Despite tech shift, travelers still shouldn’t leave home without credit cards
May 15, 2015
Plane tickets to Europe for your family of four — $3,000. A week full of activities, complete with gondola rides through the canals of Venice or photos with members of the Queen’s Guard in front of Buckingham Palace — $4,000. Finding out your credit card will still be accepted by most retailers outside of the U.S. — priceless.
Much has been made of the fact that most countries apart from the U.S. have undergone a shift in credit card technology, replacing the black magnetic strips that have always been on the backs of cards with small computer chips designed to make transactions more secure.
But according to several major banks, Parkites traveling abroad this summer have little to worry about — they can still use their regular credit cards overseas in most circumstances.
Richard Reed, executive vice president and director of bankcard and customer channel management for Zions Management Services Company, said travelers’ fears of arriving in foreign countries only to find out they have no way to make purchases has been "a bit exaggerated."
"If you go into restaurants, department stores or hotels, you typically should not experience a problem," he said, adding that Visa and Mastercard regulations still technically require merchants to accept magnetic stripe cards. "Does it mean you won’t be impacted? No. You still have the possibility of being impacted, but it’s not something I would be overly concerned about."
Added Betty Riess, spokeswoman for Bank of America: "The vast majority of retailers overseas still accept magstripe cards."
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Where travelers are most likely to run into a problem is with small merchants who may not have magnetic stripe terminals or at unmanned kiosks that only use chip technology. In those instances, Reed recommended a simple visit to an ATM — which still accept magnetic stripe cards — to acquire local currency.
"You shouldn’t run into too many problems," he said.
Dave Nicholls, owner of travel agency Park City Air Cruise & Travel, said credit cards have not been a large concern for his customers traveling abroad.
"We haven’t heard of anyone who hasn’t been able to use their cards," he said.
Regardless, the chip technology will soon be prevalent in the U.S., as well. Riess said Bank of America cards include chips as well as a magnetic stripe, as do those from Wells Fargo Bank, according to Natalie Brown, vice president of the bank’s consumer lending communications. Reed said Zions Bank is implementing the technology as early as this year.
However, the majority of retailers here still are not equipped to accept chip technology. But Reed said that is expected to soon change. The major credit card companies are supporting an October policy shift in which merchants or financial institutions that don’t implement chip technology will be held liable if a card is used fraudulently.
"What we’re really trying to do is drive counterfeit fraud out of the system," Reed said.
Chip-enabled cards are more secure, Reed said, because the chips tag every transaction with authenticated data that is difficult for scammers to replicate. Customers will also be able to affix a PIN number to their cards for what Reed called a form of "second-factor authentication."
However, it is likely that cardholders will be able to sign for transactions, same as always.
"The thing that you keep hearing in the industry is chip-and-pin," Reed said. "In reality, chip-and-pin will really play out for debit cards. For credit cards, where you’re so used to just signing for your transaction, the market is going to move forward with chip-and-signature."