20 October 2017

US banks face backlash over foreign card compatibility issues

26 October 2009  |  5588 views  |  0 credit card

Aite Group estimates that nearly 10 million US cardholders experienced problems using their credit cards abroad in 2008 alone, a majority of which changed their card usage behavior as a result.

The report is based on a September 2009 Aite Group online survey of 1,019 US resident cardholders that traveled to countries outside of Canada, the Caribbean and Mexico between 2006 and 2009.

For cardholders traveling to Western Europe over the past three years, there is an almost 50% chance that they have experienced some form of problem using a US payment card, says the analyst house.

Aite Group estimates that 9.7 million US cardholders experienced issues with card payments abroad in 2008, and that the US card industry missed out on $3.9 billion in transactions and $447 million in revenues as a result of the failures.

With European markets moving to smart card-based payments, US travellers are finding their mag-stripe cards being rejected at retailer Chip and PIN terminals and foreign cash machines. European issuers meanwhile are growing concerned at the higher incidence of counterfeit card fraud occurring on US shores, leading to calls for the US banking industry to switch to the chip-based EMV payment card standard.

"Nearly two-thirds of cardholders adjust payment behavior after a bad experience, directly resulting in lower usage of the problem card," says Nick Holland, senior analyst with Aite Group. "An issue caused by incompatible card technology is treated far more seriously by cardholders than issues stemming from card acceptance, fees or merchant policies. A quarter of cardholders experiencing these types of problems will agree either somewhat or totally that the problem ruined or almost ruined their trip."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

ATM card capture crime soars in EU; pressure grown on US to move to EMV

ATM card capture crime soars in EU; pressure grown on US to move to EMV

21 October 2009  |  11185 views  |  0 comments
Register nowvisit www.niceactimize.comvisit www.fivedegrees.nl

Top topics

Most viewed Most shared
Ripple looks to drive bank adoption with $300m XRP rebate programmeRipple looks to drive bank adoption with $...
16072 views comments | 12 tweets | 4 linkedin
satelliteGates Foundation backs Ripple collaboratio...
8312 views comments | 13 tweets | 10 linkedin
HSBC partners Bud for open banking trialHSBC partners Bud for open banking trial
7876 views comments | 21 tweets | 26 linkedin
IBM uses blockchain to improve cross-border payments processingIBM uses blockchain to improve cross-borde...
7301 views comments | 9 tweets | 17 linkedin
Sibos 2017: API or the highwaySibos 2017: API or the highway
6633 views comments | 10 tweets | 21 linkedin

Featured job

Competitive base + commission + benefits
Denmark, Finland, Iceland, Norway or Sweden

Find your next job