Credit Card Useless Overseas? PIN it with HomeATM

The headline might be a bit dramatic, but it's true that more and more merchants in Europe and elsewhere will not accept credit cards without the "Chip and PIN" system — The term is "chip and PIN" (or EMV, for Europay, Mastercard and Visa). Most European banks and merchants are switching to it. Canada's switching too. By 2010, you'll have trouble using a standard American credit card at many Canadian merchants.

Banking officials say the chip-and-PIN method has reduced credit-card fraud substantially in Europe, where the problem grew exponentially when former Soviet bloc countries joined the European Union.  Sure...blame it on the bloc heads.

Chip and PIN has an embedded chip in the card along with a PIN number (similar to that you are probably accustomed to with your ATM card).  What's that you're thinking?  You don't have a PIN associated with your credit card right?  That is correct, and, unfortunately, as this L.A. Times article reports, it's not an easy problem to fix:

If you don't have a credit card with an embedded ID chip and accompanying PIN, you may be limited in the number of transactions you can make.  Here's the catch: Americans cannot get such a card through U.S. card issuers.


So what do you do? Well, one way to be sure you always can get by is if your bank offers a combination ATM / debit card with the Visa or MasterCard logo. That has a PIN, so you're OK. But of course this means the money will come straight out of your checking account, so you'd better have enough in there to cover your purchases.

Of course, that's not really credit, it's plain ole PIN Debit.  What about acquiring a chip-and-PIN "credit" card?  Neither American Express nor HSBC, despite their global scope, offers such a product for U.S. customers.  So I guess credit cards really ARE useless overseas.

But hold on...there is another alternative that the Times article does not address!

HomeATM ePayment Solutions has come up with a way to solve this problem.  We call it PIN my Card.  It allows consumers to create a PIN for their "credit card" and was initially designed to increase the security of an online "credit transaction" and reduce the cost for internet retailers to accept online credit card transactions.  (The transformation redefines the "card not present, or CNP transaction as a "card present" one, which makes the transactions more secure thus lowering interchange fees for online retailers).  It also appears that PIN my Card would solve the dillemma of Americans traveling abroad with their credit cards.  Just attach a PIN and you're good to go!

HomeATM is currently awaiting approval and issuance of global patents regarding "attaching a PIN to a credit card."  I'll provide more on this process as it develops, or you can search this blog using the keywords "PIN my Card" to find out more right now.

For now, it's certainly not impossible to get by with your American credit card, but it's becoming more work to do so, so take this into consideration if you're hitting Europe any time soon. (or going to Canada in the near future)  Why chip and PIN in the first place?  If your credit card requires a PIN, the reasoning goes, it's useless to a thief.   So...for American's that means no stays at a fabulous luxury suite or a night on the town or a pair of Gucci shoes, courtesy of your "credit" card  unless you "PIN your Card"!  Stay tuned.