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Credit card hassle you may face overseas

2011-06-16

Credit card customers who are using card with magnetized strips have a reason to worry when traveling overseas. Such customers run a risk of failed transactions while swapping their cards since the technology used in them is now being replaced by a chip and PIN technology in many parts of the world.

As per Philleppe Benitez, a vice president of secure transactions for Gemalto, when cards are swiped, the processing starts and “the terminal instantly contacts the bank's servers and asks for authorization". This process, so far has been successful at minimized the number of fraudulent transactions.

Other countries differed in their view of the efficiency of the system. They have adopted a more sophisticated mechanism by deploying the chip technology. Benitez commented on it saying “They basically moved some of the intelligence to the card itself.”

With this technology, the card is embedded with user specific credit card information which includes credit card number, the limit and the expiry date. As per this mechanism, the customer will have to enter a PIN rather than make a signature on the receipt.

This issue of problems faced with magnetized tape is getting more importance since a survey conducted by Aite Group in 2009 revealed that most of card holders who faced problems abroad were carrying US issued credit cards during their travel.

Sarah Ely, vice president of communications at MasterCard Worldwide agreed saying “This is something that we are starting to hear more about from our customers and card holders alike, but it hasn’t reached a fever pitch yet”.