America, The Backwater Of Credit Card Technology

So, we invented the automobile, the airplane, the computer, and the internet.   Nevertheless, we are still lagging pretty far behind in credit card technology.

Magnetic Stripes

The magnetic stripe on the back of your credit card has been around for decades.    It was probably invented around the time of 8-tracks and is equally advanced.   Generally, they work, except sometimes they do not.    After you have had your card for a a year or two, they just seem to stop working sometimes.    Ask for a new card, and you are treated like you just had your card stolen.   All cards on your account are canceled, and you have to wait for a new one to arrive in the mail.    Sometimes, they work a bit too well.    It turns out that some people employed as waiters will carry portable card readers called skimmers.    When they take your card, they will casually skim the data off of it, so as to use it for fraudulent purchases later.    For some reason, this seems especially common in New York City.

Another recent development, is skimmers attached to ATMs and kiosks.    There have been reports of people just gluing their skimmer on to a Red Box DVD kiosk or other unattended machines that take credit cards.    The user of the machine just thinks that it is not working after swiping their card several times.    A few hours later, the skimmer is retrieved, and the credit card numbers obtained are used fraudulently.

There is one technology out there that would cut down on this type of fraud, but it is not currently used in the United States.    This technology is called chip and PIN.    As the name implies, there is a computer chip in your credit card, and you are asked to use a Personal Identification Number (PIN) when you use the card.  Worse yet, Americans are finding out that  some kiosks in Europe require a credit card with chip and PIN technology, according to this article in the New York Times.     Apparently, even Canada is joining the 21st century as the deploy this technology, but there currently are no plans to do so in the United States.   Sigh.

Pay At The Table

Another area where the United States lags behind the world in credit card technology is with wireless devices that allow restaurant patrons to pay at the table.   Four years ago, I was eating dinner at a nice restaurant in Brazil, when the waiter handed me a credit card terminal with the bill.    I was able to swipe my card, add a tip, and print out the receipt myself with no problems whatsoever.  This technology has been widespread throughout the world for years, but it is big news when a restaurant starts using it in the United States.

While the chip and PIN technology mainly benefits the card issuers by reducing fraud, “pay at your table” is a huge win for credit card holders as well.     There is nothing more annoying than finishing dinner and having to wait 1, for your bill to arrive, 2) for the waiter to return to pick up your credit card, 3) for the waiter to run your card, and 4) for the waiter to return with your card and the receipt.    I have never been a waiter, but I am sure they find all of the back and forth annoying as well.

With this system, a waiter can merely drop off your bill with the card reader/printer.   You swipe your card, enter a tip, and print the receipt.    You don’t have to worry about your card being skimmed, as it never leaves your possession.     You also do not have to worry about typos “rounding up” your tip when it is entered.    I am sure it is not that cheap to purchase all of the card readers, but a restaurant owner could justify the expense the reduced staff needed, as well as the customer satisfaction and quicker table turns.

Ok America, it time to get with the program!