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Circuit Breaker

Credit card companies are blowing it with chip payments

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...and it’s making us feel dumb

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Today I did two things I do nearly every day. 1) I bought something using a credit card, and 2) I complained about something on Twitter. But today, the complaint on Twitter was related to payments, and now my replies are blowing up. They’re blowing up because I said a very obvious thing: in the past couple of months, buying something with a credit card in America has become an absolutely awful experience.

Tell me if this looks familiar:

I bet it does! The problem, if you didn’t know, is a new system of payments based on that little chip on your credit card. See, we’re in the midst of a transition to EMV (Europay, Mastercard, and Visa) payments. They’re more secure! They can (but in the US, usually don’t) require your enter a PIN to complete the transaction! We’ve been waiting for this, and now the terminals that support it are in a lot of stores. The march of progress moves forward.

Except, well, progress is stumbling, badly. As we go through this transition, not every point-of-sale terminal has been updated to use PINs. So when you approach a checkout counter and see one of these boxes, you suddenly do this dance which makes you feel dumb and inadequate. Here are the steps to the checkout dance:

  1. Try to guess if you swipe your card or insert it.
  2. Try one of those options.
  3. Probably discover you’re wrong, either because the machine scolds you or the store clerk does.
  4. Try the other option. If it’s the EMV chip, you then wait an interminably long time.

If you’re considering using a mobile payment option like Android Pay, Apple Pay, or Samsung Pay, you will have to dance similar steps with your phone first. If that fails (it totally might!), then perform them again with your credit card. Fun fact: Samsung Pay uses a virtual magnetic stripe in some situations, so it might fail and tell you that you have to use the chip on your card. Apple Pay and Android Pay have similar foibles, you never really know if they’re going to work.

Look I’m not even going to complain that EMV seems slower to process than swiping (here’s a good Planet Money story on it and here’s a good Quora thread). That will get resolved over time, hopefully.

But in the meanwhile, we have to do this dance every time we check out, and it’s demeaning and dehumanizing. It’s doubly so because, as so many of my Twitter replies have pointed out, it’s a first-world kind of problem. So you feel like a little bit of a jerk for griping about it on top of feeling kind of dumb for not knowing how to accomplish the simplest thing in the world.

This transition from swiping to chips (or to mobile payments) was always going to be rough. But it’s way worse than I expected and retailers seem to be left to their own devices (literally!) when it comes to knowing what their payment machines should do.

The answer, you already know, is for those point-of-sale terminals to get faster and smarter along with mobile payments becoming more universally accepted. But there doesn’t seem to be a strong enough push to make any of those things happen quickly enough. The incentive to move it faster was the Great Payment Networks’ Liability Shift, which puts the onus on merchants for fraud if they don’t use EMV. It hasn’t worked, and merchants are justifiably mad about it.

Instead, the result is we all feel dumb every time we need to pay for something.

I’ve been calling our payments system in America a mess for four years now. At least I can feel smart about being right about that. But I can’t feel smart by telling you if we’re going to get out of this mess anytime soon or how to force credit card companies to help merchants out.

Just keep doing that checkout dance.