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Travelers May Get Confused by New 'Chip and Pin' Technology; U.S. Travelers May Need to Be Persistent with Merchants Overseas.

ORLANDO, Fla. -- Millions of Americans travel overseas each year and use their credit and debit cards in much the same way they use them in the United States. But recent changes in the United Kingdom and other countries may require Americans traveling there to be better informed when they pay with plastic.

"The UK has gone completely 'Chip and PIN' and that's causing a bit of confusion for some travelers as well as merchants overseas," said Scott Denman, managing director, AAA Financial Services.

"Chip and PIN" is a credit and debit card payment system that uses a microchip in the card and PIN (personal identification number) in order to complete a transaction. It is the latest technology designed to prevent credit and debit card fraud which cost the financial services industry in the U.K. $914 million in 2004.

While the new system may make credit cards more secure, the issue for travelers is whether or not their U.S. bank-issued credit and debit cards, which typically do not have a chip but instead use a magnetic stripe and cardholder signature, will work with the new Chip and PIN systems.

"The answer is a definite 'yes,' but travelers should know they may need to be more persistent with merchants to complete the transaction with a signature," said Denman. "The new card readers used in the U.K. are still able to read the magnetic stripe on a U.S. bank card even though it does not have a chip, but consumers may have to be insistent that the merchant accept their signature instead of a PIN."

The reason is that PINs for credit cards issued by U.S. banks are not recognized by the Chip and PIN system, so a signature is required for purchases. While all merchants who display the Visa/MasterCard/Amex logos must accept any card bearing those marks, some merchants in the U.K. may be resistant to accepting magnetic-stripe cards or may be unaware that they will work. However, even though the PINs for U.S. debit and credit cards are not recognized at the point of sale, they will still work at ATMs overseas.

If U.S. travelers have difficulty using their credit or debit cards for payments overseas, they should ask the merchant to swipe the card and follow the prompts on the terminal. If a merchant refuses, cardholders need to be persistent in requiring the merchant to accept a signature to complete the sale. Since other countries may convert to the Chip and PIN system over time, it is prudent for travelers to be knowledgeable about this issue regardless of their travel destination.

For more information, contact your local AAA club travel agency.

As North America's largest motoring and leisure travel organization, AAA provides more than 49 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at

AAA news releases can be downloaded from
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Publication:Business Wire
Date:Aug 14, 2006
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