On the topic of contactless cards, they use a variety of them in Japan, and I love my Suica card for the convenience when traveling by train. Just tap the card on the reader (on turnstiles at train stations, on vending machines near train stations, at many restaurants or coffee shops near train stations, etc.) and it processes the payment and gives you your remaining balance. Just have to load a few thousand yen onto it every so often to make sure I can cover train fare.
Farther away from train stations, the card readers get pretty scarce, but since I mostly travel by train to get anywhere, it’s rarely an issue for me out here.
Mind you, you only have to get the card within a pretty narrow distance, not actually physically contact the reader. Lots of folks buy iPhone cases with a little pouch on the back for their Suica card, I just take my wallet out of my pocket and tap it on the reader and it works fine.
As far as NFC goes, I know Google Wallet requires a pin number to unlock the app (you can set how long it unlocks for, up to a full day), but I don’t know how easy it is to use for paying, since Google Wallet doesn’t work with any of the Japanese contactless card readers as far as I know. Might get to try it out when I move back to the states, but it sounds like the readers are still pretty rare right now.
On the topic of Chip-and-pin, when I went through Basic back at Lackland AFB in 2007, they had a chip-and-pin system on base, which they issued us cards with $300 pre-loaded (deducted from our paychecks) to spend on things we needed during Basic (shampoo, shoe polish, shower shoes, getting our uniforms laundered and pressed, etc.) When I deployed to Afghanistan a few years later, I was issued an identical card that I had to load money onto myself to use at the PX and various on-base vendors if I didn’t have cash on hand (we were heavily discouraged from using American plastic with any ATMs or vendors in Afghanistan for obvious reasons).
If it’s got a Visa logo on it, I assume that means it’s tied to your bank account through the Visa network. As Sunspace mentioned, our banks have their own network for debit cards, which is not part of Visa/MC.
This may have been influenced by our banking system, which is federally regulated. We have about a dozen federally chartered banks, so it would have been very easy for them to put together their own network, instead of tying into the Visa/MC network.
In Europe either the card never leaves your posession or you pass it to the person charging you so he can insert it into the machine, but always within your sight. If the card needs to go to where the machine is, you go with it.
Joey P is right - as long as it bears a Visa/MC logo it swipes as a credit card, even if it is not linked to any credit account. I do this daily.
Do banks issue non-V/MC-branded debit cards any more? Its been years since I saw one; I live in the US; my bank converted everyone 6 or 7 years ago. However, I guess if Northern Piper’s debit card lacks a logo he couldn’t use it at Wal-Mart. If so, I’d guess that so few people have those anymore, the cost of paying the network fee x elevety billion Wal-Marts outweighs the occasional lost $300 sale.
No, just the reverse here - none of our debit cards are linked to Visa or MC. I can now use it at Wal-mart because they apparently realised that they needed to adapt to the Canadian market. Their readers here are all chip and pin now. The cashier asks if you’re using debit or credit.
A question: Joey P mentioned buying the terminals, but in Spain I’m used to seeing both lease-to-own and straight loaner schemes. In the loaner schemes, the terminal is the property of the bank and displays the bank’s logo prominently (they may also be brightly colored, for example Caja Rural is very popular and their machines are always bright green), the merchant gets it as part of the bank’s “merchants package”.
Are either of those two types of schemes available in the US?
I’ve also seen credit card readers which have both a swipe slot and a slot for chip-and-pin cards. Presumably such devices will serve as a transitional step so businesses can handle either payment method until the swipe cards get phased out, at which point, everybody uses chip and pin or they don’t get to accept credit or debit cards.
Yes, they do offer them here. IME, it’s usually about $30 a month or so, depending on the machine. But since machines are usually in the $700 range I usually encourage my fellow small business associates to buy them outright if they can afford to. At $30/mo, you’ll have paid for it in 2 years, but provided you don’t break it yourself, they tend to have a life of about 5-10 years.
I can’t recall if the lease extends to the PIN pad. I’ve had my machine for, at least, 5 years and I think I’ve replaced the PIN pad 3 times at about $200 a pop.
US banks also have separate networks for processing debit transactions, that do not use the Visa or MC networks. The biggest two are NYCE and STAR.
Most, possibly all, banks now by default issue you a debit card that can be used as a Visa or MasterCard transaction as well as straight debit using your PIN.
At least some banks will still issue you a traditional debit card that only works (with swipe + PIN) on the NYCE, STAR or other non-Visa/MC network.
I just got a call from my Credit Card Processor*. They called to inform me that I have until October 2015 to accept Chip/EMV cards. The cost of this, to me, is $229 (plus shipping) for a PIN pad that will accept chips and works with my machine. This, from what I recall, is about the same price as outright buying a new PIN pad (without sending them one to refurb). I’m guessing they don’t want the old ones anymore.
I got lucky and said “boy, it would’ve been nice if someone told me that when I ordered one a few months ago” and she’s checking to see if I can return this one for a refund, buy the new one and have the difference split up over three months. If I can I’ll take it. If not, I’ll wait. I have a year and my current machine is being sunsetted so I’ll have to get a new one if it breaks (instead of replacing it with the same model). I’d hate to have to replace this machine in 6 months and have to get a new PIN pad because I jumped the gun and the new PIN pad doesn’t work with the newer machine.
So, there ya go, the cost for me (or for my customers) is $229 + shipping + tax. Call it $250 for me to do Chip/PIN. That’s an actual real life number and not my guess from above. I didn’t realize I could just use a different PIN pad and attach it to my current machine. But to replace a machine, $500-$1000 for a mom and pop store is a good ball park to work with.
