On the heels of our own Payments Views post The End of Cards as We Knew Them? have come interesting comments on the acceptance challenges facing US consumers using magnetic stripe cards overseas.
Listen to Guest Daniel Ray, editor-in-chief of creditcards.com on WNYC’s “411” program (starts just after 1:00 minute) and read the recent article by Beverly Harzog U.S. Magnetic Stripe Credit Cards on Brink of Extinction? citing European Payments Council (EPC) discussion of ending magnetic stripe card acceptance over the next few years.
This is a real challenge for US Issuers who cannot justify the costs of implementing Chip-and-PIN with off-setting fraud reduction (even in the UK the fraudsters seem to have merely changed tactics rather than going away) and merchants who are not planning change to Chip-and-PIN at the point of sale.
Issuers need to start considering potential lost revenue, currency exchange, and movement of the card to the bottom of the wallet and the card networks need to evaluate the impact on their Brand assets.