The Bankwatch

Tracking the consumer evolution of financial services

The pains of travelling and paying in a world moving to EMV

Aneace correctly points out a consequential trend in card fraud, that is going to impact travellers plans. Chip card implementation is complex, and the fact that cards will be combo, chip and mag stripe merely increases the complexity.

Aneace’s Blog: The pains of travelling and paying in a world moving to EMV

The explosion in ATM/debit card fraud shows how fraud can move to the US from other parts of the world, like the UK, where card issuers are adopting the more secure EMV chip card standard. Some US banks have responded by putting a temporary hold on all ATM transactions in the UK, leaving some customers stranded. Cardholders are advised to alert their bank when they plan to travel, and to carry multiple cards for multiple accounts and extra travellers’ cheques, just in case. Wow. Blast to the past. Back to the good old days of travellers’ cheques and envelopes filled with cash.

Already we are seeing consumer trends such as:

  • carry four separate cards with $5K limit, versus 1 card of $20K
  • keep one card with less than 1K limit for internet purchases
  • request bank maintain cards separately from other accounts
  • hold credit card with another bank, that keeps the card separate from main accounts

Future trends:

  • chip card with no mag stripe
  • maintain low limit mag stripe card for travel, or non home bank, domestic use

Relevance to Bankwatch:
Card use is not simple nor are behaviours understood.  Chip will reduce some fraud generally, but introduce a high level of complexity in consumers minds that drives aberrant card behaviour.

Written by Colin Henderson

June 27, 2006 at 21:49

Posted in Chip Cards, Debit cards

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