18 December 2017
Visit http://cib.db.com

US banks face backlash over foreign card compatibility issues

26 October 2009  |  5618 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  |  11231 views  |  0 comments
visit www.ebaday.comvisit www.thomsonreuters.infovisit www.niceactimize.com

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
11349 views comments | 3 tweets | 4 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
10521 views comments | 21 tweets | 26 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7842 views comments | 19 tweets | 22 linkedin
Digital banking startup Loot secures £2.2 million seed roundDigital banking startup Loot secures £...
7633 views comments | 5 tweets | 11 linkedin
Nordea takes Open APIs into live productionNordea takes Open APIs into live productio...
7514 views comments | 6 tweets | 26 linkedin

Featured job

Competitive
New York, NY - USA (some flexibility on location)

Find your next job