regular credit cards once they arrive at their destination. Many Canadian and European merchants no longer have equipment to process cards via the magnetic strip found on all US credit cards. For frequent travelers out of the United States, it is recommended that individuals obtain Chip and PIN based credit cards. For the simple sake of risk it makes sense to at least have one card in reserve that you can use in the event that your regular cards cannot be processed. In the event of an emergency when you don’t have cash you will at least be able to use your card, and the card still has the benefit of crossover back to the United States if you are able to find a great interest rate. Chase Bank is among a handful of issuers of US credit cards that also feature Chip and PIN features that can be used overseas and you have the benefit of having a card through a globally recognized financial services firm.

What is Chip and PIN?

Instead of information being stored on a magnetic strip plastered across the back of a card, Chip and PIN cards store information on a microchip hidden inside the card. Credit card processing equipment reads the data via radio frequency, and do not require physically swiping the card through a reader. Instead of a signature on a recipe, cardholders enter a personal identification number (PIN) to verify the card. This security is considered safer than traditional magnetic strip cards, and harder for criminals to obtain your information with skimming or forgery type frauds.

In fact, Europe has been using Chip and PIN credit card processing since 2006 and reports significant decreases in credit card related fraud. France reports an 80% decrease in card fraud. Canadian merchants are all required to accept Chip and PIN cards by the year 2015, with many merchants already processing Chip and PIN style cards. It is in the best interest of global corporations to adhere to rules of this sort for the sake of broadening their customer base so this will most likely be more available and standardized as the years go by.

Chip and PIN Processing to Travelers

Another consideration for American retailers is having credit card processing capable of accepting payment from foreign travelers. Most European and an increasing number of Canadian cards do not have magnetic strips at all, and can only be processed with Chip and PIN credit card processing. If you don’t have the capability to accept these cards, you will lose traveling customers who may have otherwise spent money at your retail location. If you service a large number of travelers, this is something you may want to consider and determine if it makes sense for you to get a Chip and PIN processing system in place.