Credit Cards: Visa Says Goodbye to Mag-Stripe

Credit cards

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Visa said Tuesday that it is making an aggressive effort to push U.S. consumers onto credit cards with embedded security chips, a technology that has become prevalent overseas. Visa also said that it sees an end to the common “mag-stripe” credit card, which the United States has used for decades. In its place, Visa said it will move to both so-called EMV or “Chip and PIN” technology. Visa also again endorsed near-field-communication (NFC) technology, which embeds payment information inside phones. Visa also set a deadline: April 2013, the date by which its U.S. acquirer processors and sub-processor service providers must support merchant transactions using chip-based cards.

Embracing the new technology would decrease the problems Americans face when traveling abroad, since U.S. credit card companies and merchants are still using the archaic magnetic stripe. “Mag-stripe” cards often do not work at unattended kiosks, such as train-ticket vending machines or unnamed gas stations, so U.S. consumers often find themselves in difficult situations when overseas. However, a problem that has arisen is that the proposed cards are largely unavailable in the U.S. because banks claim the demand is too low to justify the additional costs. Retailers dread spending more money on new payment systems and credit card companies are reluctant to adopt chip cards until merchants agree to accept them. Nonetheless, Visa says the end of the “mag-stripe” credit card is near. For a free insurance quote visit our website today at http://www.kimberleyvassal.com!

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