On the ever-changing topic of new technology comes something from the financial sector which has been slow to compete with the personal side. Or is it personal?
How often has your wallet changed in the past five years? Ok, you get a new card every few years from your bank. Does it ever look different? Yes, maybe a new color or design, but ever something revolutionary? No.
The U.S. is completely behind in one realm of technology, and that is the credit card or ATM card. Once again Europe is beating us and it is because of their not-so-new “smart chip technology”.
While studying abroad in London last fall, I realized that cashiers did not know how to handle my card at first, and it definitely scared me. Every time I went to buy something, it was met with a dumbfounded look to which I said, “I’m from the U.S.?” Yes, my magnetic strip is a decades-old technology. Embarrassing.
Fortunately, they were able to complete my purchase overseas because most merchants still have the ability to swipe a card. But, many of these merchants are changing over, and smaller shops and businesses cannot accept a swipe card.
The smart chip credit cards have smart chips instead of magnetic strips which hold the owner’s information. When a purchase is made, the chip side of the card is inserted into the device’s slot. When the person puts their four-digit pin number in, the chip is read, and the transaction is made. It takes a matter of seconds for a receipt to print.
Many of these devices are hand-held and wireless, so waiters may bring them to tables in restaurants. I was intrigued by this in Europe. Not only are they convenient, they prevent fraud better than the strips can. It is difficult to forge a pin, and the device does not require the internet because the terminal itself verifies that the card is authentic and not stolen.
The issue remains for Americans travelling abroad in Europe, Asia, and South America. Canada has recently announced that they will be switching by 2010. American cards are still able to be used abroad, but we are now definitely falling behind in terms of this secure financial technology.
CreditCards.com published a story online on October 1st about the issue of our older technology: