Barred from the card-code club

Special to The Times


The cashier at the Danish National Railway station in Copenhagen hand- ed me an alphanumeric keypad and looked at me expectantly. I looked at the keypad, looked at her and tried to figure out what I needed to do. I wanted to pay for three tickets with my Visa card. Simple transaction, breathtaking price ($110).

What code?

“There is no code,” I said. “It’s a credit card.”


“You have to have a code,” she said. “It’s standard with European credit cards. No code, no tickets. Do you have a card with a code?”

Luckily, I did. It was a debit card on a U.S. checking account that I was able to use for the tickets.

But the glitch typified the trouble I encountered all over the Nordic countries: I couldn’t use my credit card at any automatic pay-point, such as gas pumps. We had to search instead for staffed pay points, where cashiers also wanted a scannable picture ID when we signed for purchases.

If you don’t have a credit card with an embedded ID chip and accompanying PIN, you may be limited in the number of transactions you can make.


Here’s the catch: Americans cannot get such a card through U.S. card issuers.

The term is “chip and PIN” (or EMV, for Europay, Mastercard and Visa). Most European banks and merchants are switching to it. Canada’s switching too. By 2010, you’ll have trouble using a standard American credit card at many Canadian merchants.

Banking officials say the chip-and-PIN method has reduced credit-card fraud substantially in Europe, where the problem grew exponentially when former Soviet bloc countries joined the European Union.

If your card requires a code, the reasoning goes, it’s useless to a thief. No stays at a fabulous luxury suite or a night on the town or a pair of Gucci shoes, courtesy of you or your card -- unless you have the code.


But there are no plans for this in the U.S. When I asked my bank how I could get such a card, I worked my way up the informational ladder to an assistant vice president before finding someone who knew what I was talking about.

Even the best-informed consumers don’t always know about the issue. “I had the same problem in London last fall, and I ought to know about these things,” said Don Rhodes, director of risk management policy at the American Bankers Assn. “The technology’s been on the radar for U.S. banks, but it would be costly to switch.”

So what can U.S. travelers do overseas? Rhodes suggests rethinking the virtues of traveler’s checks. The drawback: Although you can exchange them for cash (you recall that quaint old commodity business travelers have largely consigned to history), individual merchants won’t always accept them. And it means you’ll be walking around with a pocketful of cash.

You could load up your checking account with cash before you go and draw that down using debit cards. That obviates the advantages of credit, which many frequent travelers milk to the max to get points or merely to postpone costs for a month. You’re also less able to dispute a charge.


Some cashiers in Europe are willing to scan the bar code on a picture ID (my Washington state driver’s license, for instance) to accompany your signature, but that’s not always the case, and then you’re back to debit cards and cash, or handing over your passport to scan -- if you’re OK with having that data in a convenience-store-chain’s servers.

What about acquiring a chip-and-PIN card? Neither American Express nor HSBC, despite their global scope, offers such a product for U.S. customers.

American Express wants vendors just to accept its cards, period.

“We believe magnetic stripe credit cards should be accepted by most merchants in Europe,” said Molly Faust, an Amex spokeswoman in New York. “We’re trying to get training rolled out to cashiers.”


Of course, that won’t help with automatic unstaffed terminals such as pay-at-the-pump gas stations.

Here’s the tradeoff: Credit card fraud in Britain is estimated at $500 million a year. (In the U.S., it may be as much as $5 billion.)

“The banks eat that cost,” Rhodes said. “It hasn’t reached the pain threshold yet that will spur a change, though I kind of think it will someday.”