It has been a challenge to get everyone to agree on much of anything when it comes to payments and who pays the cost and where the fraud savings will be realized." 4. Randy Vanderhoof, executive director of the Smart Card Alliance also says, "There is not the equivalent of the UK Card Association in the US to set policy and require all stakeholders to act. The US has low fraud ratesĪmerica has strong legal protections for people whose credit cards numbers are stolen and historically low fraud rates compared to the rest of the world, so there was a "what's the problem?" mentality here. Now they're trying to sort out who will pay for the estimated $8bn costs (pdf) for chip and pin technology. US retailers and credit card companies have been at war for years over who pays what transaction fees. So you have to get three sectors of the market to work together to implement any new technology. You have retailers, big banks and then card associations like Visa and Mastercard. The credit card market in the US is complex (pdf). As the Wall Street Journal reported last week, Target actually tried to roll out smart cards from 2001-04, but the rest of the market didn't follow. It's difficult to get such a large market to adopt. The Alliance estimates that less than 2% of Americans have smart cards. The US has over 10m credit card terminals and 1.2bn cards, according to Smart Card Alliance, an industry group that tries to educate and push for the widespread adoption of this technology in the US. So what's keeping the US in the "dumb card" era? 1. Curiously, HSBC, one of the UK's leading banks that has issued chip and pin cards in Europe for years, does not give them out yet to American customers as "standard practice", according to a spokesman. Citi and Chase, for example, offer several premier credit cards with chip and pin, but only for certain accounts. A number of banks are quietly rolling out smart cards. Things are starting to change – at least for high-end Americans. Some question whether chip and pin would have stopped the Target case entirely, but it sure would have made using the stolen data a lot harder. Yet here we are in 2014 and America, a supposed leader in all things financial, has yet to implement this technology (more commonly referred to on this side of the pond as EMV or " smart cards", which only reinforces that the US is still in the "dumb card" era). It's now in place across Europe ( and beyond) and has greatly reduced data theft (pdf). It was relatively new technology at the time, used to protect against fraud. They were black and red – we called them "Darth Maul cards" after the Star Wars character – and they had microchips embedded in them, something few of us had ever seen before. My American colleagues and I were fascinated by these pieces of plastic. I remember arriving in the UK for graduate school in 2004 and being issued credit and debit cards after opening a British bank account.
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