I keep saying this but the we in the US really screwed up in the transition to chips. We had a chance to change behavior but we went ahead and ignored pins.
I simply don't understand why, apart from too many retailers complaining.
If cost of fraud is less than the cost of pins. Then nobody will push for pins.
Adding pins to checkout process adds friction and checkout time. It might be a minor amount per transaction. However if you add it up across all transactions, it's a significant amount.
More friction than printing out a receipt and asking me to sign it?
BTW, if you want to see just how efficient chip-and-pin can be, go to a bar in a nordic country. In Helsinki I can pay with chip-and-pin as quickly as cash (assuming change). The bartenders won't even hold a tab open for you, they just charge you every time. I've experienced the same efficiency in Sweden.
As of this month (April 2018), the big four card networks have stopped requiring (USA) merchants to collect signatures if chip is used. They had already waived this documentation step for the ~80% of transactions below $50.
With the wireless payment cards, it's even more efficient then cash. Just put your card up to the machine and it takes the payment. No pin or anything. Limited to under a certain amount though. And it does sometimes ask for your pin now and then to make sure it's you.
Increasingly you sign (or in my case scrawl a wiggly line) a pad but I still sign paper fairly regularly. One of the issues with PIN in the US is likely that you'd have needed a whole new workflow and mobile devices at sit-down restaurants. It would arguably be a better system to move to settling up at the table, but it would still be a big and expensive change.
You needed new devices anyway to switch to chip, but I think it is a cultural issue with tipping. Some people really like that the server doesn't know how much you tipped until you leave.
Yeah, that may be part of it. It's not really rational but I don't especially like someone waiting for me to enter a tip amount into a keypad. I imagine others feel similarly. The US isn't unique in having tips but in the UK, for example, they tend to put 10% onto the bill automatically.
ADDED: And you needed new devices but not mobile systems to bring to the table.
Actually with chips with pins, it's faster because you can authenticate locally. Since we don't use chips, we have to do a server roundtrip, which is why initially a lot of the chip cards seemed to take "forever" (30 seconds) to authenticate.
Another performance issue with early EMV (I assume before NFC) is that it supports more different applications ("cards") on same physical card and there is no preferred one and the terminal essentially tries random file names until it finds something (and in fact is even supposed to continue the search to exhaustion for the rare case when the card contains more than one usable EMV application, in which case the customer is supposed to select the used one from menu). In current version the cards are supposed to contain data file with known name which specifies the filename of preferred application, this is required for NFC cards for somewhat obvious reasons, but AFAIK only recommended for contact-only.
This process is probably the largest part of what happens when the terminal/ATM displays message like "Chip initialisation in progress".
On most of the machines I've used in Sweden, you can input your PIN in advance while the cashier is scanning your items. Then you just push "OK" to confirm the final total and walk away.
This process also occurs in US with the chip transactions. You can start the auth process while checkout scanning is still occurring. So implementing the pin into the mix would be beneficial and not so much added friction/time in completing checkout.
I've never heard an authoritative answer about why the US didn't go to PINs when chips were adopted. One strongly suspects there was significant concern about changing retail/restaurant/etc. workflows, confusing customers who mostly don't use debit cards (with PINs), and otherwise introduced more confusion and friction to customers than absolutely necessary.
>Adding pins to checkout process adds friction and checkout time. It might be a minor amount per transaction. However if you add it up across all transactions, it's a significant amount.
Uuuuuh...
The rest of the world has been doing this for at least a decade without any problems at all. You got any kind of citation you can link us to demonstrating that the rest of the world is suffering from this decision in a way that the US is not?
If "someone else" is referring to the cashier, the customer uses the payment machine themselves. In PIN using countries the waiter brings a machine or you step over to the front counter.
If someone else is your spouse, kid, or personal assistant; you tell them the PIN or ask the issuer for an authorized user card.
Well, you don't. But I wouldn't have a problem with my partner using my card, in which case I just give them my pin? On the other hand, that is(or should be) literally impossible with signature.
I...don't. Ever. Why would you do that? That's terrible.
I usually transfer them the money through the free, instant, secure and traceable inter-bank transfers that are universally provided by every financial institution in my country to every other financial institution in my country, so that they can use their own card.
Only if the retailer has failed to upgrade to reading chips. E-commerce merchants have to absorb 100% of fraud which is why many are so picky about addresses exactly matching and sometimes require ID scans or phone verification for new customers or very large orders.
I'm complaining as a consumer. I have half a dozen cards in my wallet, and each retailer is incentivizing me to get their card (5% off is hard to ignore), if I applied for and carried all those cards I'd have ~20 cards to carry around, each with a different $%&#@%^^% PIN to memorize. It is not possible to do that.
Quite frankly, as a consumer I don't need increased security over what we had 20 years ago (mag strip and signature), someone else took the liability for any fraud. Chip+pin is trying to push the cost of fraud on me, and I don't like it. The value of cards over cash or checks is largely because I pay less price for fraud.
They're not doing on-the-spot signature analysis. You're just harming your own chances of getting a dispute resolved in your favor if you ever need to make one.
When you have a documented history of legit signatures on file, signature difference is one of the factors that get considered in the event you file a dispute.
As of this month (April 2018), the big four card networks have stopped requiring (USA) merchants to collect signatures if chip is used. They had already waived this documentation step for the ~80% of transactions below $50.
I work in the credit card processing industry and can't even begin to comprehend how a fake signature would help.
It wasn't a valid signature. Even when you attempt to make a legitimate signature on a screen it comes out incredibly poorly. The only legitimaticy is that "someone signed some form of letters/made a drawing of a penis". I can't see why that would ever prevent chargebacks
It's possible to change the PINs on your credit cards to the same value. Not much security decrease and greatly improves usability. I haven't tried it myself as PIN credit is very rare in USA.
PIN does not mean you are automatically liable for fraud losses. Federal law caps credit card liability at $50. Most issuers eat that too with $0 liability to remain competitive.
There are also state laws that may go further in consumer protection. The card network may also have additional protections. Finally as I've mentioned the issuer often waives all fraud loss liability.
Maybe you should stick with 1 card and 1 PIN and that solves all your problems and the problems of the people around you that you are affecting by living in society?
People in the US routinely give their cards to other people to use (e.g. relatives). Yet banks tell everyone never to disclose your PIN. So using PINs would prevent card lending which would reduce bank's income.
Don't worry, contactless throws all of that out the window. It's like WPS for routers. Anyone got your card? They can make purchases and cashback till your account is out of cash or they get really tired.
Yeah, there can be a limit on the number of transactions, but my bank and several others just don't care, there's only a limit on a single transaction, currently £30. Genius, just genius.
That's for personal cards, though. Always use a prepaid card when paying for anything, anywhere.
That is just not true - you will be asked for a pin if you use contactless multiple times in succession, and you can't do cashback with contactless at all. I also live in UK.
How many times? I did 5 consecutive purchases in a day with TSB, no PIN requirement. Contactless VISA allows for cashback. Barclays, 3 consecutive purchases, haven't tried cashback.
I simply don't understand why, apart from too many retailers complaining.