In Defence Of Dumb Cards

Yesterday, I told you about how credit card companies were coming up with some innovative, if pointless technologies to include in our credit cards.     Today, I stumbled across an article that was published two weeks ago in the New York Times that seems to refute the idea of smart cards.

Why Are Dumb Cards Better?

The idea is that credit card fraud has been coming down steadily, so there really is no urgency to replace the good old magnetic strip.    Furthermore, who needs chip and PIN technology when so many gas stations terminals are already asking you for your zip code, something that is pretty easy to remember.

Who needs a radio frequency id chip so you can waive your card in front of the terminal?   The idea was that you wouldn’t have to hand over your card to be swiped, and that you wouldn’t have to sign for purchases.   In reality, most stores now let you swipe your own card, and signatures are no longer required for small purchases.

The article also explores the roots of why credit card technology in the US differs from that in Europe.   Ironically, we have less technology in our cards because we have traditionally had better technology in our communications system.  We were able to check card numbers against a central registry, while the Europeans traditionally relegated the security to the card itself.

The article talks about “pay wave” technology that will allow purchases without having to swipe or sign.    Personally, I like the idea of having to do these things before making a purchase.   The last thing we need is to make it too easy for people to use their credit cards with just the flick of their wrists.   Taking out the very little effort remaining is an induction to both fraud and overspending.

The fact is, many cards already have some version of this technology.    Take a look at the back of your American Express sometime.   There is actually a little symbol that looks like four radio waves emanating.   Occasionally, I see this symbol on card readers.   I have even tried it a few times, and it only worked once, so I never bothered again.    The fact that most people aren’t even aware of this feature is further proof that no one really cares how much technology you can deploy, they just care what the tech can do for them.