For clarification, here’s some images of typical Canadian cards.These ones are all issued by the Bank of Montreal, but those from other banks look similar (with different colors and branding of course). The first one on the left is a debit card, while the other three are credit cards. As you can see, the debit card doesn’t have the Mastercard logo. Also, the second one mentions PayPass, which is the contactless system Mastercard Canada uses.
Yes, Canadian debit cards when used are essentially doing the same process as ATM cash withdrawal - taking money from your account to the merchant’s, but must use a PIN number. (In fact, there’s also the “cash-back” option, where while making a purchase you can add extra and receive cash - so every merchant becomes an ATM too. The only difference is apparently you sign for this.) Debit cards are part of an international networks, such as Interac, or the Plus network - as long as the bank ATM displays the logo, it should work.
There are only a few banks in Canada, plus maybe some very small potatoes credit unions. Those banks effectively dictate the finance system. They decided about 5 years or so ago to convert the system to chip and pin. I notice that American Express was the last to convert, and it seems maybe half the places I use my Amex the chip still does not work; up from over 80% last year when I got the chip card.
I have also heard that due to recent fraud problems, a number of merchants now will demand ID if the chip fails and they have to swipe the card instead. Amex is a fraudster favourite nowadays because the chip does not work in many stores yet.
I used to have a CIBC Visa card, and they sent me one without the “PayWave” feature. When TD took over their Visa customers, I asked for no PayWave from TD and they said they could not. However, I tested and cutting the embedded trace just under the credit card number (xacto knife between/below the middle digit pairs) disables the paywave antenna.
As I understand it, the paywave bypasses the PIN for up to a certain level ($100 or $50 or something). Not what I wanted. there’s a video on YouTube from some TV show where they were stopping people on the street and asking to try reading their wallet. They could get a pretty good reading from about a foot away. I imagine the existing pay terminals are lower-powered just so they don’t accidentally read the wrong card. There was an article about problems with paywave and transit cards (was it the Washington Metro?) where people would wave their wallet and sometimes get charged on their debit card instead at the higher cash rate - or they paid double.
Overseas, my bank card would not work in ATMs in Heathrow or the Middle East in 2012 - except in the hotel outside Petra, which was the only ATM I saw that had a chip reader rather than a stripe reader. Funny, the same ATMs had no problem handing me cash advances on Visa based on the magstripe. Even inside the bank branches in Egypt, the debit card would not work. Whereas, in the last 10 years before that, I’ve found the magstripe debit worked in ATMs all over Europe.
I effectively avoid debit because - why would I pay now when I can pay later and get the card points? Plus my bank charges by the transaction over a certain amount; it makes more sense to pay Visa or Amex once a month than pay for each debit transaction.
As I understand it, the chip is essentially a tiny processor which uses encryption and handshaking to communicate with the terminal, whether by contact (insertion) or wirelessly. Much like the certificate validation process of “https” websites, it is presented with a certificate and responds by encoding with its own embedded certification code. This is much more difficult to do and significantly harder for scam artists to copy and fake, especially on a flat card that looks real… as opposed to magstripe cards which can simply be read and copied to any magnetic stripe card.
If you factor in the cost to issue new cards, purchase new POS machines, refit ATMs with new card readers, I’ve seen numbers anywhere from $3 to $8 billion kicked around.
Reading this thread I see that there is an essential difference between my UK CC and American ones, apart from the chip. That is that my CC is entirely separate from my bank account. If I understand this correctly, American credit cards are issued by the bank that has their current account. I have two CCs; one issued by a supermarket, and one more general one. Neither has any link with my current account at all.
On the subject of PINs - Our cards come with a random PIN assigned, which is sent separately to the card itself. Using that PIN, I can go to any ATM and change it to one that I can remember.
Well, we can get Debit card issued by our banks, drawing from our checking account directly (so we’re spending money we already have rather than borrowing someone else’s).
The banks also issue credit cards, where we are borrowing from them, and they may be tied to our checking account in some way (automatic payments, for example, or going the opposite direction, providing overdraft protection for the checking account, so if you try to spend money you don’t have, it comes from your credit balance instead of overdrawing your check account). It’s also possible to have your checking account at one bank and your credit card at another bank, with no cross talk at all between them.
We can also get credit cards from other companies, usually stores. Target, Wal-Mart, and Home Depot all come to mind. Some of the store-specific cards will only work with that store, and some of them work anywhere. Many companies that do online payment services also offer credit cards, such as Amazon.com, PayPal, or Google.
Another mini-update, turns out some phones already have the ability to transmit credit card data to POS terminals. My phone has, for a while, had an app called ISIS Wallet that I never touched. A few days ago the name changed to Soft Card and I found out it’s for doing just this (I checked with my credit cards to make sure it was on the up and up). I tried it out this weekend.
I set up the app, loaded two of my credit cards into it, went to a store I knew supported it (Sports Authority) and paid by holding my phone to their credit card terminal. Worked like a charm.
FTR, it was quite a bit more of a hassle* than just using a regular credit card, but it’s nice to know the option is there.
*To make this work, I’d have to notice that it’s an option, pull out/turn on my phone, find the app, punch in my PIN, pick the credit card I want to use, orient it on the terminal and then it went through. The app then told me to click something to confirm, which I did, but I don’t know what would have happened if I didn’t as the sale was done at that point. Also, I assume things would have been even slower if there was an update that was ready to be pushed through or that had just happened and the app wanted me to read about the new features etc.
So, if your phone has NFC, you might want to check to see if it has (or you can download) an app called ISIS Wallet or Soft Card.
