Hond Financial

Posts Tagged ‘smartcard’

American credit cards are sadly lacking when they come to Europe and indeed visit other countries that use smart card technology. The vital missing ingredient is smart card technology.

Smart cards still provide a magnetic strip that makes them compatible with older terminals but they also have an embdedded microprocessor that provides the smart technology. Smart card technology has been introduced to prevent fraud in over 22 countries including most of Europe, Brazil, Mexico and Japan and more countries are adopting the technology as time progresses. Over the next couple of years many additional countries including China, India and Latin America will adopt this new technology.

The embedded microprocessor means that more data can be stored on the card instead of relying upon database access. The new smart card technology is favoured by the police and government as it makes it so much more difficult to clone credit cards and commit card fraud.

Old style magnetic strip based cards are still suitable for most shops and restaurants as these match the terminals that are are in common use in these situations. The new smart card technology is essential if you want to make use of an increasing number of automatic terminals that are commonly found at ticket kiosks and petrol station gas pumps. Americans who don’t have cards with the new smart card technology would not be able to make use of these new facilties.

Although the rest of the world is quickly adopting the new, high security technology the American banking industry has no immediate plans introduce the new cards. It has been observed that credit card fraud isn’t as big a problem in the United states as its in Europe and other parts of the world.

Another reason for the delay in adoption is cost. The cost of introducing the new technology has been estimated at around .5 billion to introduce the new technology and this is mainly due to the need for replacement terminals.

So it looks like American tourists in Europe and elsewhere will need to make certain they have cash in their pockets rather than rely on their credit cards.

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One thing you can be certain of when travelling is the need for adequate and appropriate travel insurance. If you are over 64 you should be looking at Senior travel insurance and if you have any form of medical condition you need to look at Travel Insurance for Pre-Existing medical conditions.